WINSTON-SALEM, North Carolina,
April 23, 2015 /PRNewswire/ --
BB&T Corporation (NYSE: BBT) today reported quarterly earnings
for the first quarter of 2015. Net income available to common
shareholders was $488 million,
compared to $496 million earned in
the first quarter of 2014. Earnings per diluted common share
totaled $0.67 for the quarter,
compared to $0.68 for the first
quarter of last year. Net income available to common shareholders
was affected by $13 million in
pre-tax merger-related charges, or $0.01 per diluted share.
"Given the challenges of the current rate environment, I am
pleased with our financial performance and other accomplishments
during the quarter," said Chairman and Chief Executive Officer
Kelly S. King. "We enjoyed solid
loan growth, good expense control in a seasonally challenging
quarter and outstanding credit quality.
"Revenues for the first quarter were $2.3
billion, up $34 million from
the first quarter of 2014. These results were driven by continued
strength in our fee-based businesses, with insurance achieving a
record quarter. Excluding residential mortgage loans, average loans
grew 5.4% compared to last quarter, and our credit metrics improved
across the board.
"We are also pleased that the Federal Reserve did not object to
our capital plan, which includes an increase in the quarterly
dividend to $0.27, a 12.5% increase,
three previously announced acquisitions and share buybacks of up to
$820 million beginning in the third
quarter of 2015," said King.
"On April 1, we announced an
agreement to substantially increase our partnership interest in
AmRisc and to sell American Coastal Insurance Company, subject to
regulatory approval. AmRisc does not assume any underwriting risk
and represents an attractive fee income business for BB&T,
while the sale of American Coastal Insurance Company will eliminate
our exposure to potential underwriting losses in the future.
"We completed the acquisition of 41 branches in Texas, which added approximately $1.9 billion in deposits," said King. "In
addition, the pending acquisitions of The Bank of Kentucky and Susquehanna Bancshares are on
track to close later this year.
"Capping off a successful first quarter, we achieved a
significant milestone by launching our new general ledger system.
We are very pleased with this accomplishment as we continue to
automate business processes to make our company more efficient,"
said King.
First Quarter 2015 Performance
Highlights
- Taxable equivalent revenues were $2.3
billion for the first quarter, down $49 million from the fourth quarter of 2014
- Net interest margin was 3.33%, down three basis points compared
to the prior quarter due to lower rates on new loans and runoff of
loans acquired from the FDIC
- Insurance income was up $31
million, an annualized increase of 30.7% that reflects
seasonal growth in employee benefit commissions
- Maintained a consistent fee income ratio of 45.8% compared to
46.2% in the prior quarter, reflecting revenue diversification
- Noninterest expense was $1.4
billion, an annualized increase of 8.1% compared to the
prior quarter
- Personnel expense was up $36
million due to higher pension costs and seasonal increases
in payroll taxes and fringe benefits, partially offset by a
reduction in incentives and a slight headcount reduction
- Loan-related expense decreased $33
million primarily due to a fourth quarter charge
- Professional services decreased $14
million due to reduced legal and consulting costs
- Other expense was up $42 million
largely due to prior period benefits for franchise taxes and
insurance-related expenses
- The adjusted efficiency ratio was 58.5%
- Average loans and leases held for investment increased 1.8% on
an annualized basis compared to the fourth quarter of 2014; up 5.4%
excluding residential mortgage
- Average C&I loans increased 10.7%
- Average sales finance loans increased 9.9%
- Average residential mortgage loans decreased 8.1%, reflecting
the strategic decision to sell conforming mortgage loan
production
- Average deposits decreased $784
million, or 2.4% annualized, compared to the prior quarter
- Average noninterest-bearing deposits increased $571 million, or 5.9%
- Average interest-bearing deposits decreased $1.4 billion, driven by time deposits, which
decreased $3.0 billion
- Average interest-bearing deposit costs were 0.25%, flat
compared to the prior quarter
- Deposit mix improved, with average noninterest-bearing deposits
representing 30.6% of total deposits, compared to 30.0% in the
prior quarter
- Asset quality continued to improve
- Nonperforming assets decreased $17
million, or 2.2%, from December 31,
2014
- Delinquent loans decreased $280
million, or 19.6%
- The allowance for loan loss coverage ratio was 2.45 times
nonperforming loans held for investment in the first quarter,
versus 2.39 times in the fourth quarter
- Capital levels remained strong across the board
- Common equity tier 1 to risk-weighted assets was 10.5%, or
10.3% on a fully phased-in basis
- Tier 1 risk-based capital was 12.2%
- Total capital was 14.5%
- Leverage capital was 10.1%
- Tangible common equity to tangible assets was 8.0%
Earnings presentation and Quarterly Performance
Summary
To listen to BB&T's live first quarter 2015 earnings
conference call at 8 a.m. (ET) today,
please call 1-888-632-5009 and enter the participant code 5184622.
A presentation will be used during the earnings conference call and
is available on our website at www.bbt.com. Replays of the
conference call will be available for 30 days by dialing
888-203-1112 (access code 4313363).
The presentation, including an appendix reconciling non-GAAP
disclosures, is available at www.bbt.com.
BB&T's first quarter 2015 Quarterly Performance Summary,
which contains detailed financial schedules, is available on
BB&T's website at www.bbt.com.
About BB&T
As of March 31, 2015, BB&T is
one of the largest financial services holding companies in the U.S.
with $189.2 billion in assets and
market capitalization of $28.2
billion. Based in Winston-Salem,
N.C., the company operates 1,875 financial centers in 12
states and Washington, D.C., and
offers a full range of consumer and commercial banking, securities
brokerage, asset management, mortgage and insurance products and
services. A Fortune 500 company, BB&T is consistently
recognized for outstanding client satisfaction by the U.S. Small
Business Administration, Greenwich Associates and others. More
information about BB&T and its full line of products and
services is available at www.bbt.com.
Capital ratios are preliminary. Credit quality data excludes
government guaranteed GNMA loans where applicable.
This news release contains financial information and
performance measures determined by methods other than in accordance
with accounting principles generally accepted in the United States of America ("GAAP").
BB&T's management uses these "non-GAAP" measures in their
analysis of the Corporation's performance and the efficiency of its
operations. Management believes that these non-GAAP measures
provide a greater understanding of ongoing operations and enhance
comparability of results with prior periods as well as
demonstrating the effects of significant gains and charges in the
current period. The company believes that a meaningful analysis of
its financial performance requires an understanding of the factors
underlying that performance. BB&T's management believes that
investors may use these non-GAAP financial measures to analyze
financial performance without the impact of unusual items that may
obscure trends in the company's underlying performance. These
disclosures should not be viewed as a substitute for financial
measures determined in accordance with GAAP, nor are they
necessarily comparable to non-GAAP performance measures that may be
presented by other companies. Below is a listing of the types of
non-GAAP measures used in this news release:
- Tangible common equity and related ratios are non-GAAP
measures. The return on average risk-weighted assets is a non-GAAP
measure. BB&T's management uses these measures to assess the
quality of capital and believes that investors may find them useful
in their analysis of the Corporation.
- The ratio of loans greater than 90 days and still accruing
interest as a percentage of loans held for investment has been
adjusted to remove the impact of loans that are or were covered by
FDIC loss sharing agreements. Management believes that their
inclusion may result in distortion of these ratios such that they
might not be comparable to other periods presented or to other
portfolios that were not impacted by purchase accounting.
- Fee income and efficiency ratios are non-GAAP in that they
exclude securities gains (losses), foreclosed property expense,
amortization of intangible assets, merger-related and restructuring
charges, the impact of FDIC loss share accounting and other
selected items. BB&T's management uses these measures in their
analysis of the Corporation's performance. BB&T's management
believes these measures provide a greater understanding of ongoing
operations and enhance comparability of results with prior periods,
as well as demonstrating the effects of significant gains and
charges.
- Return on average tangible common shareholders' equity is a
non-GAAP measure that calculates the return on average common
shareholders' equity without the impact of intangible assets and
their related amortization. This measure is useful for evaluating
the performance of a business consistently, whether acquired or
developed internally.
- Core net interest margin is a non-GAAP measure that adjusts
net interest margin to exclude the impact of interest income and
funding costs associated with loans and securities acquired in the
Colonial acquisition. BB&T's management believes that the
exclusion of the generally higher yielding assets acquired in the
Colonial acquisition from the calculation of net interest margin
provides investors with useful information related to the relative
performance of the remainder of BB&T's earning assets.
A reconciliation of these non-GAAP measures to the most
directly comparable GAAP measure is included in BB&T's First
Quarter 2015 Quarterly Performance Summary, which is available on
BB&T's website at www.bbt.com.
This news release contains "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act
of 1995, regarding the financial condition, results of operations,
business plans and the future performance of BB&T that are
based on the beliefs and assumptions of the management of BB&T
and the information available to management at the time that these
disclosures were prepared. Words such as "anticipates," "believes,"
"estimates," "expects," "forecasts," "intends," "plans,"
"projects," "may," "will," "should," "could," and other similar
expressions are intended to identify these forward-looking
statements. Such statements are subject to factors that could cause
actual results to differ materially from anticipated results. Such
factors include, but are not limited to, the following:
- general economic or business conditions, either nationally
or regionally, may be less favorable than expected, resulting in,
among other things, a deterioration in credit quality and/or a
reduced demand for credit, insurance or other services;
- disruptions to the credit and financial markets, either
nationally or globally, including the impact of a downgrade of U.S.
government obligations by one of the credit ratings agencies and
the adverse effects of recessionary conditions in Europe;
- changes in the interest rate environment and cash flow
reassessments may reduce NIM and/or the volumes and values of loans
made or held as well as the value of other financial assets
held;
- competitive pressures among depository and other financial
institutions may increase significantly;
- legislative, regulatory or accounting changes, including
changes resulting from the adoption and implementation of the
Dodd-Frank Act may adversely affect the businesses in which
BB&T is engaged;
- local, state or federal taxing authorities may take tax
positions that are adverse to BB&T;
- a reduction may occur in BB&T's credit ratings;
- adverse changes may occur in the securities
markets;
- competitors of BB&T may have greater financial resources
and develop products that enable them to compete more successfully
than BB&T and may be subject to different regulatory standards
than BB&T;
- natural or other disasters could have an adverse effect on
BB&T in that such events could materially disrupt BB&T's
operations or the ability or willingness of BB&T's customers to
access the financial services BB&T offers;
- costs or difficulties related to the integration of the
businesses of BB&T and its merger partners may be greater than
expected;
- expected cost savings or revenue growth associated with
completed mergers and acquisitions may not be fully realized or
realized within the expected time frames;
- significant litigation could have a material adverse effect
on BB&T;
- deposit attrition, customer loss and/or revenue loss
following completed mergers and acquisitions may be greater than
expected;
- cyber-security risks, including "denial of service,"
"hacking" and "identity theft," could adversely affect BB&T's
business, financial performance, or reputation;
- failure to implement part or all of the Company's new ERP
system could result in impairment charges that adversely impact
BB&T's financial condition and results of operations and could
result in significant additional costs to BB&T; and
- failure to execute on the Company's strategic or operational
plans, including the ability to successfully complete and/or
integrate mergers and acquisitions, could adversely impact
BB&T's financial condition and results of operations.
Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date of this
report. Actual results may differ materially from those expressed
in or implied by any forward-looking statement. Except to the
extent required by applicable law or regulation, BB&T
undertakes no obligation to revise or update publicly any
forward-looking statements for any reason.