BB&T Corp.'s (BBT) fourth-quarter profit rose 6.1%, helped
by better results in its community-banking segment and a gain on a
sale, as the bank reported lower revenue.
Regional banks like BB&T rely heavily on lending income and
have been pressured recently by low interest rates. Any shift in
rates can affect how much it costs banks to borrow money and how
much they can charge to lend that money to customers. U.S. banks
also are grappling with a slow U.S. recovery and a range of new
regulations.
BB&T's net interest margin, its profit margin from lending
and investing, was 3.56% in the fourth quarter, compared with 3.84%
a year earlier and 3.68% in the prior quarter.
Overall, BB&T posted a profit of $537 million, or 75 cents a
share, compared with $506 million, or 71 cents a share, a year
earlier. Results include a gain of $19 million from the sale of a
consumer-lending unit.
Revenue declined 6% to $2.38 billion as net interest income fell
7.7% to $1.4 billion and noninterest income dropped 3.4% to $985
million
Analysts surveyed by Thomson Reuters had projected earnings of
71 cents a share on revenue of $2.37 billion.
The decrease in noninterest income came in large part because of
a $131 million decline in mortgage-banking income.
While banking executives have noted signs that loan demand has
picked up among both consumers and businesses, most lenders have
yet to see broad-based growth across their loan segments.
Chairman and Chief Executive Kelly King said in a statement that
loans "grew modestly" in the quarter, noting the company saw demand
pick up in the second half of the quarter.
BB&T's loan portfolio increased 1.1% from a year earlier to
$114.8 billion but was down 1.2% from the third quarter--a drop the
bank attributed to the consumer-lending unit it sold. That business
had about $500 million in loans.
Tepid loan growth and low interest rates have put added pressure
on banks to cut costs. BB&T made solid headway on this front in
the quarter, reducing its non-interest expenses to $1.46 billion, a
decline of 2.2% from a year earlier and down 4% from the previous
quarter.
Profit in the company's community-banking segment, by far its
largest, rose to $275 million from $212 million in the year-earlier
quarter.
"Credit quality improved dramatically in 2013 and fourth-quarter
credit metrics continue to be very strong," Mr. King said.
Average loans and leases held for investment totaled $114.8
billion, up 1.1% from a year earlier and down slightly
sequentially.
Last month, BB&T reached a deal to buy 21 bank branches in
Texas from Citigroup Inc. (C), building on the southeast regional
lender's expansion in the Lone Star state.
BB&T's shares were down slightly at $38.75 in pre-market
trading on Thursday.
Write to Andrew R. Johnson at andrew.r.johnson@dowjones.com
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