WINSTON-SALEM, N.C.,
July 21, 2016 /PRNewswire/ --
BB&T Corporation (NYSE: BBT) today reported quarterly earnings
for the second quarter of 2016. Net income available to common
shareholders was $541 million, up
19.2% from the second quarter of 2015. Earnings per diluted common
share were $0.66 for the second
quarter of 2016. Excluding merger-related and restructuring charges
of $58 million, net of tax, and a tax
benefit related to specific tax-advantaged assets of $13 million, net income available to common
shareholders was $586 million, or
$0.71 per diluted share.
Net income available to common shareholders was $527 million ($0.67
per diluted share) for the first quarter of 2016 and $454 million ($0.62
per diluted share) for the second quarter of 2015.
"We are pleased to report record revenues and total assets for
the second quarter," said Chairman and Chief Executive Officer
Kelly S. King. "Our strategic
acquisitions and strong organic growth have allowed us to expand
our footprint and achieve record results. We look forward to
further benefits from our recent transactions as we capture
efficiencies and grow in these new markets.
"Total FTE revenues were $2.8
billion, up $420 million
compared to the second quarter of 2015," said King. "While we
remain well-positioned for rising interest rates, our diversified
businesses allow us to maintain strong profitability even in a
challenging environment.
"We were also pleased to receive the Federal Reserve's
non-objection to our capital plan that includes a seven percent
dividend increase and a share repurchase program," said King. "This
will allow us to continue to provide one of the strongest dividend
payouts in the industry.
"As previously announced, we completed the acquisitions of
National Penn and Swett & Crawford on April 1st," continued King. "The National Penn
systems conversion was completed in mid-July, and both of these
acquisitions contributed to our strong second quarter results."
Second Quarter 2016 Performance
Highlights
- Taxable equivalent revenues were $2.8
billion for the second quarter, up $203 million from the first quarter of 2016
- Net interest income was up $89
million
- Net interest margin was 3.41%, down two basis points
- Adjusted fee income ratio was 42.8%, compared to 40.6% for the
prior quarter
- Noninterest expense was $1.8
billion, up $252 million
compared to the first quarter
- Personnel expense increased $124
million partially due to the acquisitions, production-based
incentives and employee benefits
- Merger-related and restructuring charges were $69 million higher due to the acquisitions and
certain restructuring activities
- Adjusted efficiency ratio was 59.3%, compared to 58.3% in the
prior quarter
- Average loans and leases held for investment were $141.1 billion compared to $134.4 billion for the first quarter of 2016
- National Penn added $5.9 billion
in average loans
- Excluding National Penn, average loans and leases increased
$860 million, or 2.6% annualized:
- Average commercial and industrial loans increased $1.1 billion, or 9.4% annualized
- Average other lending subsidiaries loans increased $522 million, or 15.6% annualized
- Average sales finance loans declined $533 million and residential mortgage loans
declined $360 million
- Average deposits were $160.3
billion compared to $149.9
billion for the prior quarter
- National Penn added $6.6 billion in average deposits
- Excluding National Penn, average deposits increased
$3.9 billion, or 10.5% annualized:
- Average noninterest-bearing deposits increased $1.4 billion, or 12.1% annualized
- Average interest checking deposits increased $1.0 billion, or 15.8% annualized
- Average interest-bearing deposit costs were 0.23%, down two
basis points
- Deposit mix remained strong, with average noninterest-bearing
deposits representing 30.4% of total deposits, compared to 30.8% in
the prior quarter
- Asset quality remained strong
- Net charge-offs as a percentage of average loans and leases
were 0.28% annualized
- Loans 90 days or more past due and still accruing were 0.43% of
loans held for investment, compared to 0.45% in the prior
quarter
- Loans 30-89 days past due and still accruing were 0.64% of
loans held for investment, compared to 0.61% in the prior
quarter
- The allowance for loan and lease losses was 1.06% of loans held
for investment, compared to 1.10% in the prior quarter
- Nonperforming assets decreased $17
million driven by reductions in foreclosed properties
- The allowance for loan loss coverage ratio was 1.90 times
nonperforming loans held for investment, versus 1.89 times in the
prior quarter
- Capital levels remained strong across the board
- Common equity tier 1 to risk-weighted assets was 10.0%, or 9.8%
on a fully phased-in basis
- Tier 1 risk-based capital was 11.7%
- Total capital was 13.9%
- Leverage capital was 9.6%
- Tangible common equity to tangible assets was 7.6%
EARNINGS
HIGHLIGHTS
|
|
(dollars in millions,
except per share data)
|
|
|
|
|
|
|
|
|
|
|
Change 2Q16
vs.
|
|
|
|
2Q16
|
|
|
1Q16
|
|
|
2Q15
|
|
|
1Q16
|
|
|
2Q15
|
|
Net income available
to common shareholders
|
|
$
|
541
|
|
|
$
|
527
|
|
|
$
|
454
|
|
|
$
|
14
|
|
|
$
|
87
|
|
Diluted earnings per
common share
|
|
0.66
|
|
|
0.67
|
|
|
0.62
|
|
|
(0.01)
|
|
|
0.04
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income -
taxable equivalent
|
|
$
|
1,657
|
|
|
$
|
1,568
|
|
|
$
|
1,348
|
|
|
$
|
89
|
|
|
$
|
309
|
|
Noninterest
income
|
|
1,130
|
|
|
1,016
|
|
|
1,019
|
|
|
114
|
|
|
111
|
|
Total
revenue
|
|
$
|
2,787
|
|
|
$
|
2,584
|
|
|
$
|
2,367
|
|
|
$
|
203
|
|
|
$
|
420
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average
assets (%)
|
|
1.06
|
|
|
1.09
|
|
|
1.06
|
|
|
(0.03)
|
|
|
—
|
|
Return on average
risk-weighted assets (%)
|
|
1.38
|
|
|
1.37
|
|
|
1.32
|
|
|
0.01
|
|
|
0.06
|
|
Return on average
common shareholders' equity (%)
|
|
8.21
|
|
|
8.45
|
|
|
8.20
|
|
|
(0.24)
|
|
|
0.01
|
|
Return on average
tangible common shareholders' equity (1) (%)
|
|
14.33
|
|
|
13.87
|
|
|
12.76
|
|
|
0.46
|
|
|
1.57
|
|
Net interest margin -
taxable equivalent (%)
|
|
3.41
|
|
|
3.43
|
|
|
3.27
|
|
|
(0.02)
|
|
|
0.14
|
|
Adjusted efficiency
ratio (1) (%)
|
|
59.3
|
|
|
58.3
|
|
|
59.2
|
|
|
1.0
|
|
|
0.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Excludes certain
items as detailed in the non-GAAP reconciliations in the Quarterly
Performance Summary.
|
Second Quarter 2016 compared to First Quarter 2016
Total revenues were $2.8 billion
for the second quarter of 2016, an increase of $203 million compared to the prior quarter, which
reflects an increase of $89 million
in taxable-equivalent net interest income, while noninterest income
was up $114 million, primarily due to
the acquisitions.
The net interest margin was 3.41% for the second quarter, down
two basis points compared to the prior quarter. Average earning
assets increased $11.2 billion, which
primarily reflects a $3.9 billion
increase in average securities and a $7.5
billion increase in average loans, driven by the acquisition
of National Penn. Average interest-bearing liabilities increased
$8.4 billion, which primarily
reflects a $7.9 billion increase in
interest-bearing deposits primarily due to the National Penn
acquisition as well as a $365 million
increase in long-term debt due to $3.0
billion of new debt issuances, partially offset by normal
maturities and paydowns.
The annualized yield on the total loan portfolio for the second
quarter was 4.31%, down four basis points compared to the prior
quarter due to sustained low interest rates. The annualized fully
taxable-equivalent yield on the average securities portfolio for
the second quarter was 2.47%, up seven basis points compared to the
prior quarter, primarily due to securities duration adjustments in
the second quarter of 2016.
The average annualized cost of interest-bearing deposits was
0.23%, down two basis points compared to the prior quarter. The
average annualized rate paid on long-term debt was 2.10%, down nine
basis points compared to the prior quarter primarily due to
favorable rates on new issuances compared to higher rates on recent
maturities.
Excluding acquired from FDIC and purchased credit impaired
("PCI") loans, the provision for credit losses was $109 million and net charge-offs were
$97 million for the second quarter,
compared to $182 million and
$154 million, respectively, for the
prior quarter. The prior quarter included $30 million of charge-offs and approximately
$28 million of provision in excess of
charge-offs related to the energy lending portfolio.
Noninterest income of $1.1 billion
was up $114 million compared to the
prior quarter as higher other income, insurance income and mortgage
banking income were partially offset by declines in securities
gains.
Noninterest expense was $1.8
billion for the second quarter, up $252 million compared to the prior quarter.
Personnel expense and merger-related and restructuring charges were
higher following the acquisitions and restructuring activities,
while other expense was up due to operating charge-offs and other
smaller increases.
The provision for income taxes was $252
million for the second quarter, compared to $246 million for the prior quarter. This includes
the previously mentioned $13 million
tax benefit related to specific tax-advantaged assets. The
effective tax rate for the second quarter was 30.0%, compared to
30.1% for the prior quarter.
Second Quarter 2016 compared to Second Quarter 2015
Total revenues were $2.8 billion
for the second quarter of 2016, an increase of $420 million compared to the earlier quarter.
This reflects an increase of $309
million in taxable-equivalent net interest income, while
noninterest income was up $111
million. These increases reflect the acquisitions during the
past year.
Net interest margin was 3.41%, up 14 basis points compared to
the earlier quarter. Average earning assets increased $29.4 billion, while average interest-bearing
liabilities increased $21.7 billion,
both of which were primarily driven by acquisition activity. The
annualized yield on the total loan portfolio for the second quarter
was 4.31%, up 13 basis points compared to the earlier quarter,
which primarily reflects the impact of acquisitions. The annualized
fully taxable-equivalent yield on the average securities portfolio
for the second quarter was 2.47%, up six basis points compared to
the earlier period. This increase is primarily due to securities
duration adjustments in the second quarter of 2016.
The average annualized cost of interest-bearing deposits was
0.23%, down one basis point compared to the earlier quarter. The
average annualized rate paid on long-term debt was 2.10%, down four
basis points compared to the earlier quarter due to favorable rates
on new issuances and the extinguishment of higher cost FHLB
advances in the earlier quarter.
Excluding acquired from FDIC and PCI loans, the provision for
credit losses was $109 million,
compared to $97 million in the
earlier quarter. Net charge-offs for the second quarter of 2016,
excluding loans acquired from the FDIC and PCI, totaled
$97 million, compared to $98 million for the earlier quarter.
Noninterest income was $1.1
billion, up $111 million from
the earlier quarter. Other income increased $49 million as the prior period included the
$26 million loss on sale of American
Coastal. Insurance income was up $43
million, primarily due to acquisitions.
Noninterest expense for the second quarter of 2016 was
$1.8 billion, up $144 million compared to the earlier quarter.
This increase reflects higher expense in a number of categories
primarily resulting from acquisition activity and current quarter
restructuring activities, partially offset by a $172 million loss on early extinguishment of debt
recorded in the earlier quarter.
The provision for income taxes was $252
million for the second quarter of 2016, compared to
$80 million for the earlier quarter.
This produced an effective tax rate for the second quarter of 2016
of 30.0%, compared to 13.8% for the earlier quarter. This reflects
a $107 million tax benefit recorded
during the second quarter of 2015 in connection with a U.S. Court
of Appeals ruling related to previously disallowed deductions in
connection with a financing transaction.
NONINTEREST
INCOME
|
|
(dollars in
millions)
|
|
|
|
|
|
|
|
|
|
|
% Change 2Q16
vs.
|
|
|
|
2Q16
|
|
|
1Q16
|
|
|
2Q15
|
|
|
1Q16
|
|
|
2Q15
|
|
|
|
|
|
|
|
|
|
|
|
|
(annualized)
|
|
|
|
|
Insurance
income
|
|
$
|
465
|
|
|
$
|
419
|
|
|
$
|
422
|
|
|
44.2
|
|
|
10.2
|
|
Service charges on
deposits
|
|
166
|
|
|
154
|
|
|
154
|
|
|
31.3
|
|
|
7.8
|
|
Mortgage banking
income
|
|
111
|
|
|
91
|
|
|
130
|
|
|
88.4
|
|
|
(14.6)
|
|
Investment banking
and brokerage fees and commissions
|
|
102
|
|
|
97
|
|
|
108
|
|
|
20.7
|
|
|
(5.6)
|
|
Trust and investment
advisory revenues
|
|
67
|
|
|
62
|
|
|
57
|
|
|
32.4
|
|
|
17.5
|
|
Bankcard fees and
merchant discounts
|
|
60
|
|
|
56
|
|
|
55
|
|
|
28.7
|
|
|
9.1
|
|
Checkcard
fees
|
|
50
|
|
|
45
|
|
|
43
|
|
|
44.7
|
|
|
16.3
|
|
Operating lease
income
|
|
35
|
|
|
34
|
|
|
30
|
|
|
11.8
|
|
|
16.7
|
|
Income from
bank-owned life insurance
|
|
31
|
|
|
31
|
|
|
27
|
|
|
—
|
|
|
14.8
|
|
FDIC loss share
income, net
|
|
(64)
|
|
|
(60)
|
|
|
(64)
|
|
|
26.8
|
|
|
—
|
|
Securities gains
(losses), net
|
|
—
|
|
|
45
|
|
|
(1)
|
|
|
NM
|
|
|
(100.0)
|
|
Other
income
|
|
107
|
|
|
42
|
|
|
58
|
|
|
NM
|
|
|
84.5
|
|
Total noninterest
income
|
|
$
|
1,130
|
|
|
$
|
1,016
|
|
|
$
|
1,019
|
|
|
45.1
|
|
|
10.9
|
|
|
|
|
|
|
|
|
|
|
|
|
NM - not
meaningful.
|
|
|
|
|
|
|
|
|
|
|
Second Quarter 2016 compared to First Quarter 2016
Noninterest income was $1.1
billion for the second quarter, up $114 million compared to the prior quarter as
higher other income, insurance income and mortgage banking income
were partially offset by declines in securities gains.
Insurance income increased $46
million driven by $57 million
in revenues attributable to the Swett & Crawford acquisition,
$34 million seasonal increase in
property and casualty commissions and a $13
million increase in life and certain other insurance
revenues. These increases were partially offset by a $36 million seasonal decline in employee benefit
commissions and a $23 million decline
at AmRisc, primarily due to lower bonus commissions.
Other income increased $65
million, primarily due to a $55
million increase in income related to assets for certain
post-employment benefits, which is offset in personnel expense.
Mortgage banking income increased $20
million primarily due to increased saleable residential loan
volume and a seasonal increase in commercial mortgage fee income.
Service charges on deposits increased $12
million and all other fee-based businesses increased a
combined $20 million primarily
resulting from higher volumes, partially due to acquisitions. The
prior quarter included $45 million of
securities gains, versus none in the current period.
Second Quarter 2016 compared to Second Quarter 2015
Noninterest income for the second quarter of 2016 was up
$111 million compared to the earlier
quarter. This increase was driven by higher other income, insurance
income, service charges on deposits and trust and investment
advisory revenues, partially offset by lower mortgage banking
income.
Insurance income increased $43
million, primarily the result of the Swett & Crawford
acquisition partially offset by the sale of American Coastal in the
earlier quarter. Service charges on deposits increased $12 million, while trust and investment advisory
revenues increased $10 million, both
of which were largely the result of acquisition-related
volumes.
Other income increased $49 million
primarily due to the $26 million loss
on sale of American Coastal recorded in the earlier period as well
as $18 million of higher income
related to assets for certain post-employment benefits (which is
offset in personnel expense) during the current period.
Mortgage banking income declined $19
million, driven by net mortgage servicing rights valuation
adjustments.
NONINTEREST
EXPENSE
|
|
(dollars in
millions)
|
|
|
|
|
|
|
|
|
|
|
% Change 2Q16
vs.
|
|
|
|
2Q16
|
|
|
1Q16
|
|
|
2Q15
|
|
|
1Q16
|
|
|
2Q15
|
|
|
|
|
|
|
|
|
|
|
|
|
(annualized)
|
|
|
|
|
Personnel
expense
|
|
$
|
1,039
|
|
|
$
|
915
|
|
|
$
|
864
|
|
|
54.5
|
|
|
20.3
|
|
Occupancy and
equipment expense
|
|
194
|
|
|
191
|
|
|
166
|
|
|
6.3
|
|
|
16.9
|
|
Software
expense
|
|
53
|
|
|
51
|
|
|
46
|
|
|
15.8
|
|
|
15.2
|
|
Loan-related
expense
|
|
36
|
|
|
32
|
|
|
37
|
|
|
50.3
|
|
|
(2.7)
|
|
Outside IT
services
|
|
44
|
|
|
41
|
|
|
29
|
|
|
29.4
|
|
|
51.7
|
|
Professional
services
|
|
26
|
|
|
22
|
|
|
35
|
|
|
73.1
|
|
|
(25.7)
|
|
Amortization of
intangibles
|
|
42
|
|
|
32
|
|
|
23
|
|
|
125.7
|
|
|
82.6
|
|
Regulatory
charges
|
|
32
|
|
|
30
|
|
|
25
|
|
|
26.8
|
|
|
28.0
|
|
Foreclosed property
expense
|
|
8
|
|
|
11
|
|
|
14
|
|
|
(109.7)
|
|
|
(42.9)
|
|
Merger-related and
restructuring charges, net
|
|
92
|
|
|
23
|
|
|
25
|
|
|
NM
|
|
|
NM
|
|
Loss (gain) on early
extinguishment of debt
|
|
—
|
|
|
(1)
|
|
|
172
|
|
|
NM
|
|
|
(100.0)
|
|
Other
expense
|
|
231
|
|
|
198
|
|
|
217
|
|
|
67.0
|
|
|
6.5
|
|
Total noninterest
expense
|
|
$
|
1,797
|
|
|
$
|
1,545
|
|
|
$
|
1,653
|
|
|
65.6
|
|
|
8.7
|
|
|
|
|
|
|
|
|
|
|
|
|
NM - not
meaningful.
|
|
|
|
|
|
|
|
|
|
|
Second Quarter 2016 compared to First Quarter 2016
Noninterest expense was $1.8
billion for the second quarter, up $252 million compared to the prior quarter. This
change was driven by higher personnel expense, merger-related and
restructuring charges, and amortization of intangibles, all of
which were primarily the result of acquisitions as well as higher
other expense.
Personnel expense increased $124
million, primarily driven by an increase in salary expense
of $44 million, which reflects an
increase in full-time equivalent employees of 1,896 following
recent acquisition activity. The higher personnel expense also
includes a $40 million increase in
certain post-employment benefits expense, which is offset in other
income. Additionally, incentives increased $36 million, which is primarily due to the Swett
and Crawford acquisition and higher overall volume.
Merger-related and restructuring charges increased $69 million, primarily the result of the second
quarter acquisitions as well as $29
million in restructuring charges related to severance and
real estate initiated during the quarter.
Other expense increased $33
million primarily due to operating charge-offs, charitable
contributions, travel expenses, certain checkcard expenses and
taxes and licenses.
Second Quarter 2016 compared to Second Quarter 2015
Noninterest expense for the second quarter of 2016 was up
$144 million compared to the earlier
quarter. This increase reflects higher expense in a number of
categories primarily resulting from acquisition activity, as well
as an increase in other expense.
Personnel expense increased $175
million, driven by a $94
million increase in salaries, which reflects an increase in
full time equivalent employees of 5,046 primarily resulting from
acquisitions. Personnel expense also reflects a $31 million increase in incentives due to
improved performance relative to target measures and the Swett and
Crawford acquisition. Additionally, expense related to certain
post-employment benefits expense (offset in other income) was
higher $18 million, and pension
expense increased $13 million
primarily due to changes in actuarial assumptions.
Occupancy and equipment expense, amortization of intangibles and
merger-related and restructuring charges increased $28 million, $19
million and $67 million,
respectively, as a result of acquisition activity. Merger-related
and restructuring charges also included the $29 million in previously described restructuring
activities. Outside IT services increased $15 million primarily due to various
systems-related initiatives.
Other expense increased $14
million primarily due to higher checkcard expense and higher
depreciation of property held under operating leases.
LOANS AND
LEASES - average balances
|
|
(dollars in
millions)
|
|
|
|
|
|
|
|
|
|
|
Change Due
To
|
|
|
|
2Q16
|
|
|
1Q16
|
|
|
Change
|
|
|
NPBC
|
|
|
Organic
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and
industrial
|
|
$
|
51,646
|
|
|
$
|
48,013
|
|
|
$
|
3,633
|
|
|
$
|
2,505
|
|
|
$
|
1,128
|
|
CRE-income producing
properties
|
|
14,786
|
|
|
13,490
|
|
|
1,296
|
|
|
1,151
|
|
|
145
|
|
CRE-construction and
development
|
|
3,669
|
|
|
3,619
|
|
|
50
|
|
|
129
|
|
|
(79)
|
|
Dealer floor
plan
|
|
1,305
|
|
|
1,239
|
|
|
66
|
|
|
—
|
|
|
66
|
|
Direct retail
lending
|
|
12,031
|
|
|
11,107
|
|
|
924
|
|
|
889
|
|
|
35
|
|
Sales
finance
|
|
9,670
|
|
|
10,049
|
|
|
(379)
|
|
|
154
|
|
|
(533)
|
|
Revolving
credit
|
|
2,477
|
|
|
2,463
|
|
|
14
|
|
|
8
|
|
|
6
|
|
Residential
mortgage
|
|
30,471
|
|
|
29,864
|
|
|
607
|
|
|
967
|
|
|
(360)
|
|
Other lending
subsidiaries
|
|
13,961
|
|
|
13,439
|
|
|
522
|
|
|
—
|
|
|
522
|
|
Acquired from FDIC
and PCI
|
|
1,130
|
|
|
1,098
|
|
|
32
|
|
|
102
|
|
|
(70)
|
|
Total loans and leases
held for investment
|
|
$
|
141,146
|
|
|
$
|
134,381
|
|
|
$
|
6,765
|
|
|
$
|
5,905
|
|
|
$
|
860
|
|
Average loans held for investment for the second quarter of 2016
were $141.1 billion, up $6.8 billion compared to the first quarter of
2016. National Penn ("NPBC") contributed $5.9 billion of average loans. Excluding National
Penn, average loans were up 2.6% annualized. The following
discussion describes the growth of average loans excluding National
Penn for the second quarter of 2016 compared to the first
quarter.
Average commercial and industrial loans increased 9.4%
annualized primarily due to growth in large corporate lending as
well as seasonal growth in mortgage warehouse lending.
Average commercial real estate – income producing properties
loans increased 4.3% annualized, while average commercial real
estate – construction and development loans decreased 8.8%
annualized. These fluctuations reflect the completion of client
construction projects and the related movement to permanent
financing sources.
Dealer floor plan average loans were up 21.4% annualized, due to
organic client additions during the first half of 2016 and higher
utilization by existing clients.
Average sales finance loans declined approximately 21.3%
annualized, primarily due to the continued effects of the dealer
pricing structure changes implemented during the third quarter of
2015.
Average residential mortgage loans decreased 4.8% annualized,
which primarily reflects the continuing strategy to sell conforming
residential mortgage loan production.
Other lending subsidiaries average loans increased 15.6%
annualized, due to strong seasonal growth.
DEPOSITS -
average balances
|
|
(dollars in
millions)
|
|
|
|
|
|
|
|
|
|
|
Change Due
To
|
|
|
|
2Q16
|
|
|
1Q16
|
|
|
Change
|
|
|
NPBC
|
|
|
Organic
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing
deposits
|
|
$
|
48,801
|
|
|
$
|
46,203
|
|
|
$
|
2,598
|
|
|
$
|
1,210
|
|
|
$
|
1,388
|
|
Interest
checking
|
|
28,376
|
|
|
25,604
|
|
|
2,772
|
|
|
1,765
|
|
|
1,007
|
|
Money market and
savings
|
|
63,195
|
|
|
60,424
|
|
|
2,771
|
|
|
2,445
|
|
|
326
|
|
Time
deposits
|
|
18,101
|
|
|
16,884
|
|
|
1,217
|
|
|
1,136
|
|
|
81
|
|
Foreign office
deposits - interest-bearing
|
|
1,865
|
|
|
752
|
|
|
1,113
|
|
|
—
|
|
|
1,113
|
|
Total
deposits
|
|
$
|
160,338
|
|
|
$
|
149,867
|
|
|
$
|
10,471
|
|
|
$
|
6,556
|
|
|
$
|
3,915
|
|
Average deposits for the second quarter were $160.3 billion, an increase of $10.5 billion compared to the prior quarter.
National Penn contributed $6.6
billion of average deposits. Excluding National Penn,
average deposits were up 10.5% annualized. The following discussion
describes growth of average deposits excluding National Penn for
the second quarter of 2016 compared to the first quarter.
Average noninterest-bearing deposits increased 12.1% annualized
due to increases in personal balances and commercial balances,
partially offset by decreases in public funds.
Interest checking grew 15.8% annualized primarily due to
increases in personal balances and commercial balances.
Money market and savings increased 2.2% annualized as
increases in personal balances and commercial balances were
partially offset by declines in public funds.
Average foreign office deposits were up $1.1 billion primarily due to elevated short-term
funding needs as a result of the acquisitions of National Penn and
Swett & Crawford.
Including acquisitions, noninterest-bearing deposits represented
30.4% of total average deposits for the second quarter, compared to
30.8% for the prior quarter and 31.5% a year ago. The cost of
interest-bearing deposits was 0.23% for the second quarter, down
two basis points compared to the prior quarter.
SEGMENT
RESULTS
|
|
(dollars in
millions)
|
|
|
|
|
|
|
|
|
|
|
Change 2Q16
vs.
|
|
Segment Net
Income
|
|
2Q16
|
|
|
1Q16
|
|
|
2Q15
|
|
|
1Q16
|
|
2Q15
|
|
Community
Banking
|
|
$
|
294
|
|
|
$
|
301
|
|
|
$
|
231
|
|
|
$
|
(7)
|
|
|
$
|
63
|
|
Residential Mortgage
Banking
|
|
44
|
|
|
39
|
|
|
69
|
|
|
5
|
|
|
(25)
|
|
Dealer Financial
Services
|
|
51
|
|
|
42
|
|
|
49
|
|
|
9
|
|
|
2
|
|
Specialized
Lending
|
|
61
|
|
|
56
|
|
|
58
|
|
|
5
|
|
|
3
|
|
Insurance
Holdings
|
|
44
|
|
|
53
|
|
|
53
|
|
|
(9)
|
|
|
(9)
|
|
Financial
Services
|
|
87
|
|
|
27
|
|
|
70
|
|
|
60
|
|
|
17
|
|
Other, Treasury and
Corporate
|
|
6
|
|
|
52
|
|
|
(29)
|
|
|
(46)
|
|
|
35
|
|
Total net
income
|
|
$
|
587
|
|
|
$
|
570
|
|
|
$
|
501
|
|
|
$
|
17
|
|
|
$
|
86
|
|
Second Quarter 2016 compared to First Quarter 2016
The financial information related to National Penn's operations
is included in the Other, Treasury & Corporate segment for the
second quarter of 2016 and will be presented in the other segments
following the systems conversion date in July 2016.
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 $294
million for the second quarter of 2016, a decrease of
$7 million compared to the prior
quarter.
Segment net interest income was up slightly, primarily due to
deposit growth and higher funding spreads on deposits. Noninterest
income increased $17 million driven
by higher service charges on deposits, checkcard fees, and bankcard
and merchant services fees. Intersegment net referral fees
increased $10 million primarily the
result of higher mortgage loan referrals.
The allocated provision for credit losses was $23 million for the second quarter of 2016
compared to a benefit of $10 million
in the prior quarter. This change was primarily the result of loan
growth and an increase in loss estimates related to commercial and
industrial loans, partially offset by lower net charge-offs.
Noninterest expense increased $13
million driven by higher merger-related and restructuring
charges, checkcard expense, and donations and contributions.
Residential Mortgage Banking
Residential Mortgage Banking originates and purchases mortgage
loans to either hold for investment or sell to third-parties.
BB&T generally retains the servicing rights to loans sold.
Mortgage products include fixed and adjustable-rate government
guaranteed and conventional loans used for the purpose of
constructing, purchasing or refinancing residential properties.
Substantially all of the properties are owner-occupied.
Residential Mortgage Banking net income was $44 million for the second quarter of 2016, an
increase of $5 million compared to
the prior quarter.
Segment net interest income was slightly higher, primarily the
result of growth in loans held for sale. Noninterest income
increased $11 million driven by
higher gains on residential mortgage loan production and sales.
Noninterest expense increased $11
million driven by higher personnel expense associated with
increased production volumes.
Dealer Financial Services
Dealer Financial Services 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. In conjunction
with Community Banking, Dealer Financial Services provides
financing and servicing to dealers for their inventories in
Community Banking's footprint.
Dealer Financial Services net income was $51 million for the second quarter of 2016, an
increase of $9 million compared to
the prior quarter. This increase was driven by an $18 million reduction in the allocated provision
for credit losses primarily the result of seasonally lower net
charge-offs in the Regional Acceptance loan portfolio.
Specialized Lending
Specialized Lending consists of businesses that provide
specialty finance solutions 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 $61
million for the second quarter of 2016, an increase of
$5 million compared to the prior
quarter. This increase was primarily due to higher segment revenues
partially offset by higher incentive expense and depreciation of
property held under operating leases. Segment net interest income
was up primarily due to growth in mortgage warehouse and small
ticket dealer-based finance loans, partially offset by lower rates
on new loans. Increased noninterest income was driven by higher
commercial mortgage income.
Specialized Lending average loans increased $1.0 billion, or 26.1% on an annualized basis,
primarily due to higher mortgage warehouse, small ticket
dealer-based finance, commercial mortgage and insurance premium
finance loans.
Insurance Holdings
BB&T's insurance agency / brokerage network is the fifth
largest in the United States and
sixth largest in the world. Insurance Holdings provides property
and casualty, life, and health insurance to businesses 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. The results for
wholesale insurance broker Swett & Crawford are included in the
segment.
Insurance Holdings net income was $44
million in the second quarter of 2016, a decrease of
$9 million compared to the prior
quarter.
Noninterest income increased $44
million, which primarily reflects the addition of Swett and
Crawford, higher new and renewal property and casualty commissions
and higher life insurance commissions, partially offset by lower
employee benefits commissions as a result of seasonality.
Noninterest expense increased $51
million, primarily due to the Swett & Crawford
acquisition that led to higher personnel, occupancy and equipment
expense, and amortization of intangibles.
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 a variety of investment services,
including discount brokerage services, equities, annuities, mutual
funds and government bonds through BB&T Investment Services,
Inc. The segment includes BB&T Securities, a full-service
brokerage and investment banking firm, and the Corporate Banking
Division, which originates and services large corporate
relationships, syndicated lending relationships and client
derivatives. The segment also includes the company's SBIC private
equity investments.
Financial Services net income was $87
million in the second quarter of 2016, an increase of
$60 million compared to the prior
quarter.
Segment net interest income was up, driven by loan and deposit
growth. Noninterest income increased $13
million, primarily due to higher client derivative income
and investment banking and brokerage fees and commissions,
partially offset by lower income from SBIC private equity
investments. The allocated provision for credit losses decreased
$84 million compared to the prior
quarter. This change was driven by higher net charge-offs and
increased reserves in the earlier quarter primarily related to
energy lending exposure within the Corporate Banking loan
portfolio.
Corporate Banking's average loan balances increased $814 million, or an annualized 24.0%, over the
prior quarter, while BB&T Wealth's average loan balances
increased $54 million, or 13.4% on an
annualized basis. Corporate Banking's average transaction account
deposits grew $769 million, or 195.2%
on an annualized basis over the prior quarter. BB&T Wealth's
average transaction account deposits grew $171 million, or 16.4% 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.
The financial information related to substantially all of
National Penn's operations is included in the Other, Treasury &
Corporate segment until the date of systems conversion, which is
expected to occur during the third quarter of 2016.
Other, Treasury & Corporate net income was $6 million in the second quarter of 2016, down
$46 million compared to the prior
quarter.
Segment net interest income increased $64
million, primarily due to the addition of National Penn in
the current quarter. Noninterest income increased $22 million, primarily due to an increase in
income related to assets for certain post-employment benefits and
the addition of National Penn, partially offset by $45 million in securities gains in the prior
quarter. Noninterest expense increased $150
million, primarily due to National Penn, expense related to
assets for certain post-employment benefits, and higher
merger-related and restructuring charges.
Second Quarter 2016 compared to Second Quarter 2015
Community Banking
Community Banking net income was $294
million for the second quarter of 2016, an increase of
$63 million compared to the earlier
quarter. Segment net interest income and noninterest income
increased $188 million and
$15 million, respectively, primarily
driven by prior-year acquisition activity and higher funding
spreads on deposits. The allocated provision for credit losses
increased $12 million as a result of
higher loss estimates in the commercial and industrial loan
portfolio, partially offset by lower net charge-offs. Noninterest
expense increased $62 million driven
by higher personnel and occupancy and equipment expense, primarily
attributable to the prior-year acquisitions. Allocated corporate
expense increased by $23 million
compared to the earlier quarter, primarily driven by
acquisitions.
Residential Mortgage Banking
Residential Mortgage Banking net income was $44 million for the second quarter of 2016, a
decrease of $25 million compared to
the earlier quarter. Segment net interest income was down slightly,
primarily due to lower average loan balances. Noninterest income
decreased $18 million, driven by
lower net mortgage servicing rights income and production-related
revenue. The increase in noninterest expense was driven by higher
personnel and loan processing expense, partially offset by lower
professional services expense.
Dealer Financial Services
Dealer Financial Services net income was $51 million for the second quarter of 2016, an
increase of $2 million compared to
the earlier quarter. Segment net interest income was up, primarily
due to the addition of Susquehanna's consumer auto leasing business
as well as growth in the Regional Acceptance loan portfolio. The
allocated provision for credit losses increased $10 million, driven by higher net charge-offs in
the Regional Acceptance loan portfolio due to portfolio mix and an
increase in loss severity.
Specialized Lending
Specialized Lending net income was $61
million for the second quarter of 2016, an increase of
$3 million compared to the earlier
quarter. Segment net interest income increased $20 million, primarily attributable to the
addition of Susquehanna's small business equipment finance group as
well as growth in the small ticket dealer-based finance portfolio,
partially offset by lower interest rates on new loans. The
allocated provision for credit losses was up slightly, primarily
due to mortgage warehouse loan growth and higher net charge-offs in
the small business equipment finance portfolio and the small ticket
dealer-based finance portfolio. Noninterest expense was up,
primarily due to higher personnel expense and depreciation of
property held under operating leases related to growth in Equipment
Finance's lease portfolio.
Insurance Holdings
Insurance Holdings net income was $44
million for the second quarter of 2016, a decrease of
$9 million compared to the earlier
quarter. Noninterest income increased $40
million, which primarily reflects the addition of Swett and
Crawford and higher life insurance commissions, partially offset by
the sale of American Coastal in the second quarter of 2015.
Noninterest expense increased $40
million, primarily due to the Swett & Crawford
acquisition that led to higher personnel, occupancy and equipment
expense, and amortization of intangibles.
Financial Services
Financial Services net income was $87
million in the second quarter of 2016, an increase of
$17 million compared to the earlier
quarter. Segment net interest income increased $29 million, primarily driven by higher loan
balances and higher funding spreads on deposits for Corporate
Banking and BB&T Wealth. The allocated provision for credit
losses decreased $17 million, driven
by increased loss estimates in the earlier quarter for the
Corporate Banking loan portfolio. Noninterest expense increased
$13 million compared to the earlier
quarter, primarily due to higher personnel expense and
restructuring charges.
Other, Treasury & Corporate
Other, Treasury & Corporate net income was $6 million, an increase of $35 million compared to the earlier quarter.
Segment net interest income increased $64
million driven by the addition of National Penn. Noninterest
income increased $74 million,
primarily attributable to an increase in income related to assets
for certain post-employment benefits and the addition of National
Penn. In addition, noninterest income in the earlier quarter
included the previously discussed loss on sale of American Coastal.
The segment allocated $36 million
more of expense to other operating segments compared to the earlier
quarter.
CAPITAL RATIOS
(1)
|
|
|
|
2Q16
|
|
|
1Q16
|
|
|
4Q15
|
|
|
3Q15
|
|
|
2Q15
|
|
Risk-based:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common equity Tier
1
|
|
10.0
|
%
|
|
10.4
|
%
|
|
10.3
|
%
|
|
10.1
|
%
|
|
10.4
|
%
|
Tier 1
|
|
11.7
|
|
|
12.2
|
|
|
11.8
|
|
|
11.7
|
|
|
12.1
|
|
Total
|
|
13.9
|
|
|
14.6
|
|
|
14.3
|
|
|
14.2
|
|
|
14.2
|
|
Leverage
|
|
9.6
|
|
|
10.1
|
|
|
9.8
|
|
|
9.9
|
|
|
10.2
|
|
Tangible common
equity to tangible assets (2)
|
|
7.6
|
|
|
7.8
|
|
|
7.7
|
|
|
7.7
|
|
|
8.1
|
|
|
|
(1)
|
Current quarter
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, 2016. BB&T
declared total common dividends of $0.28 per share during the second quarter of
2016, which represents a $0.01
increase and resulted in a dividend payout ratio of 41.8%. Capital
ratios decreased during the second quarter as the deployment of
capital for acquisitions was greater than the impact of 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 9.8% at June 30,
2016 and 10.2% at March 31, 2016.
BB&T's liquidity coverage ratio was approximately 135% at
June 30, 2016, 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
13.7% at June 30, 2016.
ASSET QUALITY
(1)
|
|
(dollars in
millions)
|
|
|
|
|
|
|
|
|
|
|
Change 2Q16
vs.
|
|
|
|
2Q16
|
|
|
1Q16
|
|
|
2Q15
|
|
|
1Q16
|
|
|
2Q15
|
|
Total nonperforming
assets
|
|
$
|
886
|
|
|
$
|
903
|
|
|
$
|
729
|
|
|
$
|
(17)
|
|
|
$
|
157
|
|
Total performing
TDRs
|
|
1,003
|
|
|
981
|
|
|
1,027
|
|
|
22
|
|
|
(24)
|
|
Total loans 90 days
past due and still accruing
|
|
610
|
|
|
609
|
|
|
699
|
|
|
1
|
|
|
(89)
|
|
Total loans 30-89
days past due
|
|
914
|
|
|
825
|
|
|
835
|
|
|
89
|
|
|
79
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonperforming loans
and leases as a percentage of loans and leases held for investment
(%)
|
|
0.56
|
|
|
0.58
|
|
|
0.47
|
|
|
(0.02)
|
|
|
0.09
|
|
Nonperforming assets
as a percentage of total assets (%)
|
|
0.40
|
|
|
0.42
|
|
|
0.38
|
|
|
(0.02)
|
|
|
0.02
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan
and lease losses as a percentage of loans and leases held for
investment (%)
|
|
1.06
|
|
|
1.10
|
|
|
1.19
|
|
|
(0.04)
|
|
|
(0.13)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net charge-offs as a
percentage of average loans and leases (%) annualized
|
|
0.28
|
|
|
0.46
|
|
|
0.33
|
|
|
(0.18)
|
|
|
(0.05)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratio of allowance
for loan and lease losses to net charge-offs (times)
annualized
|
|
3.88
|
|
|
2.40
|
|
|
3.71
|
|
|
1.48
|
|
|
0.17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratio of allowance
for loan and lease losses to nonperforming loans and leases held
for investment (times)
|
|
1.90
|
|
|
1.89
|
|
|
2.55
|
|
|
0.01
|
|
|
(0.65)
|
|
|
|
(1)
|
Includes amounts
related to government guaranteed GNMA mortgage loans that BB&T
has the right but not the obligation to repurchase. In prior
quarters, these loans were excluded from this table. See footnotes
on the Credit Quality pages of the Quarterly Performance Summary
for additional information.
|
Nonperforming assets totaled $886
million at June 30, 2016, down $17 million compared to March 31, 2016. The
decrease was driven by a $24 million
decline in total foreclosed properties. At June 30, 2016,
nonperforming loans and leases represented 0.56% of loans and
leases held for investment, compared to 0.58% at March 31,
2016.
Performing TDRs increased $22
million during the second quarter, driven by a $31 million increase in government guaranteed
residential mortgage loans. This increase was primarily the result
of implementing a change in the strategy of repurchasing loans from
GNMA pools that BB&T has the right but not the obligation to
repurchase.
Loans 30-89 days past due and still accruing totaled
$914 million at June 30, 2016,
up $89 million compared to the prior
quarter. This increase was primarily driven by seasonality in
retail portfolios.
Loans 90 days or more past due and still accruing totaled
$610 million at June 30, 2016,
essentially flat compared to the prior quarter, as an increase in
past due loans acquired from the FDIC and PCI loans was offset by a
decrease in government guaranteed residential mortgage loans.
Excluding government guaranteed and acquired from FDIC and PCI
loans, the ratio of loans 90 days or more past due and still
accruing as a percentage of loans and leases was 0.05% at
June 30, 2016, a decline of one basis point compared to the
prior quarter.
Net charge-offs during the second quarter totaled $97 million, down $57
million compared to the prior quarter, primarily due to
$30 million of prior quarter
charge-offs related to the energy lending portfolio. As a
percentage of average loans and leases, annualized net charge-offs
were 0.28%, compared to 0.46% in the prior quarter.
The allowance for loan and lease losses, excluding the allowance
for loans acquired from the FDIC and PCI loans, was $1.4 billion, up $17
million compared to the prior quarter. The allowance for
loans acquired from the FDIC and PCI loans was $65 million, essentially flat compared to the
prior quarter. As of June 30, 2016, the total allowance for
loan and lease losses was 1.06% of loans and leases held for
investment, compared to 1.10% at March 31, 2016, which
reflects the addition of National Penn loans with no allowance as
of the acquisition date.
The allowance for loan and lease losses was 1.90 times
nonperforming loans and leases held for investment, compared to
1.89 times at March 31, 2016. At June 30, 2016, the
allowance for loan and lease losses was 3.88 times annualized net
charge-offs, compared to 2.40 times at March 31, 2016.
Earnings presentation and Quarterly Performance
Summary
To listen to BB&T's live second quarter 2016 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 2016 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, 2016, BB&T is one of the largest
financial services holding companies in the U.S. with $221.9 billion in assets and market
capitalization of $29.0 billion.
Based in Winston-Salem, N.C., the
company operates 2,249 financial centers in 15 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.
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 that exclude the impact of intangible assets and their
related amortization. These measures are useful for evaluating the
performance of a business consistently, whether acquired or
developed internally. 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 returns relative to balance sheet
risk 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 and purchased credit impaired ("PCI")
loans as well as government guaranteed loans. 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 or
reflective of asset collectibility.
- Adjusted fee income and adjusted 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.
- 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 and PCI loans acquired from Susquehanna and
National Penn. Core net interest margin is also adjusted to remove
the purchase accounting marks and related amortization for non-PCI
loans, deposits and long-term debt acquired from Susquehanna and
National Penn. BB&T's management believes that the adjustments
to the calculation of net interest margin for certain assets and
deposits acquired provide investors with useful information related
to the performance 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 2016 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.
Forward-looking statements are not based on historical facts but
instead represent management's expectations and assumptions
regarding BB&T's business, the economy and other future
conditions. Because forward-looking statements relate to the
future, they are subject to inherent uncertainties, risks and
changes in circumstances that are difficult to predict. BB&T's
actual results may differ materially from those contemplated by the
forward-looking statements. 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. While
there is no assurance that any list of risks and uncertainties or
risk factors is complete, important factors that could cause actual
results to differ materially from those in the forward-looking
statements include the following, without limitation:
- 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 national or global financial markets,
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
and the impact of recent market disruptions in China;
- changes in the interest rate environment, including interest
rate changes made by the Federal Reserve, 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
or develop products that enable them to compete more successfully
than BB&T and may be subject to different regulatory standards
than BB&T;
- cyber-security risks, including "denial of service,"
"hacking" and "identity theft," could adversely affect our business
and financial performance or our reputation, and we could be liable
for financial losses incurred by third parties due to breaches of
data shared between financial institutions;
- natural or other disasters, including acts of domestic or
foreign terrorism, 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 related to the integration of the businesses of
BB&T and its merger partners may be greater than
expected;
- failure to execute on strategic or operational plans,
including the ability to successfully complete and/or integrate
mergers and acquisitions or fully achieve expected cost savings or
revenue growth associated with mergers and acquisitions within the
expected time frames could adversely impact financial condition and
results of operations;
- significant litigation could have a material adverse effect
on BB&T;
- unfavorable resolution of legal proceedings or other claims
and regulatory and other governmental investigations or other
inquiries could result in negative publicity, protests, fines,
penalties, restrictions on BB&T's operations or ability to
expand its business and other negative consequences, all of which
could cause reputational damage and adversely impact BB&T's
financial conditions and results of operations;
- deposit attrition, customer loss and/or revenue loss
following completed mergers and acquisitions may be greater than
expected;
- higher than expected costs related to information technology
infrastructure or a failure to successfully implement future system
enhancements could adversely impact BB&T's financial condition
and results of operations and could result in significant
additional costs to BB&T; and
- widespread system outages, caused by the failure of critical
internal systems or critical services provided by third parties,
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,
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SOURCE BB&T Corporation