Kelly King wins high marks for BB&T leadership over past five years

Jan. 26--The timing couldn't have been more daunting, and yet the opportunities more ripe, as Kelly King took over as chief executive of BB&T Corp. in January 2009.

King was the hand- and board-picked replacement for a retiring John Allison, who had run BB&T during 20 years of stunning growth in terms of total assets ($5 billion to $136.5 billion), profitability ($44 million to $1.73 billion) and bank acquisitions.

Allison was not only the face of the bank, but also its motivational force. So much so that some analysts considered King, age 60 at the time of his promotion, as merely a caretaker.

King also assumed his duties as the U.S. financial-services industry was teetering near a cliff. Blue-chip stalwart Wachovia Corp. was being absorbed by Wells Fargo & Co. after Wachovia almost collapsed three months earlier from the weight of toxic residential mortgages and other loans.

Yet, King was at the helm of one of the nation's largest banks with an opportunity to put his fingerprints on its growth and define his legacy even though he stresses that he hadn't needed such a post to validate his career or himself.

"It was such a critical period, and a lot was happening that was pretty scary in terms of the overall global economy and industry conditions," King said.

"We were so involved in dealing with it that I never felt I had to sit back and say 'Wow,' this is challenging. I was immersed in doing what needed to be done.

"I never had a sense that we would not make it through," King said. "I don't mean that to be overly confident. But it never occurred to me that we wouldn't."

Fast forward five years plus change, and it's clear that King was no caretaker, particularly after he took on being chairman in January 2010.

His steady, deliberate hand on the BB&T helm enabled it to be one of just two large banks to sail through the economic tsunami profitable in every quarter. He did that even while taking over and integrating one of the largest bank failures in U.S. history, Colonial Bank.

King's commitment to product and services diversification enabled BB&T to become one of the nation's largest insurance providers, as well as a national player in corporate banking.

The bank's return to shareholders includes these stunning accomplishments since the depth of the financial crisis in 2009: share price up 47 percent; profit up 37 percent; total assets up 33 percent -- rising from 14th in the U.S. to ninth; and market capitalization up 56 percent.

King stressed those accomplishments weren't his alone, but from the talents and the candor provide by the bank's executive management team.

"In early 2009, I wasn't sure that we would make it through without losing money," King said.

"But we had relatively strong capital. We had not ventured into some of the more risky investments that others had made, so I didn't expect major business disruptions and worked hard to make sure it didn't happen.

"We stayed focused on our mission, our values, our fundamental strategies, with our clients, associates, communities and shareholders. We don't ride all that high in the boom times, and we don't bust in the bad times. You can depend on us."

Kevin Fitzsimmons, an analyst with Sandler O'Neill and Partners, said, "There is no doubt Kelly King has distinguished him and BB&T for the top-tier performance the bank has demonstrated over the long term, including through the financial crisis."

Fitzsimmons praised King for not only generating "consistently impressive profitability," but also "avoiding some of the big pitfalls contributing to the financial downturn."

"John Allison's shoes were definitely big ones to fill, but I think Kelly -- in keeping the culture and consistent performance over his tenure -- made it less about the man in the CEO seat, and more about the on-going model/philosophy of the company."

Volunteers in the community

It's typical in the banking industry for top management to retire anytime after they turn 55. King, who turned 65 last September, is the last active member of a five-person executive management team that from 1989 to 2009 made BB&T a model for how to prosper a community bank.

Those judging King strictly by age typically are wowed by the energy, vision and earnestness he brings each day to his 14th-floor office.

"I take it as a deep, personal responsibility that those 35,000 employees and their families, those millions of clients, those thousands of communities, are directly dependent on what I do," King said.

"It's a very humbling experience. It's also exciting to know as well you can make a positive impact with those daily decisions."

The outpouring of his strong Christian faith, as well as growing up poor in Eastern North Carolina, has motivated him to be a driving force for the less fortunate, both in Forsyth County and in the 11 states where BB&T has branches.

Project Lighthouse was born out of that sense in 2009. The concept was simple: dedicate $100 per employee, as well as five volunteer hours on company time, to the betterment of their communities.

Since the project debuted, BB&T employees have provided 265,000 hours of volunteer time toward more than 5,500 community efforts. Those efforts have touched the lives of more than 8 million people.

"In talking with employees over the years, we heard a lot of understandable concern on their part about friends and neighbors losing jobs, dealing with all kinds of hardships," King said.

"Project Lighthouse gave many of our associates the ability to be part of something positive, something bigger than themselves."

"Our company has been blessed for a long, long time because our communities have supported us, and we have a responsibility to give back to them, particularly when times get tough."

King said it is natural that "your personal characteristics as a CEO bleed into the organization, good and bad."

"I have a strong conviction that this is not my bank. I should not, and I try really hard not to, allow my personal beliefs or preferences to influence business decisions.

"However, I am a human being, and I can't help who I am when I enter the building each day."

King said he is fortunate that his belief system is consistent with BB&T's values and mission.

"Because they are so aligned, it gives me peace and happiness every day doing my job," King said.

"BB&T is distinguished for being consistent with its values and mission, and if you go throughout our communities, we really do walk the talk."

Keeping BB&T grounded

Thad Woodard, president and chief executive of the N.C. Bankers Association, said King remains as sharp a banking CEO in his decision making as exists in the country.

"His ability to embrace the BB&T culture and values kept the bank from going off in the wrong direction in the pursuit of profit and growth," Woodard said. "His vision, for now and for the future, keeps BB&T grounded. He will be around as long as he wants to be."

Tony Plath, a finance professor at UNC Charlotte, calls King "a quiet giant of a banker" for sailing BB&T through the choppy economic waters "without drama, fanfare or calling undue attention to himself or the bank."

"Try to think back and recall any sort of management crisis or headline-grabbing problem or negative media event at BB&T over the course of the last several years that developed into an extended, prolonged problem for the bank and changed the public perception of its image," Plath said.

"There simply aren't any. You can't do the same about their peers, even Wells Fargo. That's Kelly's legacy, his accomplishment, and his gift to the shareholders, customers and employees of the bank."

King's performance hasn't escaped the eye of Allison, who remains on the BB&T board.

"I'm proud of his accomplishments and his commitment to BB&T's values even as economic challenges and increased industry regulations have put severe pressure on all large banks," Allison said.

"I knew from Kelly's time on the executive management team that he had the energy, vision and personality to take BB&T to new heights. As such, the bank and its shareholders have been rewarded for their faith in him."

Goals for future

King knows he can't get through a big-picture interview without talking retirement.

"The issues about my retirement have come and gone, the last being when my contract was amended so I could work past 65," King said. "There was no consideration from the board of me retiring at 65.

"Now, I hope and believe investors and analysts are just focused on me running the company."

That said, King said BB&T is focused on management succession at all levels, in part because the two CEOs who preceded Allison both died in their early to mid-50s although apparently in good health at the time.

"We have multiple candidates who are capable of succeeding me," King said. "The odds are extremely high that when I make the decision to retire, we will have a very smooth transition to an internal candidate.

"Having that message to give to the investment community is huge because it's a clear message that BB&T is concerned about the long term with the culture and process to make it happen."

When King is asked what is left to accomplish, he acknowledges stated goals, such as gaining top-five market share in each state it serves and continuing to diversify products and services.

"When I say we are focused on our mission and values, that doesn't inherently preclude us toward growth," King said. "I do expect us, and will work hard, for us to grow organically and through acquisition because it is it a substantial way we execute on the mission.

"You see companies sometimes so focused on growth that they sacrifice their quality to their existing clients. They become so focused on profitability that they take advantage of their associates.

"When growing makes sense and it enhances your ability to perform for your constituents, then you should do it," he said. "When it does not make sense, you should not."

King said the ultimate goal, which he acknowledges is utopian, is "creating the best financial institution possible while upholding our values, and we are moving toward it."

"I like that because it doesn't declare that you have to be in all 50 states or you are among the five largest banks. You don't want to lose sight of the constituents in the pursuit of growth.

"My goal for my time remaining at BB&T is to keep moving toward accomplishing that goal, and it will be the mission of my successor as well."

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