WINSTON-SALEM, N.C.,
July 16, 2015 /PRNewswire/
-- BB&T Corporation (NYSE: BBT) today reported quarterly
earnings for the second quarter of 2015. Net income available to
common shareholders was $454 million,
compared to $424 million earned in
the second quarter of 2014, an increase of 7.1%. Earnings per
diluted common share totaled $0.62
for the quarter, compared to $0.58
for the second quarter of last year, an increase of 6.9%. Net
income available to common shareholders was affected by
$25 million in pre-tax merger-related
charges ($16 million after-tax), or
$0.02 per diluted share, and a
$34 million after-tax loss on the
sale of American Coastal, or $0.05
per diluted share.
"We are pleased to report solid results for the quarter, led by
improved loan growth and strong credit quality," said Chairman and
Chief Executive Officer Kelly S.
King. "We completed several strategic transactions during
the second quarter and reached an important milestone with the
recent approval of the Susquehanna merger.
"Revenues were $2.4 billion, up
$31 million, or 1.3% compared with
the second quarter of 2014. These results were driven by continued
strength in our fee-based businesses.
"We successfully completed our acquisition of The Bank of
Kentucky," said King. "This
strategic transaction added $1.6
billion in deposits and boosted us to the No. 2 marketplace
ranking in Kentucky, and we look
forward to expanding on this solid base with our diverse product
offerings and strong customer focus.
"We were very pleased to receive regulatory approval to acquire
Susquehanna Bancshares, which we expect to close on August 1. This transaction is very important
strategically and will drive improved growth and efficiency in
coming quarters.
"We reported an income tax benefit of $107 million as a result of a decision by the
U.S. Court of Appeals related to previously disallowed deductions
in connection with a financing transaction. We also extinguished
nearly $1 billion of higher cost FHLB
borrowings resulting in a $172
million pre-tax loss, or $107
million after-tax. The debt extinguishment will modestly
benefit our net interest margin going forward.
"We also completed the sale of American Coastal and the related
purchase of additional ownership in AmRisc," said King. "The sale
resulted in an after-tax loss of $34
million due to the allocation of goodwill upon disposal.
These transactions eliminate our exposure to future underwriting
losses and significantly increase our share of a historically
strong fee-based business."
Second Quarter 2015 Performance
Highlights
- Taxable equivalent revenues were $2.4
billion for the second quarter, up $23 million from the first quarter of 2015
- Net interest margin was 3.27%, down six basis points due to
lower rates on new loans and runoff of loans acquired from the
FDIC
- Mortgage banking income was up $20
million, an annualized increase of 72.9% that reflects
higher mortgage servicing income and higher commercial mortgage fee
income due to increased volume
- Fee income ratio was 46.3%, compared to 45.8% in the prior
quarter, reflecting continued revenue diversification
- Noninterest expense was $1.7
billion, up compared to the prior quarter primarily due to a
$172 million loss on early
extinguishment of debt
- Personnel expense was up $34
million due to increased production-related incentives due
to volume, seasonal increases in fringe benefits and approximately
500 additional full-time equivalent employees, which was primarily
due to acquisitions
- Merger-related and restructuring charges were $12 million higher as a result of increased
activity related to The Bank of Kentucky, Susquehanna and AmRisc/American
Coastal transactions
- The adjusted efficiency ratio was 59.2%
- Average loans and leases held for investment increased 3.9% on
an annualized basis compared to the first quarter of 2015; up 7.8%
excluding residential mortgage
- Average C&I loans increased 10.6%
- Average direct retail loans increased 12.6%
- Average other lending subsidiaries loans increased 13.6%
- Average residential mortgage loans decreased 7.4%, reflecting
the strategic decision to continue to sell conforming mortgage loan
production
- Average deposits increased $2.3
billion, or 7.2% annualized, compared to the prior quarter
- The Texas branch acquisition,
completed in late March, contributed approximately $1.7 billion of the average deposit growth
- The Bank of Kentucky
acquisition added approximately $190
million in average deposits as a result of closing on
June 19
- Excluding the impact of these acquisitions, average
noninterest-bearing deposits increased $1.4
billion
- Average interest-bearing deposit costs were 0.24%, down one
basis point compared to the prior quarter
- Deposit mix improved, with average noninterest-bearing deposits
representing 31.5% of total deposits, compared to 30.6% in the
prior quarter
- Asset quality remained strong
- Nonperforming assets decreased $36
million, or 4.7%, from March 31,
2015
- Delinquent loans increased $43
million, primarily due to seasonality
- The allowance for loan loss coverage ratio was 2.55 times
nonperforming loans held for investment at June 30, 2015, versus 2.45 times at March 31, 2015
- Capital levels remained strong across the board
- Common equity tier 1 to risk-weighted assets was 10.4%, or
10.2% on a fully phased-in basis
- Tier 1 risk-based capital was 12.1%
- Total capital was 14.3%
- Leverage capital was 10.2%
- Tangible common equity to tangible assets was 8.1%
EARNINGS
HIGHLIGHTS
|
|
|
|
|
|
|
|
|
|
Change
|
|
Change
|
(dollars in millions,
except per share data)
|
Q2
|
|
Q1
|
|
Q2
|
|
Q2 15 vs.
|
|
Q2 15 vs.
|
|
|
|
2015
|
|
2015
|
|
2014 (2)
|
|
Q1 15
|
|
Q2 14
|
Net income available
to common shareholders
|
$
|
454
|
|
$
|
488
|
|
$
|
424
|
|
$
|
(34)
|
|
$
|
30
|
Diluted earnings per
common share
|
|
0.62
|
|
|
0.67
|
|
|
0.58
|
|
|
(0.05)
|
|
|
0.04
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income -
taxable equivalent
|
$
|
1,348
|
|
$
|
1,347
|
|
$
|
1,378
|
|
$
|
1
|
|
$
|
(30)
|
Noninterest
income
|
|
1,019
|
|
|
997
|
|
|
958
|
|
|
22
|
|
|
61
|
|
Total
revenue
|
$
|
2,367
|
|
$
|
2,344
|
|
$
|
2,336
|
|
$
|
23
|
|
$
|
31
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average
assets (%)
|
|
1.06
|
|
|
1.18
|
|
|
1.04
|
|
|
(0.12)
|
|
|
0.02
|
Return on average
risk-weighted assets (%)
|
|
1.32
|
|
|
1.48
|
|
|
1.38
|
|
|
(0.16)
|
|
|
(0.06)
|
Return on average
common shareholders' equity (%)
|
|
8.20
|
|
|
9.05
|
|
|
8.04
|
|
|
(0.85)
|
|
|
0.16
|
Return on average
tangible common shareholders'
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
equity (%)
|
|
12.76
|
|
|
14.00
|
|
|
12.77
|
|
|
(1.24)
|
|
|
(0.01)
|
Net interest margin -
taxable equivalent (%)
|
|
3.27
|
|
|
3.33
|
|
|
3.43
|
|
|
(0.06)
|
|
|
(0.16)
|
Efficiency ratio (1)
(%)
|
|
59.2
|
|
|
58.5
|
|
|
58.4
|
|
|
0.7
|
|
|
0.8
|
|
|
(1)
|
Excludes certain
items as detailed in the non-GAAP reconciliations in the Quarterly
Performance Summary.
|
(2)
|
Applicable Q2 2014
amounts were revised as a result of the January 1, 2015 adoption of
new guidance related to the accounting for investments in qualified
affordable housing projects.
|
Second Quarter 2015 compared to First Quarter 2015
Consolidated net income available to common shareholders for the
second quarter of 2015 was $454
million, a decrease of $34
million compared to the first quarter of 2015. On a diluted
per common share basis, earnings for the second quarter were
$0.62, compared to $0.67 earned in the prior quarter. BB&T's
results of operations for the second quarter produced an annualized
return on average assets of 1.06%, an annualized return on average
risk-weighted assets of 1.32% and an annualized return on average
common shareholders' equity of 8.20%, compared to prior quarter
ratios of 1.18%, 1.48% and 9.05%, respectively. BB&T's return
on average tangible common shareholders' equity was 12.76% for the
second quarter of 2015, compared to 14.00% for the prior
quarter.
During May 2015, the U.S. Court of
Appeals for the Federal Circuit rendered its decision on BB&T's
appeal of a prior ruling that disallowed foreign tax credits and
other deductions claimed by a subsidiary in connection with a
financing transaction. As a result of this decision, a portion of
the earlier ruling was overturned and BB&T recognized net tax
benefits of $107 million during the
second quarter of 2015. Other aspects of the earlier ruling, which
were adverse to BB&T, were affirmed by the Court of
Appeals.
Results for the second quarter of 2015 included a loss on early
extinguishment of higher cost FHLB advances of $172 million, or $107
million after-tax. The terminated advances totaled
approximately $931 million and had a
weighted average interest rate of 4.84% and a weighted average
remaining life of approximately 6.6 years.
Effective May 31, 2015, BB&T
completed the sale of American Coastal, which resulted in a pre-tax
loss on sale of $26 million primarily
due to the allocation of $49 million
of goodwill. As a result of the goodwill being non-deductible for
income tax purposes, the sale generated income tax expense of
$8 million, resulting in a net
after-tax loss of $34 million, or
$0.05 per share.
Total revenues were $2.4 billion
for the second quarter of 2015, an increase of $23 million compared to the prior quarter, which
reflects an increase in noninterest income of $22 million and an increase in taxable-equivalent
net interest income of $1
million.
The change in taxable-equivalent net interest income includes a
$3 million decrease in interest
income, driven by lower yields on new loans, and a $4 million decrease in interest expense. The net
interest margin was 3.27% for the second quarter, a decrease of six
basis points compared to the prior quarter. Average earning assets
increased $2.1 billion, or 5.1%
annualized, while average interest-bearing liabilities were down
slightly to $116.1 billion. The
annualized yield on the total loan portfolio for the second quarter
was 4.18%, a five basis point decrease compared to the prior
quarter, which primarily reflects lower yields on new loans and the
continued runoff of higher yielding loans acquired from the FDIC.
The annualized fully taxable-equivalent yield on the average
securities portfolio for the second quarter was 2.41%, down six
basis points compared to the prior quarter.
The average annualized cost of interest-bearing deposits was
0.24%, down one basis point compared to the prior quarter. The
average annualized rate paid on long-term debt was 2.14%, a
decrease of four basis points compared to the prior quarter, which
primarily reflects the impact of the previously described
extinguishment of FHLB advances.
The $22 million increase in
noninterest income was primarily driven by higher mortgage banking
income, FDIC loss share income and investment banking and brokerage
fees and commissions, which increased $20
million, $15 million and
$14 million, respectively. These
increases were partially offset by a $25
million decline in other income primarily due to the
$26 million pre-tax loss on the sale
of American Coastal and $18 million
in lower insurance income.
Excluding loans acquired from the FDIC, the provision for credit
losses was $97 million and net
charge-offs were $98 million for the
second quarter, compared to $105
million and $100 million,
respectively, for the prior quarter.
Noninterest expense was $1.7
billion for the second quarter, up $231 million compared to the prior quarter. This
increase was driven by the previously discussed $172 million loss on early extinguishment of debt
and a $34 million increase in
personnel expense. The increase in personnel expense was
primarily due to increased production-related incentives due to
volume, annual raises, seasonal increases in fringe benefits and
approximately 500 additional full-time equivalent employees, which
largely resulted from the acquisitions.
The provision for income taxes was $80
million for the second quarter, compared to $241 million for the prior quarter. This produced
an effective tax rate for the second quarter of 13.8%, compared to
30.6% for the prior quarter. The decrease is primarily attributable
to the previously discussed $107
million tax benefit.
Second Quarter 2015 compared to Second Quarter 2014
Consolidated net income available to common shareholders for the
second quarter of 2015 was $454
million, an increase of $30
million compared to the same quarter of 2014. On a diluted
per common share basis, earnings for the second quarter of 2015
were $0.62, compared to $0.58 for the earlier quarter. BB&T's results
of operations for the second quarter of 2015 produced an annualized
return on average assets of 1.06%, an annualized return on average
risk-weighted assets of 1.32% and an annualized return on average
common shareholders' equity of 8.20%, compared to earlier quarter
ratios of 1.04%, 1.38% and 8.04%, respectively. BB&T's return
on average tangible common shareholders' equity was 12.76% for the
second quarter of 2015, compared to 12.77% for the earlier
quarter.
While the second quarter of 2015 included the tax benefit, loss
on extinguishment of debt and loss on sale of American Coastal
that, in the aggregate, totaled $34
million after-tax, or $0.05
per diluted share, the earlier quarter's results were negatively
impacted by after-tax adjustments totaling $88 million, or $0.12 per diluted share, that were recorded in
connection with the identification of potential exposures related
to residential mortgage loans originated by BB&T and insured by
the Federal Housing Administration ("FHA") and an adjustment to a
previously recorded income tax reserve.
Total revenues were $2.4 billion
for the second quarter of 2015, up $31
million compared to the earlier quarter as a $61 million increase in noninterest income was
partially offset by a $30 million
decrease in taxable-equivalent net interest income.
The change in taxable-equivalent net interest income includes a
$47 million decrease in interest
income, driven by lower yields on new loans and the continued
run-off of loans acquired from the FDIC, and a $17 million decrease in interest expense. Net
interest margin was 3.27%, compared to 3.43% for the earlier
quarter. Average earning assets increased $4.3 billion, or 2.7%, while average
interest-bearing liabilities decreased $2.1
billion, or 1.8%. The annualized yield on the total loan
portfolio for the second quarter was 4.18%, a decrease of 27 basis
points compared to the earlier quarter, which primarily reflects
lower yields on new loans and continued runoff of higher yielding
loans acquired from the FDIC. The annualized fully
taxable-equivalent yield on the average securities portfolio for
the second quarter was 2.41%, two basis points lower than the
earlier period.
The average annualized cost of interest-bearing deposits was
0.24%, a decline of two basis points compared to the earlier
quarter. The average annualized rate paid on long-term debt was
2.14%, a decrease of 24 basis points compared to the earlier
quarter. This decrease was the result of lower rates on new issues
during the last twelve months and early extinguishments of higher
cost FHLB advances.
The $61 million increase in
noninterest income was primarily driven by higher mortgage banking
income, FDIC loss share income and investment banking and brokerage
fees and commissions, which increased $44
million, $24 million and
$16 million, respectively. These
increases were partially offset by a $34
million decline in other income primarily due to the
$26 million pre-tax loss on the sale
of American Coastal.
Excluding loans acquired from the FDIC, the provision for credit
losses was $97 million, compared to
$83 million in the earlier quarter,
primarily due to a reserve release in the earlier quarter. Net
charge-offs for the second quarter of 2015, excluding loans
acquired from the FDIC, totaled $98
million, down $19 million
compared to the earlier quarter.
Noninterest expense was $1.7
billion for the second quarter of 2015, an increase of
$119 million compared to the earlier
quarter. This increase was driven by the $172 million loss on early extinguishment of debt
and a $55 million increase in
personnel expense, partially offset by a $77
million decrease in other expense and a $43 million decrease in loan-related expense that
was primarily due to a charge related to FHA-insured mortgage loans
in the earlier quarter.
The provision for income taxes was $80
million for the second quarter of 2015, compared to
$216 million for the earlier quarter.
This produced an effective tax rate for the second quarter of 2015
of 13.8%, compared to 31.2% for the earlier quarter. The current
quarter included the tax benefit of $107
million discussed above and the earlier quarter included a
$14 million tax provision related to
the IRS's change in stance related to an income tax position that
was under examination.
NONINTEREST
INCOME
|
|
|
|
|
|
|
|
|
|
% Change
|
|
% Change
|
(dollars in
millions)
|
Q2
|
|
Q1
|
|
Q2
|
|
Q2 15 vs.
|
|
Q2 15 vs.
|
|
|
|
2015
|
|
2015
|
|
2014
|
|
Q1 15
|
|
Q2 14
|
|
|
|
|
|
|
|
|
|
|
|
|
(annualized)
|
|
|
|
Insurance
income
|
$
|
422
|
|
$
|
440
|
|
$
|
422
|
|
|
(16.4)
|
|
|
―
|
Service charges on
deposits
|
|
154
|
|
|
145
|
|
|
158
|
|
|
24.9
|
|
|
(2.5)
|
Mortgage banking
income
|
|
130
|
|
|
110
|
|
|
86
|
|
|
72.9
|
|
|
51.2
|
Investment banking
and brokerage fees and commissions
|
|
108
|
|
|
94
|
|
|
92
|
|
|
59.7
|
|
|
17.4
|
Bankcard fees and
merchant discounts
|
|
55
|
|
|
50
|
|
|
54
|
|
|
40.1
|
|
|
1.9
|
Trust and investment
advisory revenues
|
|
57
|
|
|
56
|
|
|
55
|
|
|
7.2
|
|
|
3.6
|
Checkcard
fees
|
|
43
|
|
|
39
|
|
|
42
|
|
|
41.1
|
|
|
2.4
|
Operating lease
income
|
|
30
|
|
|
29
|
|
|
20
|
|
|
13.8
|
|
|
50.0
|
Income from
bank-owned life insurance
|
|
27
|
|
|
30
|
|
|
25
|
|
|
(40.1)
|
|
|
8.0
|
FDIC loss share
income, net
|
|
(64)
|
|
|
(79)
|
|
|
(88)
|
|
|
(76.2)
|
|
|
(27.3)
|
Securities gains
(losses), net
|
|
(1)
|
|
|
―
|
|
|
―
|
|
|
NM
|
|
|
NM
|
Other income
(1)
|
|
58
|
|
|
83
|
|
|
92
|
|
|
(120.8)
|
|
|
(37.0)
|
|
Total noninterest
income
|
$
|
1,019
|
|
$
|
997
|
|
$
|
958
|
|
|
8.9
|
|
|
6.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
The Q2 2014 amount
was revised as a result of the January 1, 2015 adoption of new
guidance related to the accounting for investments in qualified
affordable housing projects.
|
NM - not
meaningful.
|
Second Quarter 2015 compared to First Quarter 2015
Noninterest income was $1.0
billion for the second quarter, up $22 million compared to the prior quarter. This
increase was driven by higher mortgage banking income, FDIC loss
share income and investment banking and brokerage fees and
commissions, partially offset by lower other income and insurance
income. Mortgage banking income was $20
million higher than the prior quarter, primarily reflecting
higher net mortgage servicing rights income and higher commercial
mortgage fee income due to increased volumes. FDIC loss share
income was $15 million better
primarily due to the loss share offsets on securities duration
adjustments and lower negative accretion related to loans.
Investment banking and brokerage fees and commissions were up
$14 million, driven by increased
capital markets activity. Other income was down $25 million primarily due to the sale of American
Coastal, which generated a pre-tax loss of $26 million, and a $12
million reduction in income from private equity investments,
which was partially offset by improvement in several other
categories of other income. Insurance income declined $18 million with approximately $11 million of the reduction due to the sale of
American Coastal.
Second Quarter 2015 compared to Second Quarter 2014
Noninterest income for the second quarter of 2015 increased
$61 million, or 6.4%, compared to the
earlier quarter. This increase was primarily driven by $44 million of higher mortgage banking income,
which reflects higher net mortgage servicing rights income, higher
gains on sales of loans and improvement in commercial mortgage fee
income due to higher loan volume. In addition, FDIC loss share
income was better $24 million
primarily due to lower negative accretion related to loans, and
investment banking and brokerage fees and commissions was
$16 million higher primarily due to
increased capital markets activity and investment commissions.
Operating lease income increased $10
million primarily due to higher volumes. These increases
were partially offset by a $34
million decrease in other income, which was primarily driven
by the loss on sale of American Coastal.
NONINTEREST
EXPENSE
|
|
|
|
|
|
|
|
|
|
% Change
|
|
% Change
|
(dollars in
millions)
|
Q2
|
|
Q1
|
|
Q2
|
|
Q2 15 vs.
|
|
Q2 15 vs.
|
|
|
2015
|
|
2015
|
|
2014
|
|
Q1 15
|
|
Q2 14
|
|
|
|
|
|
|
|
|
|
|
|
(annualized)
|
|
|
|
Personnel
expense
|
$
|
864
|
|
$
|
830
|
|
$
|
809
|
|
|
16.4
|
|
|
6.8
|
Occupancy and
equipment expense
|
|
166
|
|
|
167
|
|
|
168
|
|
|
(2.4)
|
|
|
(1.2)
|
Loan-related
expense
|
|
37
|
|
|
38
|
|
|
80
|
|
|
(10.6)
|
|
|
(53.8)
|
Software
expense
|
|
46
|
|
|
44
|
|
|
42
|
|
|
18.2
|
|
|
9.5
|
Professional
services
|
|
35
|
|
|
24
|
|
|
34
|
|
|
183.8
|
|
|
2.9
|
Outside IT
services
|
|
29
|
|
|
30
|
|
|
31
|
|
|
(13.4)
|
|
|
(6.5)
|
Regulatory
charges
|
|
25
|
|
|
23
|
|
|
30
|
|
|
34.9
|
|
|
(16.7)
|
Amortization of
intangibles
|
|
23
|
|
|
21
|
|
|
23
|
|
|
38.2
|
|
|
―
|
Foreclosed property
expense
|
|
14
|
|
|
13
|
|
|
10
|
|
|
30.9
|
|
|
40.0
|
Merger-related and
restructuring charges, net
|
|
25
|
|
|
13
|
|
|
13
|
|
|
NM
|
|
|
92.3
|
Loss on early
extinguishment of debt
|
|
172
|
|
|
―
|
|
|
―
|
|
|
NM
|
|
|
NM
|
Other
expense
|
|
217
|
|
|
219
|
|
|
294
|
|
|
(3.7)
|
|
|
(26.2)
|
|
Total noninterest
expense
|
$
|
1,653
|
|
$
|
1,422
|
|
$
|
1,534
|
|
|
65.2
|
|
|
7.8
|
Second Quarter 2015 compared to First Quarter 2015
Noninterest expense was $1.7
billion for the second quarter, up $231 million compared to the prior quarter. As
previously discussed, the current quarter included a loss on early
extinguishment of debt totaling $172
million.
Personnel expense was up $34
million, reflecting $22
million in higher incentives that were largely the result of
increased production. In addition, salary expense increased
$18 million, primarily due to annual
raises effective on April 1 and
approximately 500 more full-time equivalent employees, which was
largely the result of acquisitions. Equity-based compensation was
up $12 million due to accelerated
expense recognition as a result of retirement eligibility
provisions. These increases were partially offset by a $13 million improvement in payroll taxes as a
result of a seasonally high first quarter due to annual limit
resets.
Merger-related and restructuring charges were $12 million higher than the prior quarter
primarily due to activity related to The Bank of Kentucky and Susquehanna Bancshares as well as
the AmRisc/American Coastal transactions. Professional services
increased $11 million due to higher
legal fees and other project related professional services.
Second Quarter 2015 compared to Second Quarter 2014
Noninterest expense for the second quarter of 2015 was
$119 million higher than the same
period of 2014. The increase was primarily driven by the loss on
early extinguishment of debt, higher personnel expense and higher
merger-related and restructuring charges. The increase in personnel
expense of $55 million reflects a
$19 million increase in qualified
pension plan expense that was driven by higher amortization of net
actuarial losses and higher service cost. Personnel expense was
also higher due to a $14 million
increase in production-related incentives due to strong performance
at fee income-generating businesses and a $12 million increase in employee health costs.
The annual raises effective April 1
were largely offset by approximately 1,000 fewer full-time
equivalent employees. Other expense and loan-related expense
decreased $77 million and
$43 million, respectively, primarily
due to charges recognized in the earlier period related to
FHA-insured loan originations.
LOANS AND
LEASES - average balances
|
|
|
|
|
|
|
|
|
|
% Change
|
|
% Change
|
(dollars in
millions)
|
Q2
|
|
Q1
|
|
Q2
|
|
Q2 15 vs.
|
|
Q2 15 vs.
|
|
2015
|
|
2015
|
|
2014
|
|
Q1 15
|
|
Q2 14
|
|
|
|
|
|
|
|
|
|
|
(annualized)
|
|
|
Commercial and
industrial
|
$
|
42,541
|
|
$
|
41,448
|
|
$
|
39,397
|
|
10.6
|
|
8.0
|
CRE - income
producing properties
|
|
10,730
|
|
|
10,680
|
|
|
10,382
|
|
1.9
|
|
3.4
|
CRE - construction
and development
|
|
2,767
|
|
|
2,734
|
|
|
2,566
|
|
4.8
|
|
7.8
|
Direct retail
lending
|
|
8,449
|
|
|
8,191
|
|
|
7,666
|
|
12.6
|
|
10.2
|
Sales
finance
|
|
10,517
|
|
|
10,498
|
|
|
10,028
|
|
0.7
|
|
4.9
|
Revolving
credit
|
|
2,365
|
|
|
2,385
|
|
|
2,362
|
|
(3.4)
|
|
0.1
|
Residential
mortgage
|
|
29,862
|
|
|
30,427
|
|
|
32,421
|
|
(7.4)
|
|
(7.9)
|
Other lending
subsidiaries
|
|
11,701
|
|
|
11,318
|
|
|
10,553
|
|
13.6
|
|
10.9
|
Acquired from
FDIC
|
|
1,055
|
|
|
1,156
|
|
|
1,739
|
|
(35.0)
|
|
(39.3)
|
|
Total loans and
leases held for investment
|
$
|
119,987
|
|
$
|
118,837
|
|
$
|
117,114
|
|
3.9
|
|
2.5
|
Average loans held for investment for the second quarter of 2015
were $120.0 billion, up $1.2 billion compared to the first quarter of
2015. The increase in average loans held for investment was
primarily due to an increase of $1.1
billion in commercial and industrial average loans, a
$383 million increase in average
other lending subsidiaries loans and a $258
million increase in average direct retail lending loans.
These increases were partially offset by a $565 million decline in average residential
mortgage loans and continued run-off of loans acquired from the
FDIC. The acquisition of The Bank of Kentucky, which added $1.2 billion of loans, contributed approximately
$146 million in average loans for the
quarter.
Average commercial and industrial loans increased an annualized
10.6%, which reflects growth from large corporate clients and
increased mortgage warehouse lending. Average other lending
subsidiaries loans were up an annualized 13.6% primarily due to
seasonal activity. Average direct retail lending loans were up an
annualized 12.6% primarily due to an increase in home equity line
balances.
The decrease of $565 million, or
7.4% annualized, in the residential mortgage portfolio reflects the
continued strategy to sell all conforming residential mortgage loan
production.
DEPOSITS -
average balances
|
|
|
|
|
|
|
|
|
|
% Change
|
|
% Change
|
(dollars in
millions)
|
Q2
|
|
Q1
|
|
Q2
|
|
Q2 15 vs.
|
|
Q2 15 vs.
|
|
|
2015
|
|
2015
|
|
2014
|
|
Q1 15
|
|
Q2 14
|
|
|
|
|
|
|
|
|
|
|
(annualized)
|
|
|
|
Noninterest-bearing
deposits
|
$
|
41,502
|
|
$
|
39,701
|
|
$
|
36,634
|
|
|
18.2
|
|
|
13.3
|
Interest
checking
|
|
20,950
|
|
|
20,623
|
|
|
18,406
|
|
|
6.4
|
|
|
13.8
|
Money market and
savings
|
|
53,852
|
|
|
51,644
|
|
|
48,965
|
|
|
17.1
|
|
|
10.0
|
Time
deposits
|
|
14,800
|
|
|
17,000
|
|
|
25,010
|
|
|
(51.9)
|
|
|
(40.8)
|
Foreign office
deposits - interest-bearing
|
|
764
|
|
|
563
|
|
|
584
|
|
|
143.2
|
|
|
30.8
|
|
Total
deposits
|
$
|
131,868
|
|
$
|
129,531
|
|
$
|
129,599
|
|
|
7.2
|
|
|
1.8
|
Average deposits for the second quarter were $131.9 billion, an increase of $2.3 billion or 7.2% annualized compared to the
prior quarter. The change in average deposits reflects improved
mix, with noninterest-bearing deposits up $1.8 billion, or 18.2% annualized, while
interest-bearing balances were up $536
million, or 2.4% annualized. The first quarter acquisition
of 41 branches in Texas had an
estimated $387 million favorable
impact on average noninterest-bearing deposits and a $1.3 billion impact on average interest-bearing
deposits, while the second quarter acquisition of The Bank of
Kentucky had an estimated
$190 million favorable impact on
average deposits.
Noninterest-bearing deposits represented 31.5% of total average
deposits for the second quarter, compared to 30.6% for the prior
quarter and 28.3% a year ago.
The growth in average noninterest-bearing deposits includes an
increase in average commercial accounts totaling $1.6 billion and an increase in average consumer
accounts totaling $503 million,
partially offset by a decrease in average public funds accounts
totaling $369 million.
Excluding the Texas branch
acquisition and The Bank of Kentucky acquisition, average noninterest
bearing deposits increased $1.4
billion, average money market and savings increased
$1.4 billion and average time
deposits declined $2.4 billion.
The cost of interest-bearing deposits was 0.24% for the second
quarter, down one basis point compared to the prior quarter.
SEGMENT
RESULTS
|
|
|
|
|
|
|
|
|
|
|
Change
|
|
Change
|
(dollars in
millions)
|
|
Q2
|
|
Q1
|
|
Q2
|
|
Q2 15 vs.
|
|
Q2 15 vs.
|
Segment Net
Income
|
|
2015
|
|
2015
|
|
2014
|
|
Q1 15
|
|
Q2 14
|
Community
Banking
|
|
$
|
234
|
|
$
|
210
|
|
$
|
219
|
|
$
|
24
|
|
$
|
15
|
Residential Mortgage
Banking
|
|
|
72
|
|
|
64
|
|
|
(21)
|
|
|
8
|
|
|
93
|
Dealer Financial
Services
|
|
|
49
|
|
|
45
|
|
|
63
|
|
|
4
|
|
|
(14)
|
Specialized
Lending
|
|
|
70
|
|
|
57
|
|
|
60
|
|
|
13
|
|
|
10
|
Insurance
Services
|
|
|
53
|
|
|
72
|
|
|
57
|
|
|
(19)
|
|
|
(4)
|
Financial
Services
|
|
|
68
|
|
|
66
|
|
|
67
|
|
|
2
|
|
|
1
|
Other, Treasury and
Corporate
|
|
|
(45)
|
|
|
33
|
|
|
32
|
|
|
(78)
|
|
|
(77)
|
|
Total net
income
|
|
$
|
501
|
|
$
|
547
|
|
$
|
477
|
|
$
|
(46)
|
|
$
|
24
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Second Quarter 2015 compared to First Quarter 2015
Community Banking
Community Banking serves individual and business clients by
offering a variety of loan and deposit products and other financial
services. The segment is primarily responsible for acquiring and
maintaining client relationships.
Community Banking net income was $234
million for the second quarter of 2015, an increase of
$24 million compared to the prior
quarter. Segment net interest income increased $26 million, primarily driven by deposit growth
coupled with higher funding spreads on deposits, partially offset
by lower interest rates on new loans. Noninterest income increased
$20 million, primarily due to higher
service charges on deposits, bankcard and merchant services fees,
and checkcard fees. Noninterest expense increased $14 million driven by higher salary, equity-based
compensation and employee benefit expense. The increase in
noninterest expense was partially attributable to the acquisitions
during the current and prior quarters. Average loans grew
$309 million, or 2.5% on an
annualized basis, while average transaction account deposits grew
$1.9 billion, or 13.8% on an
annualized basis.
Residential Mortgage Banking
Residential Mortgage Banking retains and services mortgage loans
originated by BB&T as well as those purchased from various
correspondent originators. Mortgage loan products include fixed and
adjustable-rate government guaranteed and conventional loans for
the purpose of constructing, purchasing or refinancing residential
properties. Substantially all of the properties are
owner-occupied.
Residential Mortgage Banking net income was $72 million for the second quarter of 2015, an
increase of $8 million compared to
the prior quarter. Segment net interest income increased
$7 million, primarily the result of
higher average loans held for sale balances and higher credit
spreads on new loans held for investment, partially offset by lower
average loans held for investment balances. Noninterest income
increased $17 million driven by an
increase in net mortgage servicing rights income. The allocated
provision for credit losses was $3
million in the second quarter of 2015, compared to a benefit
of $12 million in the prior quarter,
primarily due to stabilization in the improvement in loss severity
trends.
Dealer Financial Services
Dealer Financial Services primarily originates loans to
consumers for the purchase of automobiles. These loans are
originated on an indirect basis through approved franchised and
independent automobile dealers throughout BB&T's market area
through BB&T Dealer Finance, and on a national basis through
Regional Acceptance Corporation. Dealer Financial Services also
originates loans for the purchase of recreational and marine
vehicles and, in conjunction with the Community Bank, provides
financing and servicing to dealers for their inventories.
Dealer Financial Services net income was $49 million for the second quarter of 2015, an
increase of $4 million compared to
the prior quarter. Segment net interest income increased
$3 million, primarily driven by
growth in the Regional Acceptance loan portfolio. The allocated
provision for credit losses decreased $13
million, primarily due to seasonally lower net charge-offs
in the Regional Acceptance loan portfolio. Dealer Financial
Services' average loans increased by $62
million, or 1.8%, on an annualized basis.
Specialized Lending
Specialized Lending consists of businesses that provide
specialty finance alternatives to commercial and consumer clients
including: commercial finance, mortgage warehouse lending,
tax-exempt financing for local governments and special-purpose
districts, equipment leasing, full-service commercial mortgage
banking, commercial and retail insurance premium finance, and
dealer-based financing of equipment for consumers and small
businesses.
Specialized Lending net income was $70
million for the second quarter of 2015, an increase of
$13 million compared to the prior
quarter. Segment net interest income increased $6 million driven by strong growth in mortgage
warehouse loans, small ticket consumer loans and commercial
mortgage loans, partially offset by lower interest rates on new
loans. Noninterest income increased $10
million driven by higher commercial mortgage income, higher
gains on finance leases and higher operating lease income. The
allocated provision for credit losses decreased $12 million primarily due to higher prior period
charge-offs and revisions to loss estimates in the commercial
finance loan portfolio. Specialized Lending grew average loans by
$1.1 billion, or 26.0% on an
annualized basis.
Insurance Services
BB&T's insurance agency / brokerage network is the fifth
largest in the United States and
sixth largest in the world. Insurance Services provides property
and casualty, life and health insurance to business and individual
clients. It also provides small business and corporate products,
such as workers compensation and professional liability, as well as
surety coverage and title insurance.
During the second quarter of 2015, BB&T completed its sale
of American Coastal Insurance Company and increased its partnership
interest in AmRisc, LP, a managing general underwriter for
commercial property risks. The sale of American Coastal Insurance
Company eliminates BB&T's exposure to potential underwriting
losses in the future.
Insurance Services net income was $53
million in the second quarter of 2015, a decrease of
$19 million compared to the prior
quarter. Insurance Service's noninterest income decreased
$17 million, which primarily reflects
a seasonal decrease in employee benefits insurance commissions and
lower direct commercial property and casualty insurance premiums
due to the sale of American Coastal, partially offset by a seasonal
increase in commercial property and casualty insurance business and
higher performance-based insurance commissions. Noninterest expense
increased $8 million driven by higher
salary and incentive expense and merger-related charges.
Financial Services
Financial Services provides personal trust administration,
estate planning, investment counseling, wealth management, asset
management, employee benefits services, corporate banking and
corporate trust services to individuals, corporations,
institutions, foundations and government entities. In addition,
Financial Services offers clients investment alternatives,
including discount brokerage services, equities, fixed-rate and
variable-rate annuities, mutual funds and governmental and
municipal bonds through BB&T Investment Services, Inc. The
segment also includes BB&T Securities, a full-service brokerage
and investment banking firm, the Corporate Banking Division, which
originates and services large corporate relationships, syndicated
lending relationships and client derivatives, and BB&T Capital
Partners, which manages the company's SBIC private equity
investments.
Financial Services net income was $68
million in the second quarter of 2015, an increase of
$2 million compared to the prior
quarter. Segment net interest income increased $6 million driven by Corporate Banking loan and
deposit growth and higher interest rates on new loans. Noninterest
income increased $10 million
primarily due to higher capital market activity. Noninterest
expense increased $15 million
compared to the prior quarter, driven by higher incentive expense
and operating charge-offs.
Financial Services generated significant loan growth with
Corporate Banking's average loan balances increasing $465 million, or an annualized 17.2%, over the
prior quarter, while BB&T Wealth's average loan balances
increased $100 million, or 29.8% on
an annualized basis. Corporate Banking's average deposits grew
$755 million, or 37.5% on an
annualized basis.
Other, Treasury & Corporate
Net income in Other, Treasury & Corporate can vary due to
the changing needs of the Corporation, including the size of the
investment portfolio, the need for wholesale funding and income
received from derivatives used to hedge the balance sheet.
In the second quarter of 2015, Other, Treasury & Corporate
generated a net loss of $45 million,
compared to net income of $33 million
in the prior quarter. Segment net interest income decreased
$46 million driven by the continued
run-off of loans acquired from the FDIC, duration adjustments on
securities acquired from the FDIC, lower deposit funding spreads
and lower credit spreads on other earning assets. Noninterest
income decreased $18 million,
primarily due to the loss on the previously discussed sale of
American Coastal. The allocated provision for credit losses
increased $11 million primarily due
to a reserve release in the loan portfolio acquired from the FDIC
in the prior quarter. Noninterest expense increased $179 million driven by the previously discussed
$172 million loss on early
extinguishment of FLHB advances in the current quarter.
Second Quarter 2015 compared to Second Quarter 2014
Community Banking
Community Banking net income was $234
million for the second quarter of 2015, an increase of
$15 million compared to the earlier
quarter. Segment net interest income increased $8 million, primarily driven by deposit growth
and commercial real estate and direct retail loan growth, partially
offset by lower funding spreads on deposits and lower interest
rates on new commercial loans. Noninterest income decreased
$10 million, primarily due to lower
service charges on deposits, letter of credit fees and commercial
loan fees. Intersegment referral fee income increased $10 million driven by higher loan referrals to
the Residential Mortgage Banking segment. The allocated provision
for credit losses decreased $24
million as the result of lower commercial and direct retail
net charge-offs.
Residential Mortgage Banking
Residential Mortgage Banking net income was $72 million for the second quarter of 2015,
compared to a net loss of $21 million
in the earlier quarter. Segment net interest income decreased
$9 million, primarily the result of
lower average loan balances due to the current strategy of selling
substantially all conforming mortgage loan production and lower
interest rates on new loans. Noninterest income increased
$33 million driven by an increase in
net mortgage servicing rights income and an increase in gains on
mortgage loan production and sales driven by higher mortgage loan
originations and margins. The improvement in gain on sale margins
was the result of improved pricing and a higher mix of retail
saleable production. Noninterest expense decreased $130 million compared to the prior quarter, which
primarily reflects the impact of prior year adjustments totaling
$118 million relating to FHA-insured
loan exposures.
Dealer Financial Services
Dealer Financial Services net income was $49 million for the second quarter of 2015, a
decrease of $14 million compared to
the earlier quarter. Segment net interest income increased
$10 million, primarily driven by
growth in the Regional Acceptance loan portfolio and the inclusion
of dealer floor plan loans in the segment in the current quarter,
partially offset by lower interest rates on new loans. The
allocated provision for credit losses increased $17 million, primarily due to higher net
charge-offs and higher expectations of loss severity related to the
nonprime automobile loan portfolio. Noninterest expense increased
$13 million driven by higher
personnel, professional services and other expenses. Adjusted for
the inclusion of dealer floor plan loans, Dealer Financial Services
grew average loans by $850 million,
or 6.6% compared to the earlier quarter.
Specialized Lending
Specialized Lending net income was $70
million for the second quarter of 2015, an increase of
$10 million compared to the earlier
quarter. Segment net interest income increased $2 million driven by strong growth in mortgage
warehouse loans, small ticket consumer loans and commercial
mortgage loans, partially offset by lower interest rates on new
loans. Noninterest income increased $23
million driven by higher commercial mortgage and operating
lease income. The allocated provision for credit losses decreased
$6 million primarily due to an
improvement in credit trends in the commercial finance loan
portfolio. Noninterest expense increased $15
million, primarily due to higher personnel expense,
depreciation of property under operating leases and loan processing
expense. Specialized Lending grew average loans $1.8 billion or 11.5% compared to the earlier
quarter, led by Mortgage Warehouse Lending with $725 million or 64.4% loan growth and Grandbridge
with $284 million or 64.8% loan
growth.
Insurance Services
Insurance Services net income was $53
million in the second quarter of 2015, a decrease of
$4 million compared to the earlier
quarter. Insurance Service's noninterest income increased
$1 million, which primarily reflects
higher new and renewal commercial property and casualty insurance
business and higher performance-based commissions, partially offset
by lower direct commercial property and casualty insurance premiums
due to the previously discussed sale of American Coastal.
Noninterest expense increased $2
million driven by higher employee insurance and pension
expense and merger-related charges, partially offset by lower
incentives and operating charge-offs and a reduction in certain
actuarially determined loss reserves.
Financial Services
Financial Services net income was $68
million in the second quarter of 2015, an increase of
$1 million compared to the earlier
quarter. Segment net interest income increased $18 million driven by Corporate Banking and
BB&T Wealth loan and deposit growth, partially offset by lower
interest rates on new loans and lower funding spreads on deposits.
Noninterest income increased $20
million due to higher capital market fees, investment
commissions and brokerage fees and commercial loan fees. The
allocated provision for credit losses increased $20 million as the result of portfolio mix and
risk expectations related to the oil and energy sector. Noninterest
expense increased $15 million
compared to the earlier quarter, primarily driven by higher
incentive and employee benefit expense.
Other, Treasury & Corporate
In the second quarter of 2015, Other, Treasury & Corporate
generated a net loss of $45 million,
compared to net income of $32 million
in the earlier quarter. Segment net interest income decreased
$58 million driven by lower acquired
from FDIC loan balances and credit spreads, duration adjustments on
securities acquired from the FDIC, and lower funding spreads on
interest-bearing deposits. Noninterest income decreased
$6 million, primarily due to the loss
on the previously mentioned sale of American Coastal, partially
offset by better FDIC loss share income. The allocated provision
for credit losses was $5 million in
the second quarter of 2015, compared to a benefit of $7 million in the earlier quarter, which
primarily reflects changes in provision expense related to loans
acquired from the FDIC and a provision benefit in the commercial
finance loan portfolio shared by other segments. Noninterest
expense increased $203 million,
primarily due to the previously mentioned $172 million loss on early extinguishment of FLHB
advances in the current quarter and higher personnel expense and
merger-related charges. Intersegment referral fee expenses
decreased $12 million driven by
higher loan referrals to the Residential Mortgage Banking segment
shared by other segments. Allocated corporate expense decreased by
$19 million compared to the earlier
quarter.
CAPITAL RATIOS
(1)
|
|
|
|
|
|
|
|
|
|
|
Basel III
|
|
Basel I
|
|
Q2
|
|
Q1
|
|
Q4
|
|
Q3
|
|
Q2
|
|
2015
|
|
2015
|
|
2014
|
|
2014
|
|
2014
|
Risk-based:
|
|
|
|
|
|
|
|
|
|
|
Common equity Tier 1
(%)
|
10.4
|
|
10.5
|
|
N/A
|
|
N/A
|
|
N/A
|
|
Tier 1 (%)
|
12.1
|
|
12.2
|
|
12.4
|
|
12.4
|
|
12.1
|
|
Total (%)
|
14.3
|
|
14.4
|
|
14.9
|
|
15.1
|
|
14.4
|
Leverage
(%)
|
10.2
|
|
10.1
|
|
9.9
|
|
9.7
|
|
9.5
|
Tangible common
equity to tangible assets (%) (2)
|
8.1
|
|
8.0
|
|
8.0
|
|
7.9
|
|
7.7
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Regulatory capital
ratios are preliminary.
|
(2)
|
Tangible common
equity and related ratios are non-GAAP measures. See the
calculations and management's reasons for using these measures in
the Capital Information – Five Quarter Trend of the Quarterly
Performance Summary.
|
Capital levels remained strong at June
30, 2015. BB&T declared total common dividends of
$0.27 during the second quarter of
2015, which resulted in a dividend payout ratio of 42.9%.
Risk-based capital ratios were down slightly from the prior quarter
as The Bank of Kentucky and
AmRisc/American Coastal transactions used approximately 0.2% of
capital levels, partially offset by growth from earnings in excess
of dividends.
BB&T's estimated common equity Tier 1 ratio under Basel III,
on a fully-phased in basis, was approximately 10.2% at June 30, 2015 and 10.3% at March 31, 2015.
BB&T's liquidity coverage ratio was approximately 118% at
June 30, 2015, compared to the
regulatory minimum of 90%. In addition, the liquid asset buffer,
which is defined as high quality unencumbered liquid assets as a
percentage of total assets, was 13.3% at June 30, 2015.
ASSET QUALITY
(1)
|
|
|
|
|
|
|
|
|
|
Change
|
|
Change
|
(dollars in
millions)
|
Q2
|
|
Q1
|
|
Q2
|
|
Q2 15 vs.
|
|
Q2 15 vs.
|
|
|
2015
|
|
2015
|
|
2014
|
|
Q1 15
|
|
Q2 14
|
Total nonperforming
assets
|
$
|
729
|
|
$
|
765
|
|
$
|
972
|
|
$
|
(36)
|
|
$
|
(243)
|
Total performing
TDRs
|
|
1,027
|
|
|
996
|
|
|
1,686
|
|
|
31
|
|
|
(659)
|
Total loans 90 days
past due and still accruing
|
|
361
|
|
|
392
|
|
|
605
|
|
|
(31)
|
|
|
(244)
|
Total loans 30-89
days past due
|
|
833
|
|
|
759
|
|
|
1,021
|
|
|
74
|
|
|
(188)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonperforming loans
and leases as a percentage of loans and leases held for investment (%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.47
|
|
|
0.50
|
|
|
0.70
|
|
|
(0.03)
|
|
|
(0.23)
|
Nonperforming assets
as a percentage of total assets (%)
|
|
0.38
|
|
|
0.40
|
|
|
0.52
|
|
|
(0.02)
|
|
|
(0.14)
|
Allowance for loan
and lease losses as a percentage of loans and leases held for investment (%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1.19
|
|
|
1.22
|
|
|
1.33
|
|
|
(0.03)
|
|
|
(0.14)
|
Net charge-offs as a
percentage of average loans and leases (%) annualized
|
|
0.33
|
|
|
0.34
|
|
|
0.41
|
|
|
(0.01)
|
|
|
(0.08)
|
Ratio of allowance
for loan and lease losses to net charge-offs (times) annualized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3.71
|
|
|
3.60
|
|
|
3.28
|
|
|
0.11
|
|
|
0.43
|
Ratio of allowance
for loan and lease losses to nonperforming loans and leases held for
investment (times)
|
|
2.55
|
|
|
2.45
|
|
|
1.89
|
|
|
0.10
|
|
|
0.66
|
|
|
(1)
|
Excludes amounts
related to government guaranteed GNMA mortgage loans that BB&T
has the right but not the obligation to repurchase. See footnotes
on the Credit Quality pages of the Quarterly Performance Summary
for additional information.
|
Nonperforming assets decreased $36
million, or 4.7%, during the quarter ended June 30, 2015. At June 30,
2015, nonperforming loans and leases represented 0.47% of
loans and leases held for investment, compared to 0.50% at
March 31, 2015.
Loans 30-89 days past due and still accruing, excluding
government guaranteed GNMA mortgage loans that BB&T has the
right but not the obligation to repurchase, totaled $833 million at June 30,
2015, an increase of $74
million compared to the prior quarter. This reflects an
increase of $79 million for other
lending subsidiaries, which primarily reflects seasonal trends.
Loans 90 days or more past due and still accruing totaled
$361 million at June 30, 2015, a decrease of $31 million compared to the prior quarter. This
decline is primarily attributable to a $30
million decrease in delinquent loans acquired from the FDIC
as those balances continue to run-off. Excluding loans acquired
from the FDIC, the ratio of loans 90 days or more past due and
still accruing as a percentage of loans and leases was 0.19% at
June 30, 2015, a decline of one basis
point compared to the prior quarter.
Net charge-offs during the second quarter totaled $98 million, a decline of $3 million compared to the prior quarter. As a
percentage of average loans and leases, annualized net charge-offs
were 0.33%, compared to 0.34% in the prior quarter.
The allowance for loan and lease losses, excluding the allowance
for loans acquired from the FDIC, was $1.4
billion, essentially flat compared to the prior quarter. The
allowance for loans acquired from the FDIC was $57 million, flat compared to the prior quarter.
As of June 30, 2015, the total
allowance for loan and lease losses was 1.19% of loans and leases
held for investment, compared to 1.22% at March 31, 2015. The allowance for loan and lease
losses was 2.55 times nonperforming loans and leases held for
investment, compared to 2.45 times at March
31, 2015. At June 30, 2015,
the allowance for loan and lease losses was 3.71 times annualized
net charge-offs, compared to 3.60 times at March 31, 2015.
Earnings presentation and Quarterly Performance
Summary
To listen to BB&T's live second 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 second 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 June 30, 2015, BB&T is
one of the largest financial services holding companies in the U.S.
with $191 billion in assets and
market capitalization of $29.6
billion. Based in Winston-Salem,
N.C., the company operates 1,903 financial centers in 13
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 Second
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.
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/bbt-reports-second-quarter-results-adjusted-diluted-eps-totals-069-per-share-300114101.html
SOURCE BB&T Corporation