WINSTON-SALEM, N.C.,
Sept. 15, 2016 /PRNewswire/
-- BB&T Corporation (BB&T) announced today that its
subsidiary, Branch Banking and Trust Company (Branch Bank) has
entered into an agreement with the Federal Deposit Insurance
Corporation (FDIC) that terminates the loss share agreements
between Branch Bank and the FDIC. The loss share agreements were
entered into during 2009 in connection with the acquisition of
selected assets and liabilities of Colonial Bank in an
FDIC-assisted transaction.
BB&T's Chairman and Chief Executive Officer Kelly S. King said, "We've enjoyed a successful
partnership with the FDIC. The transaction significantly
strengthened BB&T's franchise in important markets and
benefitted the communities, clients and associates of Colonial
Bank, as well as BB&T's shareholders." Under the terms of the
agreement, Branch Bank will make a cash payment of $230 million and the FDIC will no longer share in
future benefits related to these assets.
"The acquisition of Colonial was a tremendously successful
transaction and has far outperformed our initial expectations,"
said BB&T's Chief Financial Officer Daryl N. Bible. "The early termination of these
agreements is beneficial for both BB&T and the FDIC, including
the reduction of costs and accounting, reporting complexity and
increased future earnings."
The early termination eliminates all assets and liabilities
associated with the indemnification by the FDIC, which amounted to
a net liability of approximately $210
million at June 30. As a
result of the settlement, BB&T will recognize pre-tax expense
of approximately $20 million this
quarter. There will be a positive impact to future earnings related
to the elimination of FDIC amortization expense, which totaled
$124 million for the six months ended
June 30, 2016. BB&T retains
ownership of the related loans, securities and other assets. The
accounting for the related assets, including yields, is not
affected by the termination of the loss share agreement. As of
June 30, BB&T reported
$1.7 billion of assets acquired from
the FDIC, of which $482 million of
loans and $22 million of other assets
were still subject to loss sharing provisions. The termination also
eliminates the gain-sharing provision on $943 million of securities. The bank will
recognize all future recoveries, losses and expenses related to the
previously covered assets since the FDIC will no longer share in
those amounts.
About BB&T
BB&T is one of the largest financial services holding
companies in the U.S. with approximately $221.9 billion in assets and market
capitalization of approximately $29.0
billion, as of June 30, 2016.
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 recognized
consistently for outstanding client satisfaction by the U.S. Small
Business Administration, Greenwich Associates, and others. BB&T
also has been named one of the World's Strongest Banks by
Bloomberg Markets Magazine, one of the top three in the U.S.
and in the top 15 globally. More information about BB&T and its
full line of products and services is available at BBT.com.
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SOURCE BB&T Corporation