The “Branch” in Branch Banking and Trust refers not to the kind that dispenses money but to Alpheus Branch, who founded the predecessor to financial holding company BB&T Corp. in North Carolina in 1872. Not that the company certainly doesn’t operate plenty of branches — 1,800 of them, as a matter of fact, plus more than 2,400 automated teller machines, in 12 states and the District of Columbia.
BB&T is one of the United States’ largest financial holding companies, controlling more than $174.6 billion in assets. Its banking subsidiaries, including flagship Branch Banking and Trust, are organized as a group of community banks, and generated revenues of approximately $11 billion during 2011, earning the No. 220 position on the Fortune 500. BB&T maintains headquarters in Winston-Salem, N.C., and has roughly 33,000 employees.
LEGAL TEAM AND OUTSIDE COUNSEL
The bank’s 69-member legal department has 38 lawyers, general counsel Bob Johnson included. BB&T relies on its “Preferred Efficient Partner Network” when selecting outside law firms. The program consists of two levels: The first includes 25 national firms that provide expertise in multiple practice areas and locations. Among them are Washington’s Arnold & Porter and BuckleySandler; Mayer Brown of Chicago; Squire, Sanders & Dempsey; Womble Carlyle Sandridge & Rice; K&L Gates; and Charlotte, N.C.’s Robinson Bradshaw & Hinson.
Level 2 comprises more than 100 regional firms that handle work in their geographical locations; Johnson tends to use them for litigation or administrative matters. They include Quirk & Quirk of Atlanta; Howard, Stallings, From & Hutson of Raleigh, N.C.; Akron, Ohio’s Roetzel & Andress; and New Orleans’ Jones, Walker, Waechter, Poitevent, Carrère & Denègre.
At the moment, 80 percent of the work is handled by outside firms, but Johnson is trying to steer more work in-house. When it comes to setting rates, he is “basically looking for creativity,” he said. “The market has changed, but there is still a place for billable hours.”
Johnson has been all over the map in terms of experimenting with alternative fee arrangements, having used volume discounts, fixed fees, holdbacks, deferrals and contingent fees — along, of course, with billable hours. He actively negotiates with his outside providers.
There is no typical workday. “I wear multiple hats,” the self-professed generalist said. “You name it, I’ve touched it.” His responsibilities encompass legal matters; corporate governance; regulatory matters; litigation; information technology; and human resources. Board preparation and meetings involve him in minutes-taking and records-keeping. He spends considerable time managing professional relationships, and “I have a lot of them.” He oversees budgets and legal risk, and communicates with shareholders via BB&T’s shareholder-engagement program. He reports to senior executive vice president Robert Greene.
A securities lawyer by background, Johnson works closely with financial officers on the public reporting side. His department prepares proxy statements. Johnson referred to Dodd-Frank Act compliance as “one of the bigger challenges in a regulatory environment, with thousands of pages and hundreds of new rules.” He takes advice from trade associations to help him evaluate the new requirements. He in turn advises the board and management on the legislation. “We will be living with it for a significant chunk of the remainder of my career,” he said.
Once or twice a month, Johnson meets with regulators, predominantly in Washington. His interactions with trade associations most often take him to New York. He visits each BB&T office from time to time as well. BB&T is subject to bank-specific laws including the Bank Secrecy Act, anti-money laundering restrictions and debt rules. Privacy rules, and restrictions on sharing information among affiliates, also apply. There are liquidity and capital requirements, rules covering third-party credit risk, and the requirement to have a “living will” — a plan to resolve any crisis the bank might hit. The Securities Act of 1933 and Securities Exchange Act of 1934 must be followed, as do the requirements of the Federal Deposit Insurance Corp. (FDIC).
During the credit crisis of 2008, BB&T received $3.1 billion in Troubled Asset Relief Program money from the U.S. Treasury. After BB&T applied for, and received, regulatory approval to repay it, the money was returned “very early on with profit to the taxpayers,” Johnson said.
In 2009, BB&T acquired failed Alabama lender Colonial BancGroup Inc. from the FDIC; it bought $22 billion in assets and more than $20 billion in deposits. Other significant acquisitions have included the purchase of BankAtlantic, the primary subsidiary of BankAtlantic Bancorp Inc., and the acquisition of Crump Group Inc., a wholesale insurance business in New Jersey. Johnson oversees a deputy and attorneys who advise BB&T’s insurance group; it represents the bank’s largest noninterest-bearing business, Johnson said — having amassed $1 billion in revenues last year.
BB&T lacks a formal pro bono program. However, its attorneys are among the 26,000 employees who have participated in the Lighthouse Project, which provides therapy for children with a broad array of sensory disabilities including autism. Each department and business line receives money to spend on a community project.
ROUTE TO THE TOP
Johnson graduated in 1994 from Miami University (Ohio). Three years later, he earned his J.D. from Ohio State University Michael E. Moritz College of Law. Until 2005, he practiced in Squire, Sanders & Dempsey’s Cleveland office. He was a securities lawyer working with financial institutions, focusing on mergers and acquisitions and corporate governance.
In 2005, he was invited to join BB&T. Initially, he managed the M&A group as vice president, later moving up to senior vice president and manager of the corporate securities tax practice group. Johnson assumed the deputy general counsel role in 2008 and was promoted to lead the department in August 2010.
Johnson is a native of Dayton, Ohio. He and his wife, Julie, a homemaker, have three children: Logan, 12; Riley, 10; and Olivia, 7. Playing golf and sharing time with his children are Johnson’s favorite leisure activities.
His advice to a potential future successor: “There is no substitute for making time for each relationship. Value your relationships and your reputation. And apply good old-fashioned work.”
LAST BOOK AND MOVIE
The Energy Bus: 10 Rules to Fuel Your Life, Work, and Team with Positive Energy, by Jon Gordon; and Mission: Impossible — Ghost Protocol.