BB&T Misses Wall Street Expectations
January 21 2016 - 7:24AM
Dow Jones News
By Lisa Beilfuss
BB&T Corp. said profit in its latest quarter declined as the
lender took in less fee income, set aside more money to cover
potential loan losses and booked higher merger-related
expenses.
Revenue increased thanks in part to recent acquisitions, but
results fell shy of Wall Street expectations.
The Winston-Salem, N.C.-based lender reported earnings of $542
million, down from $603 million a year earlier. Per-share profit
fell to 64 cents from 75 cents; excluding certain items, earnings
per share were 68 cents. Revenue grew 6.9% to $2.56 billion.
Analysts projected adjusted profit of 69 cents a share on $2.57
billion in revenue, according to Thomson Reuters.
The regional bank said its results were buoyed by its
acquisition of Susquehanna Bancshares, which BB&T closed in
August, the latest in a string of recent deals for the lender. That
deal boosted net interest income, which rose to $1.54 billion from
$1.37 billion a year earlier, though a key rate of lending
profitability edged down modestly from a year earlier. That gauge,
which is closely tied to interest rates, came in at 3.35%, flat
from the third quarter.
BB&T's latest acquisition, a $1.8 billion purchase of
Pennsylvania-based National Penn Bancshares Inc., is expected to
close April 1, the company said.
While interest income improved during the quarter, revenue from
fees dipped 0.7% to $1.02 billion as the bank saw declines in its
insurance, mortgage banking and investment banking businesses.
Expenses, meanwhile, ticked up because of a jump in merger-related
expenses, driving the bank's efficiency ratio up to 58.8% from
55.6%. The ratio, where lower is better, measures costs as a
percentage of revenue.
A higher provision for potential loan losses also bit into the
bottom line. BB&T set aside $128 million for credit losses, up
from $84 million a year earlier. Some lenders have been increasing
loan loss reserves as the sharp decline in energy prices threatens
some loans.
Shares in the company, down 13% since the start of the year,
were inactive premarket.
Write to Lisa Beilfuss at lisa.beilfuss@wsj.com
(END) Dow Jones Newswires
January 21, 2016 07:09 ET (12:09 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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