NC banking: Kelly King
Chairman and CEO, BB&T Corp.
Education: Bachelor’s and MBA degrees from East Carolina University
Career: King has worked for the Winston-Salem-based bank for 43 years, serving as president from 1996 to June 2004 and chief operating officer from 2004 to 2008. He became CEO in January 2009 and chairman in 2010.
2015 Compensation: $8.6 million
For many years, BB&T executives emphasized their desire to expand into faster-growing markets with similar prospects and cultures as North Carolina. There’s Florida, with 325 branches, and Texas, where the Winston-Salem-based bank entered in 2009 and now has 122 offices. It’s funny how quickly things can change. BB&T now has the fourth-largest market share of deposits in slow-growth Pennsylvania after spending more than $4 billion to buy Lititz-based Susquehanna Bancshares in August and Allentown-based National Penn Bancshares in April in deals that added more than $28 billion in assets. The Keystone State has added about 500,000 residents since 2000, compared with almost
2 million newcomers in North Carolina during the same period.
But BB&T was impressed by the banks’ “attractive mix of urban corporate clients and diversified small businesses that is compatible with our South Atlantic and Florida markets,” CEO Kelly King said in the company’s 2015 annual report. (He declined a request for comment for this story.) Started in Wilson in 1872, less than a fourth of BB&T’s bank deposits now come from North Carolina.
Making two big acquisitions within a year, along with the integration of 41 Texas branches acquired from Citigroup last year, was a faster pace than King preferred, he told analysts in April, but BB&T felt compelled to strike when the banks became available. “They come when they come. And you take advantage of them when they’re there.”
The purchases diversify BB&T’s markets because
they combine fast-growth areas in Florida and Texas with high net-worth markets such as Philadelphia, King said. Now BB&T’s focus “is not on strategic deals but on improving profitability” by reducing expenses and adding revenue, he said.
BB&T also continues to expand its nonbanking business, buying the Swett & Crawford wholesale insurance brokerage for $500 million in April. Net income from the company’s dealer finance, insurance, mortgage banking and financial-services units totaled $925 million last year, compared with a $978 million profit reported by its community banking division.
As BB&T has grown, its shares have consistently outperformed an index of its regional bank peers over the last 15 years. But bank stocks have struggled for a long time: Investors would have done better holding the S&P 500 index, which outperformed BB&T stock by 55% during the decade ended Dec. 31.