There’s opportunity here   2005 ANNUAL REVIEW
20
BB&T
2006 ANNUAL MEETING
                                                                                      BB&T Corporation...
Consolidated Financial Highlights
    BB&T Corporation and Subsidiaries
    (Dollars in millions, except per share data)

...
turn on
                                                        Fee Income Ratio                                          ...
CORPORATE
           PROFILE
    BB&T Corporation (“BB&T” or “the Corporation”) is a financial holding company headquarter...
BB&T ANNUAL REVIEW




 05

ABOUT THE REVIEW

The BB&T Corporation 2005 Annual Review is presented in a summary format to ...
TO OUR SHAREHOLDERS:




    I am pleased to report that 2005 was a strong year        Cash basis measurements of performa...
BB&T ANNUAL REVIEW




05




John A. Allison
Chairman and Chief Executive Officer



                                    ...
With BB&T providing a
  strong financial foundation,
  the possibilities are infinite.
        Our clients come from
     ...
BB&T ANNUAL REVIEW




 05                                                                                                ...
¬                                        RETURNS TO INVESTORS

                                  BB&T has been a rewarding...
People come first at BB&T.
      By developing strong.
    relationships internally,
  we are well-equipped to.
    develo...
BB&T ANNUAL REVIEW




     05


                           OUR MISSION
     To Make the World a Better Place to Live, by:...
¬

                    THE BB&T CULTURE

              BB&T is a company that has largely been built through acquisitions ...
¬

     A significant aspect of self-fulfilling work comes from      mission and their adherence to our values. Those who
...
“All of our employees are focused on helping our clients achieve economic success
 and financial security. We consider it ...
¬

                                      2006 KEY STRATEGIC OBJECTIVES

                                      During our s...
BB&T ANNUAL REVIEW




 05
                             We encourage our employees to see their work
                     ...
0.0
                                                                                        ¬ 18.00
                      ...
OPPORTUNITY FOR THE
          FUTURE
                                                           What’s on the horizon
    ...
¬



     Our primary long-term performance goal is to grow          new client acquisition, improved retention and greate...
© 2006 BRYAN LARSEN ALL RIGHTS RESERVED




¬

In closing, I want to extend my sincere appreciation to Alfred E. Cleveland...
Corporate Board of Directors




BB&T ANNUAL REVIEW




05                        John A. Allison IV                 Tom D...
Executive Management




John A. Allison IV                    Christopher L. Henson
Chairman and                         ...
Market Coverage



               BB&T Headquarters
               BB&T Commercial Finance
               Laureate Capital...
Map generated by SpatiaLogic

                               25
Shareholder Information



        Purpose
        BB&T’s ultimate purpose is to create superior, long-term economic rewar...
“Dividend Achievers represent the
 elite of the U.S. stock market.”                                                      D...
Consolidated Balance Sheets
     BB&T Corporation and Subsidiaries
     (Dollars in thousands, except per share data)




...
AR BBT Annual2005
AR BBT Annual2005
AR BBT Annual2005
AR BBT Annual2005
AR BBT Annual2005
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AR BBT Annual2005

  1. 1. There’s opportunity here 2005 ANNUAL REVIEW
  2. 2. 20 BB&T
  3. 3. 2006 ANNUAL MEETING BB&T Corporation’s Annual Meeting of Shareholders will be held at the Embassy Suites Winston-Salem at 460 North Cherry Street, Winston-Salem, North Carolina, on Tuesday, April 25, 2006 at 11:00 a.m. 05 ANNUAL REVIEW TABLE OF CONTENTS Consolidated Financial Highlights 2 Corporate Profile 4 To Our Shareholders 6 Corporate Board of Directors 22 Executive Management 23 Market Coverage 24 Shareholder Information 26 Consolidated Balance Sheets 28 Consolidated Statements of Income 29 Selected Financial Data 30 Selected Ratios 31 General Information 32 “About the Cover “There’s Opportunity Here” by Bryan Larsen, “special commission for BB&T “© 2006 Bryan Larsen “Quent Cordair Fine Art “1-866-267-3247 – www.cordair.com
  4. 4. Consolidated Financial Highlights BB&T Corporation and Subsidiaries (Dollars in millions, except per share data) 2005 2004 % Change Annual Results Net income $ 1,654 $ 1,558 6.1 % Net income per common share: Basic 3.02 2.82 7.1 Diluted 3.00 2.80 7.1 Cash dividends paid per common share 1.46 1.34 9.0 Annual Operating Results (1) Operating earnings $ 1,674 $ 1,562 7.2 % Operating earnings per common share: Basic 3.06 2.83 8.1 Diluted 3.04 2.81 8.2 Annual Cash Basis Operating Results (1,2) Cash basis operating earnings $ 1,763 $ 1,646 7.1 % Cash basis operating earnings per common share: Basic 3.22 2.98 8.1 Diluted 3.20 2.96 8.1 Year-End Balances Assets $ 109,170 $ 100,509 8.6 % Securities, at carrying value 20,489 19,173 6.9 Loans and leases 75,023 68,163 10.1 Deposits 74,282 67,699 9.7 Shareholders’ equity 11,129 10,874 2.3 Book value per common share 20.49 19.76 3.7 Average Balances Assets $ 104,612 $ 96,276 8.7 % Securities, at amortized cost 20,467 18,218 12.3 Loans and leases 71,517 66,107 8.2 Deposits 70,346 64,816 8.5 Shareholders’ equity 11,065 10,597 4.4 Performance Ratios Based on Net Income Return on average assets 1.58 % 1.62 % Return on average equity 14.95 14.71 2
  5. 5. turn on Fee Income Ratio Total Assets on Equity % | based on operating earnings Billion $ asis operating earnings BB&T ANNUAL REVIEW 27.82 120 05 39.1 109 100 30.0 80 60 15.0 40 20 0.0 0 ’01 ’02 ’03 ’04 ’05 ’05 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 3 ’04 ’05 As originally reported 10-year compound annual growth rate 18.2% Operating Earnings ciency Ratio Million $ 2005 2004 asis operating earnings Performance Ratios Based on Operating Earnings (1) 1,800 Return on average assets 1.60 % 1.62 % 50.4 1,674 Return on average equity 15.12 14.74 Fee income ratio 1,600 39.1 37.8 Efficiency ratio 52.5 51.9 1,400 Performance Ratios Based on Cash Basis Operating Earnings (1,2) Return on average tangible assets 1.77 % 1.79 % 1,200 Return on average tangible equity 27.82 27.17 Efficiency ratio 50.4 49.7 1,000 Capital Ratios 800 Tier 1 risk-based capital ratio 9.3 % 9.2 % Total risk-based capital ratio 14.4 14.5 600 Tier 1 leverage capital ratio 7.2 7.1 Equity as a percentage of total assets 10.2 10.8 400 Miscellaneous Information 200 Common shares outstanding (in thousands) 543,102 550,406 Basic weighted average shares outstanding (in thousands) 546,916 551,661 0 ’05 Diluted weighted average shares outstanding (in thousands) ’01 ’02 ’03 ’04 ’05 551,380 556,041 3 ’04 ’95 ’96 ’97 ’98 ’99 ’00 Shareholders 257,000 255,000 Full-time equivalent employees As originally reported 10-year compound annual growth rate 20.7% 27,745 26,148 Banking offices 1,404 1,413 ATMs 1,951 1,930 (1) Information presented on an operating basis excludes the effects of $(6.8 million) and $3.5 million of net after-tax costs associated with the completion of mergers and acquisitions in 2005 and 2004, respectively. In addition, operating results in 2005 exclude the effects of a one-time charge related to the accounting for leases, which totaled $26.6 million, net of tax. (2) Information presented on a cash basis excludes the effects of intangible assets, purchase accounting adjustments and the related amortization expenses, which totaled $89.4 million and $84.0 million, net of tax, for the years ended December 31, 2005 and 2004, respectively. In addition, cash basis results exclude merger-related and nonrecurring items as discussed in Note 1. 3
  6. 6. CORPORATE PROFILE BB&T Corporation (“BB&T” or “the Corporation”) is a financial holding company headquartered in Winston-Salem, North Carolina. With consolidated assets at December 31, 2005, totaling $109.2 billion, BB&T is the ninth largest banking organization in the United States. As of December 31, 2005, BB&T’s banking subsidiaries operated more than 1,400 branch offices in eleven states and Washington, D.C. BB&T’s largest subsidiary, Branch Banking and Trust Company, was founded in 1872 and is the oldest bank based in North Carolina. Through its subsidiaries, BB&T offers a wide range of lending and deposit services to businesses and individuals. BB&T’s subsidiaries also provide trust services, wealth management, retail and wholesale insurance services, investment and capital markets services, leasing, factoring, treasury services, asset management, international services, payroll processing and bankcard services. BB&T’s current organization was formed by a merger-of-equals in 1995 between the former BB&T Financial Corporation and Southern National Corporation. In the past 15 years, BB&T has consummated acquisitions of 53 banks and thrifts, 77 insurance agencies, and 28 nonbank financial services companies. 4
  7. 7. BB&T ANNUAL REVIEW 05 ABOUT THE REVIEW The BB&T Corporation 2005 Annual Review is presented in a summary format to provide information regarding the performance of BB&T in a manner that is meaningful and useful to the widest range of readers. The audited consolidated financial statements of BB&T Corporation and its subsidiaries and other more detailed analytical information regarding the Corporation are contained in the BB&T Corporation Annual Report on Form 10-K for the year ended December 31, 2005, filed with the Securities and Exchange Commission. This 2005 Annual Review contains financial information determined by methods other than in accordance with Generally Accepted Accounting Principles (“GAAP”). BB&T’s management uses these “non-GAAP” measures in their analysis of the Company’s performance. Non-GAAP measures typically adjust GAAP performance measures to exclude the effects of charges, expenses or gains related to the consummation of mergers and acquisitions, as well as the amortization of intangibles and purchase accounting-related adjustments in the case of “cash basis” performance measures. These non-GAAP measures may also exclude other significant gains, losses or expenses that are unusual in nature and not expected to recur. Since these items and their impact on BB&T’s performance are difficult to predict, management believes presentations of financial measures excluding the impact of these items provide useful supple- mental information that is essential to a proper understanding of BB&T’s core operating results. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. FORWARD-LOOKING STATEMENTS This BB&T Corporation 2005 Annual Review contains certain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. These statements may address issues that involve significant risks and uncertainties. Although we believe that the expectations reflected in this discussion are reasonable, actual results may be materially different. Please refer to BB&T’s Annual Report on Form 10-K for the year ended December 31, 2005, for a more thorough description of the types of risks and uncertainties that may affect management’s forward-looking statements. 5
  8. 8. TO OUR SHAREHOLDERS: I am pleased to report that 2005 was a strong year Cash basis measurements of performance exclude the for BB&T, a year in which we achieved many important effects that intangible assets, purchase accounting strategic and financial goals. 2005 marked the end of adjustments and the related amortization expenses a self-imposed two-year period during which we have on operating earnings. Many of our internal determined not to announce any new plans for bank financial goals are based on cash basis performance or thrift acquisitions. Instead, we used this hiatus to because we believe these results provide a better strengthen our core operations and focus our atten- indication of the company’s actual economic perform- tion on developing strategies to drive BB&T’s organic ance. On a cash basis, our operating earnings totaled growth. Equipped with the lessons of the last two $1.763 billion for the year, an increase of 7.1% com- years and with the significant investments we have pared to cash basis operating earnings in 2004. On a made for the future, we clearly have tremendous diluted per share basis, cash basis earnings for 2005 opportunity at BB&T. were $3.20, up 8.1% compared with 2004. Our cash basis return on average tangible assets was 1.77% for 2005 and the cash basis return on average tangible Significant Accomplishments During 2005 equity was 27.82% for the year. Both percentages 2005 represents BB&T’s 24th consecutive year of reflect very healthy returns. record operating earnings. Net income for the year The core of BB&T’s business was created 11 years totaled $1.654 billion, or $3.00 per diluted share. ago by the merger-of-equals between BB&T Financial These amounts reflect increases of 6.1% and 7.1%, Corporation and Southern National Corporation. We respectively, compared to results for 2004. Excluding consider this landmark event in our corporate history the effects of merger-related items and nonrecurring to be the beginning, the yardstick by which we meas- charges from both 2005 and 2004, BB&T’s operating ure our progress, growth and performance. Over the earnings for 2005 totaled $1.674 billion, an increase last 10 years since the first full year of combined of 7.2% compared to the prior year. On a diluted per operations following the merger-of-equals, BB&T share basis, operating earnings for 2005 were $3.04, has produced phenomenal balance sheet growth, as an increase of 8.2% compared with 2004. ¬ 6
  9. 9. BB&T ANNUAL REVIEW 05 John A. Allison Chairman and Chief Executive Officer 7
  10. 10. With BB&T providing a strong financial foundation, the possibilities are infinite. Our clients come from all backgrounds and all walks of life. They depend on us to give flight to their dreams, and we deliver. Our partnerships are rooted in careful money management, wise investment strategies and opportunities to achieve any goal imaginable. © 2006 BRYAN LARSEN ALL RIGHTS RESERVED OPPORTUNITY IN OUR COMMUNITIES 8
  11. 11. BB&T ANNUAL REVIEW 05 Dividends Pai Diluted Earnings Per Share $ $ | based on operating earnings 3.04 3.00 1.50 1.25 1.00 2.00 .75 .50 .25 1.00 .00 ’01 ’02 ’03 ’04 ’05 ’95 ’96 ’ BB&T’s 10-year compound ¬ assets have increased from $20.5 billion to $109.2 bil- In addition to our improving performance, BB&T made lion, a compound annual growth rate of 18.2%. During important progress on otherDividend Payout Ratio Our corporate initiatives. % that same 10-year period, operating earnings as origi- banking network generated 90,000 net new client accounts during 2005 in 60 nally reported have increased at a compound annual connection with the imple- rate of 20.7%, an exceptional achievement. mentation of strategies to improve organic growth, 48.3% 50 reflecting a significant advancement in this measure Our combined loan and deposit growth during 2005 compared to recent years. Also, we hired a number of 40 was among the strongest in our history, with solid revenue producers throughout our footprint and are in increases in all our loan categories and 10.2% growth the early stages of rolling out an exciting new advertis- 30 in average noninterest-bearing deposits. Our loans ing campaign. Other successful developments included also continued to reflect excellent credit quality, 20 improving growth rates in our sales finance business as evidenced by a net charge-off rate of .30% for and success moving market share in our insurance 10 2005 compared to an industry average of .64%. operations. Combined with investments in our de novo Nonperforming assets improved to .27% of total branch building process, we are positioning the organi- 0 assets, also substantially better than the industry ’01 ’02 ’03 ’04 ’05 zation to react more quickly to the marketplace and to ’00 ’95 ’96 ’97 ’98 ’99 average of .48%. grow core revenues. ¬ 9
  12. 12. ¬ RETURNS TO INVESTORS BB&T has been a rewarding long-term investment for our shareholders. Unfortunately, fluctuations in our share price were generally in line with the banking sector during 2005, largely driven by market fears of an interest Dividends Paid Per Share rate envi- Diluted Earnings Permore difficult for banks throughout the Share $ ronmentbased onhas grown that operating earnings $| year. However, as you can see in the adjacent table, BB&T’s 3.04 3.00 1.50 Total Compound Annual Return total return to shareholders has outperformed the S&P 500 and December 31, 2005 the S&P Financials over the last 5, 10, 15 and 20 years. 1.25 BB&T S&P 500 S&P Financials 5 Year 5.7 % .6 % 3.8 % At BB&T, one of our most important objectives is to reward our 10 Year 15.6 9.1 13.3 1.00 shareholders with a growing and dependable cash dividend. To 15 Year 18.8 11.5 17.0 20 Year 14.8 11.9 N/A that end, during 2005 we increased the annual .75 dividend cash 2.00 For publicly traded companies over the last 20 years 63%, and over 9.0% per share, marking the 34th consecutive year that BB&T the last 78 years 96%, of the total return to shareholders has come from dividends and dividend reinvestment.* .50 has increased its dividend. We have paid a dividend every year *Brandes Institute since 1903. The compound annual growth rate in BB&T’s cash .25 dividends has been 13.0% over the last 10 years compared to a 4.9% increase in dividends for the S&P 500 Index. Our goal is to pay out between 1.00 .00 40% and 50% of our cash basis’01 ’02 ’03earnings’05 share in dividends. ’95 ’96 ’97 operating ’04 per ’98 ’99 ’0 BB&T’s 10-year compound annual dividend growth In recognition of BB&T’s outstanding track record of paying dividends, the Company was again designated as a “Dividend Achiever” by Dividend Payout Ratio % Mergent, Inc., a provider of global financial information. Only 2.0% of the 14,000 publicly- 3.0 60 traded companies in the Mergent study 48.3% 50 received this recognition. In addition, BB&T was named to the S&P 500 Index “Dividend 2.0 40 Aristocrats” and S&P’s “High-Yield Dividend Aristocrats.” The latter designation is designed 30 to measure the performance of the 50 highest 1.0 20 dividend yielding stocks in the S&P Composite 1500 that have consistently increased their div- 10 idend for at least 25 years. We are very proud of these recognitions and remain committed to 0.0 0 ¬ rewarding our shareholders. ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 10
  13. 13. People come first at BB&T. By developing strong. relationships internally, we are well-equipped to. develop equally strong. relationships with clients. across our markets. The fundamental. difference between. © 2006 BRYAN LARSEN ALL RIGHTS RESERVED BB&T and our competitors. is the commitment. from each employee. to make a difference. in every client relationship. OPPORTUNITY STARTS WITH OUR PEOPLE 11
  14. 14. BB&T ANNUAL REVIEW 05 OUR MISSION To Make the World a Better Place to Live, by: Helping our Clients Achieve Economic Success and Financial Security; Creating a Place Where our Employees can Learn, Grow and be Fulfilled in their Work; Making the Communities in which we Work Better Places to be; and thereby: Optimizing the Long-Term Return to our Shareholders, while Providing a Safe and Sound Investment. 12
  15. 15. ¬ THE BB&T CULTURE BB&T is a company that has largely been built through acquisitions of existing companies. Since 1980, we have acquired 72 banking or thrift organizations withReturn on Cash Basis approximately $70 Paid Per Share Fee Income Ratio billion in assets. Not surprisingly, it is a tremendous challenge to onCommonoperating earnings of so Average unify the employees Equity % | based on operating earnings % | based cash basis many acquired companies to create a culture of common purpose. While we have been 1.46 27.82 28.00 careful to pursue acquisitions of companies with cultures similar to our own, it takes a 39.1 committed effort to encourage our employees to embrace and live the BB&T values. We 30.0 guide this process by continually emphasizing the meaning and importance of our values, and as a result, we have seen our company’s culture flourish. The way we reward our shareholders is by growing revenues and earnings based on the 23.00 relationships we build with our clients. Our business is fundamentally about people building 15.0 trusting relationships with other people because we care about and are personally committed to helping our clients achieve their financial goals. Our corporate mission and core values are ultimately about instilling this basic principle in our people. We believe the strength of our culture translates into superior performance over time because our employees are self- 0.0 18.00 6 ’97 ’98 ’99 ’00 ’01 to provide ’04 ’05 service for our clients. motivated ’02 ’03 excellent ’01 ’02 ’03 ’04 ’05 ’01 ’02 ’03 ’04 ’05 ound annual dividend growth rate is 13.0% compared to 4.9% for the S&P 500. Operating Earnings OUR VALUES Diluted Cash Basis Cash Basis E ciency Ratio Earnings Per Share Million $ % | based on cash basis operating earnings $ | based on cash basis operating earnings Values are practical habits that enable us as individ- 2. REASON (Objectivity). There is only one “natural 3.20 1,800 uals to live, be successful and achieve happiness in resource” – the human mind. We must be able to 3.00 50.4 our lives. At every level of BB&T, our values empower think in an integrated way, thereby avoiding logical 1,600 % 45.0 us to achieve our mission and corporate purpose. We contradictions. Our goal is to objectively make the 1,400 emphasize 10 core values that are the foundation of best decisions to accomplish our purpose. 1,200 2.00 our business philosophy. 1,000 3. INDEPENDENT THINKING. We challenge our 30.0 1. REALITY. What is, is. If we want to improve, we employees to use their individual minds to 800 opti- their must act within the context of reality. The foundation mum to make rational decisions. In this context, each 600 1.00 15.0 for quality decision-making is a careful understanding of us is responsible for what we do and who we are. 400 of the facts. Creativity is strongly encouraged and is only possible 200 with independent thought. There is infinite oppor- 0.0 0 0.00 tunity’02 each’04 us’05 do whatever we do better.’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’01 for ’03 of to ’01 ’02 ’03 ’04 ’05 ¬As originally reported 10-year compound annua 13
  16. 16. ¬ A significant aspect of self-fulfilling work comes from mission and their adherence to our values. Those who creative thought and action. contribute the most must receive the most. If we treat our employees justly, we will retain the best employ- 4. PRODUCTIVITY. We are committed to be producers ees and create a long-term competitive advantage. of wealth and well-being by taking the actions neces- sary to accomplish our mission. 8. PRIDE. Pride is the psychological reward we earn from living by our values. Each of us must perform our 5. HONESTY. Being honest is simply being consistent work in such a manner that permits us to be justly with reality. To be dishonest is to be in conflict with proud of what we have accomplished. reality and is, therefore, self-defeating. We must keep our agreements with all our constituents. 9. SELF-ESTEEM (Self-Motivation). We want employ- ees who have strong personal goals and who expect 6. INTEGRITY. BB&T strives to be an organization that to accomplish their goals within the context of our demonstrates the highest level of integrity. Because mission. We want our employees to achieve a high we have developed our principles logically, based on level of justly earned self-esteem through excellence reality, we will always act consistently with our princi- in their work. ples. Regardless of any short-term benefits, acting inconsistently with our principles is to our long-term 10. TEAMWORK / MUTUAL SUPPORTIVENESS. While detriment. Therefore, we will not compromise our independent thought and strong personal goals are principles in any situation. critically important, our work is accomplished within teams. Each of us must consistently act to achieve the 7. JUSTICE (Fairness). Individuals should be evalu- agreed-upon objectives of the team, while acting in a ated and rewarded objectively (for better or worse) mutually supportive manner. based on their contribution to accomplishing our Our values are more than words on paper. Earlier this year, we publicly announced a lending policy that is reflective of the impact our corporate values have on our day-to-day operations. We announced that BB&T would not lend to commercial developers who plan to build private projects on land taken from private citizens by government entities using eminent domain. The decision to adopt this policy was not based on a financial analysis, but rather on what we, as a values-driven com- pany, believed was the right thing to do. The response to this announcement has been overwhelmingly positive, as we have received supportive comments from thousands of clients and shareholders. ¬ 14
  17. 17. “All of our employees are focused on helping our clients achieve economic success and financial security. We consider it a great opportunity to serve our clients by providing reliable, responsive, empathetic service. Our goal is to provide everyone we serve with the Perfect Client Experience and for our clients to benefit from the many opportunities at BB&T.” Kelly S. King Chief Operating Officer 15
  18. 18. ¬ 2006 KEY STRATEGIC OBJECTIVES During our self-imposed hiatus from bank and thrift system and are developing a centralized strategy to acquisitions, we carefully examined our businesses identify the best locations to open new branches, to and identified a number of areas where we can implement customized marketing plans and to staff Cash Basis Return on improve our performance. In 2006 we will focus on the new branches with specially trained financial cen- Fee Income Ratio Total Assets Average Common Equity % | based on cash basis operating earnings objectives to drive improved results. four broad ter managers Billion $are particularly skilled in starting who % | based on operating earnings up new locations. With these elements in place, we 27.82 120 28.00 39.1 1. Achieve Superior Revenue Growth will be able to react much more quickly to opportuni- 109 ties in the 100 marketplace and will have a consistent and 30.0 Organically growing revenues continues to be our easily replicated “template” for building branches greatest challenge and remains our highest priority in 80 that will improve our market coverage and drive 2006. In addition to continuing to execute on our growth in market share. world-class sales system (the BB&T Decathlon), we are 60 23.00 implementing a number 15.0additional strategies to of While we have rapidly grown in recent years and 40 meet this objective. For example, we plan to initiate entered a number of new markets, BB&T has only the building of 60 new branches throughout our foot- spent a fraction of what our competitors spend on 20 print in selective high-growth and high-return mar- advertising and marketing. In the first quarter of 2006 kets. In connection with 0.0 plans, we are working these we launched0an exciting new advertising and market- 18.00 optimize the effectiveness of ’01 branch delivery’05 our ’02 ’03 ’04 ing campaign led’95 the positioning’99 ’00 ’01 ’02 ’03 ’04 ’05 by ’96 ’97 ’98 statement, ’01 ’02 ’03 ’04 to ’05 As originally reported 10-year compound annual growth rate 18.2% Operating Earnings Cash Basis E ciency Ratio Million $ % | based on cash basis operating earnings 1,800 50.4 1,674 1,600 45.0 1,400 1,200 1,000 30.0 800 600 15.0 400 200 0.0 0 ’01 ’02 ’03 ’04 ’05 ’05 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 As originally reported 10-year compound annual growth rate 20.7% 16
  19. 19. BB&T ANNUAL REVIEW 05 We encourage our employees to see their work as a fundamental purpose in their lives and to pursue it with intensity and excellence. We are committed to developing our people, because if we have employees who are passionate about providing excellent service and building trusting relationships to help our clients be successful, BB&T and our clients will win in the long term. “There’s opportunity here.” With the energy of this We have also made significant investments in the campaign, we will work much harder to communicate number of our production personnel. We are investing the BB&T difference – that we offer a combination of in the payroll services business, where we believe market-competitive financial services and expertise to we have an opportunity to capture small business serve our clients’ most complex financial needs, along accounts, providing both payroll processing and with a culture that places relentless emphasis on human systems services. We believe these invest- exceptional client service. Our approach includes a ments will drive faster revenue growth rates in 2006. community banking model that places decision-mak- ing closer to the client than does any other large 2. Provide World-Standard Client Service financial institution. BB&T combines the personality, Sales and service are inextricably connected. The fun- client loyalty and sincerity of a community bank with damental difference between BB&T and our competi- the sophisticated, comprehensive expertise of the tors is the commitment from each employee to make biggest banking systems. Our approach is unique and a difference in every client relationship. In 2006, we uniquely beneficial to our clients. Given our successes will strive for excellent execution of the Perfect Client in new markets without significant advertising, we Experience initiative, which involves fully understand- are confident that this new campaign will greatly ing what our clients expect and aligning our training, strengthen our sales efforts and improve brand coaching and rewards systems to meet those expecta- recognition throughout our markets. tions. We are also implementing or strengthening ¬ 17
  20. 20. 0.0 ¬ 18.00 ’01 ’02 ’03 ’04 ’05 ’05 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’01 ’02 ’03 ’04 ’05 -year compound annual dividend growth rate is 13.0% compared to 4.9% for the S&P 500. strategies to improve our problem resolution processes, to provide excellent execution for transactional services and to deliver excellence in Cash Basis Diluted on Cash Basis Return consultative services. Operating Earnings Fee Income E ciency Ratio Cash Basis Ratio TotalMillion $ Assets EarningsonPer ShareEquityearnings Average Common % | | based on operating earnings earnings Billion $ % | based cash basis operating % based on cash basis operating $ | based on cash basis operating earnings While we have traditionally enjoyed lower employee turnover than our 3.20 46 27.82 1201,800 28.00 competitors, ensuring that we 39.1 maintain and increase this advantage is 3.00 50.4 critical to our future success. Quality client service is1,600 a function of pro- 100 48.3% 45.0 30.0reliable, empathetic, responsive and competent service – the key viding 1,400 is developing relationships, to know and understand our clients. 801,200 2.00 Employee turnover is obviously a significant obstacle to developing these 1,000 30.0 60 23.00 meaningful relationships. We are now more proactive than ever in 800 15.0 reducing turnover in key client contact positions. Our employees in lead- 40 600 1.00 ership positions will receive special training and will be evaluated based 15.0 400 on specific goals for employee retention. 20 200 Ultimately, the success of our 0.0 00 18.00 0.0 0.00 business will be’02 ’03 ’04 by’05 determined ’01 ’02 ’03 ’04 ’05 5 ’95 ’96 ’96 ’98 ’99 ’00 ’01 ’95 ’97 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’01 ’01 ’02 ’03 ’04 ’05 ’04 ’05 our ability to fulfill one of the fundamental As originally reported 10-year compound a the S&P 500. As originally reported 10-year comp commitments of our mission: to help our clients achieve Operating Earnings and financial security. economic success Cash Basis E ciency Ratio Million $ Fulfilling this commitment requires employees who are % | based on cash basis operating earnings g earnings passionate about their work. We encourage our employees to 3.20 1,800 see their work as a fundamental purpose in their lives and to 50.4 1,674 1,600 it with intensity and excellence. We are committed to devel- pursue 45.0 1,400 oping our people, because if we have employees who are passionate about providing excellent service and building trusting relationships 1,200 to 1,000 our clients be successful, BB&T and our clients will win in the help 30.0 long800term. 600 3. Accomplish Superior Efficiency, Productivity and 15.0 400 3. Earnings Growth 200 Our third objective for 2006 is to continue to improve our earnings 0.0 0 growth rate, including an’98 ’99 ’00 commitment to improving efficiency ’95 ’96 ’97 unrelenting ’01 ’02 ’03 ’04 ’05 ’01 ’02 ’03 ’04 ’05 ’05 and productivity.AsOur objective10-year compound annual growth rateprice-to-earnings originally reported is to achieve a superior 20.7% ratio by producing superior growth in cash basis earnings per share and cash basis return on equity, while maintaining a sound financial position. ¬ 18
  21. 21. OPPORTUNITY FOR THE FUTURE What’s on the horizon for 2006 and beyond? BB&T will continue our forward momentum, exploring new territory with the same passion for performance that has driven us for decades. We consider our evolution a journey. Along the way, we will continue to learn, to grow, to encourage and challenge one another, and to unlock the enormous potential in each of us. © 2006 BRYAN LARSEN ALL RIGHTS RESERVED 19
  22. 22. ¬ Our primary long-term performance goal is to grow new client acquisition, improved retention and greater cash basis earnings per share at 10% or greater. Over cross-sell of deposit products to nondeposit clients. the long term we have exceeded this goal, but have Our third focal area is commercial deposit base rela- fallen short on our objective over the last couple of tionship growth. We believe there is an excellent years. As previously outlined, we have made numerous opportunity to accelerate our commercial deposit investments to enhance our revenue production capa- growth by increasing our incentives for deposit acqui- bilities. We expect these investments to pay off in the sition and refocusing our commercial sales efforts coming years. on “deposit rich” prospects. 4. Execute “Value Improvement Agenda” Fourth, we want to increase our focus on organic revenue growth in insurance, particularly through Our fourth key objective for 2006 encompasses six cross-sell of deposit-based commercial banking areas where we see significant opportunity to imme- relationships to insurance clients, where we have diately improve performance. First, we want to drive excellent opportunities. a higher level of performance for our new regions by increasing our marketing efforts and fully utilizing our Fifth, we want to strengthen our Wealth Management / strong sales culture. In particular, we will strive to Private Banking platform and refocus on deposit accelerate efficiency improvement and deposit acqui- gathering. BB&T has largely been built by acquiring sition in these regions. Realizing our potential in new community banks and thrifts that did not have signifi- markets continues to present a tremendous opportu- cant trust businesses. Our Wealth Management / nity for revenue growth since more than half of our Private Banking business continues to evolve and regions have been a part of BB&T for less than five expand, and we are optimistic that we are on the years. While these new regions are improving and verge of significantly accelerating the growth rates some are doing very well, there are still significant and profitability of this division. differences in the overall performance of the new Finally, we will leverage our competitive advantages regions compared to our core regions. to selectively pursue merger and acquisition partners. Second, we are devoting extra energy to retail deposit We will be very disciplined in this effort, however, and base relationship growth throughout our regions. will not lose focus on organic growth initiatives. We BB&T has long been an organization led by lending. believe internal growth is far more important at this We see a significant opportunity for profitable deposit stage than growing through mergers and acquisitions. growth in our retail franchise, including increased ¬ 20
  23. 23. © 2006 BRYAN LARSEN ALL RIGHTS RESERVED ¬ In closing, I want to extend my sincere appreciation to Alfred E. Cleveland and Albert F. Zettlemoyer, who both retired from BB&T’s Corporate Board of Directors in 2005. They provided strong leadership and demonstrated a loyal commitment to BB&T and our shareholders during their years of service. I also want to personally thank Scott E. Reed, who retired as BB&T’s Chief Financial Officer in June. Scott made a tremendous contribution to BB&T’s evolution and financial performance during his 33 years with the company, including 24 years as Chief Financial Officer. BB&T’s vision is to create the best financial institution possible. Our passion is to consistently provide our clients with better value through rational innovation and productivity improvement. While we face many challenges, I am personally very optimistic about BB&T’s future. We have strong relationships with our clients, high-quality employees, healthy markets, excellent technology and products, rational strategies for growth and profitability and the right philosophy for future prosperity. As always, thank you for your support as a BB&T shareholder. Sincerely, John A. Allison Chairman and Chief Executive Officer February 27, 2006 21
  24. 24. Corporate Board of Directors BB&T ANNUAL REVIEW 05 John A. Allison IV Tom D. Efird James H. Maynard Chairman and President Chairman and Chief Executive Officer Standard Distributors, Inc. Chief Executive Officer BB&T Corporation and Gastonia, NC Investors Management Corporation Branch Banking and Trust Company Chairman Winston-Salem, NC Barry J. Fitzpatrick Golden Corral Corporation Chairman Raleigh, NC Jennifer S. Banner Branch Banking and Trust Chief Executive Officer Company of Virginia Albert O. McCauley Schaad Properties Great Falls, VA President and Knoxville, TN Chief Executive Officer L. Vincent Hackley, Ph.D. McCauley & McDonald Anna R. Cablik President and Investments, Inc. President Chief Executive Officer Fayetteville, NC Anasteel & Supply Company, LLC Hackley & Associates and Anatek, Inc. of North Carolina J. Holmes Morrison Marietta, GA Chapel Hill, NC Retired Chairman, President and Chief Executive Officer Nelle R. Chilton Jane P. Helm One Valley Bancorp, Inc. Director and President Vice Chancellor of Business Affairs Charleston, WV Dickinson Fuel Company, Inc. Appalachian State University Charleston, WV Boone, NC Nido R. Qubein President Ronald E. Deal John P. Howe III, M.D. High Point University Chairman President and Chairman Wesley Hall, Inc. Chief Executive Officer Creative Services, Inc. Hickory, NC Project HOPE (Health Opportunities for High Point, NC People Everywhere) Washington, D.C. E. Rhone Sasser Retired Chairman and Chief Executive Officer United Carolina Bancshares Corporation Whiteville, NC 22
  25. 25. Executive Management John A. Allison IV Christopher L. Henson Chairman and Senior Executive Vice President Chief Executive Officer and Chief Financial Officer Ricky K. Brown Kelly S. King Senior Executive Vice President Chief Operating Officer and Banking Network Manager Steven B. Wiggs W. Kendall Chalk Senior Executive Vice President Senior Executive Vice President and Chief Marketing Officer and Chief Credit Officer C. Leon Wilson III Barbara F. Duck Senior Executive Vice President Senior Executive Vice President and Operations Division Manager and Production and Risk Manager Robert E. Greene Senior Executive Vice President and Administrative Services Manager 23
  26. 26. Market Coverage BB&T Headquarters BB&T Commercial Finance Laureate Capital BB&T Leasing Lendmark Financial Services Prime Rate Premium Finance Regional Acceptance She eld Financial Vine Street Scott & Stringfellow BB&T Insurance BB&T Capital Markets BB&T Community Branch Locations Percentage of Deposit Market Number of BB&T’s Deposits (2) Share Rank (2) Branches (3) North Carolina (1) 27 % 2nd 334 Virginia 29 2nd 404 Georgia 8 6th 119 Kentucky 5 4th 92 South Carolina 8 3rd 99 West Virginia 6 1st 80 Maryland 8 6th 127 Tennessee 2 7th 47 Florida 5 11th 90 Washington, D.C. 2 5th 9 (1) Excludes home office deposits (2) Source: SNL Financial (3) BB&T also operates two branches in Alabama and one branch in Indiana 24
  27. 27. Map generated by SpatiaLogic 25
  28. 28. Shareholder Information Purpose BB&T’s ultimate purpose is to create superior, long-term economic rewards for our shareholders. Stock Exchange and Trading Symbol The common stock of BB&T Corporation is traded on the New York Stock Exchange under the symbol BBT. Stock Performance* The accompanying graph reflects the performance of a $100 investment in BB&T’s stock since December 31, 1995, the year end following the completion of the BB&T and Southern National Corporation merger-of-equals, in comparison with other regional competitors, the S&P 500 Financials Index and the S&P 500 Index. Source: Bloomberg $426 BB&T $400 Bank of America S&P 500 Financials Index $300 Wachovia SunTrust S&P 500 Index $200 $100 ’05 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 Total Compound Annual Return to Shareholders* BB&T S&P 500 S&P Financials Index Index 5 Year 5.7 % .6 % 3.8 % 10 Year 15.6 9.1 13.3 15 Year 18.8 11.5 17.0 20 Year 14.8 11.9 N/A * Assumes reinvestment of all cash dividends in additional shares of the applicable stock or index. 26
  29. 29. “Dividend Achievers represent the elite of the U.S. stock market.” Dividends Paid Per Share Diluted Earnings Per Share $ Jonathan Worrall $ | based on operating earnings Chief Executive Officer, Mergent, Inc. 3.04 1.46 3.00 1.50 28 Dividend History 1.25 BB&T has paid a cash dividend every year since 1903 and has increased its dividend every year for 34 consecutive years. 1.00 Dividend Recognitions 2.00 • S&P 500 Dividend Aristocrats and S&P High Yield .75 23 Dividend Aristocrats • Mergent Dividend Achiever .50 Dividend Reinvestment Plan .25 The Dividend Reinvestment Plan enables shareholders to reinvest dividends and/or invest additional cash in full or fractional shares of BB&T Corporation on a regular basis. 1.00 .00 18 For more information, contact’01 ’02 ’03 Services’05 Shareholder ’04 in ’05 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 Winston-Salem, North Carolina, at 336 733-3477. BB&T’s 10-year compound annual dividend growth rate is 13.0% compared to 4.9% for the S&P 500. Cash Basis Diluted Quarterly Common Stock Prices and Dividends Paid Earnings Per Share Dividend Payout Ratio $ | based on cash basis operating earnings % 2005 2004 3.20 Quarter High Low Dividend High Low Dividend $ 3.00 60 42.24 1st $ $ 37.68 $ .35 $ 38.80 34.48 $ .32 2nd 40.95 37.04 .35 37.91 33.02 .32 3rd 43.00 38.56 .38 40.46 36.38 .35 48.3%43.25 4th 43.92 37.39 .38 38.67 .35 45 50 2.00 40 3 Selected Market Information 2005 2004 2003 2002 2001 30 Market capitalization (in billions) $ 22.76 $ 23.14 $ 20.94 $ 17.40 $ 16.45 Book value per share 20.49 19.76 18.33 15.70 13.50 Dividend yield 3.48 % 3.19 % 3.16 % 1.00 % 2.97 2.71 % 20 Dividend payout ratio 48.3 47.5 58.4 40.0 45.6 1 10 Cash Dividends 2005 2004 2003 2002 2001 0 Cash dividends paid per share0 $ 1.46 $ 1.34 $ 1.22 $ 0.001.10 $ .98 Increase from prior year .12 .12 .12 .12 .12 ’01 ’02 ’03 14.0 % ’05 ’04 Percentage increase from prior year ’95 ’96 ’97 ’98 9.0 % ’00 ’01 ’02 ’03 ’04 ’05 10.9 % ’99 9.8 % 12.2 % Five-year compound annual growth rate 11.2 % Ten-year compound annual growth rate 13.0 % 27
  30. 30. Consolidated Balance Sheets BB&T Corporation and Subsidiaries (Dollars in thousands, except per share data) December 31 December 31 2005 2004 Assets Cash and due from banks $ 2,185,571 $ 1,782,323 Interest-bearing deposits with banks 410,380 1,003,125 Federal funds sold and securities purchased under resale agreements or similar arrangements 286,233 240,387 Trading securities at fair value 706,518 334,256 Securities available for sale at fair value 19,782,966 18,838,196 Securities held to maturity at amortized cost (fair value: $125 at December 31, 2004) – 125 Loans held for sale 628,834 613,476 Loans and leases, net of unearned income 74,394,654 67,549,125 (804,932 ) Allowance for loan and lease losses (825,300 ) Loans and leases, net 73,569,354 66,744,193 Premises and equipment, net of accumulated depreciation 1,286,909 1,283,546 Goodwill 4,255,998 4,124,241 Core deposits and other intangible assets 487,525 513,539 Other assets 5,569,471 5,031,234 Total assets $ 109,169,759 $ 100,508,641 Liabilities and Shareholders’ Equity Deposits: Noninterest-bearing deposits $ 13,476,939 $ 12,246,248 Savings and interest-checking 4,366,015 4,490,214 Money rate savings 24,548,872 23,427,797 Certificates of deposit and other time deposits 31,889,973 27,535,078 Total deposits 74,281,799 67,699,337 Federal funds purchased, securities sold under repurchase agreements and short-term borrowed funds 6,561,719 6,687,872 Long-term debt 13,118,559 11,419,624 Accounts payable and other liabilities 4,078,568 3,827,334 Total liabilities 98,040,645 89,634,167 Shareholders’ equity: Preferred stock, $5 par, 5,000,000 shares authorized, none issued or outstanding at December 31, 2005, or at December 31, 2004 – – Common stock, $5 par, 1,000,000,000 shares authorized; 543,102,080 issued and outstanding at December 31, 2005, and 550,406,287 at December 31, 2004 2,715,510 2,752,032 Additional paid-in capital 2,828,584 3,121,716 Retained earnings 5,951,135 5,112,034 Unvested restricted stock (9,881 ) (107 ) Accumulated other comprehensive income, net of deferred income (111,201 ) (356,234 ) taxes of $(207,319) at December 31, 2005, and $(66,662) at December 31, 2004 Total shareholders’ equity 11,129,114 10,874,474 Total liabilities and shareholders’ equity $ 109,169,759 $ 100,508,641 28

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