WINSTON-SALEM, North Carolina,
Oct. 19, 2016 /PRNewswire/ --
BB&T Corporation (NYSE: BBT) today reported quarterly earnings
for the third quarter of 2016. Net income available to common
shareholders was $599 million, up
21.7% from the third quarter of 2015. Earnings per diluted common
share were $0.73 for the third
quarter of 2016. Excluding pre-tax merger-related and restructuring
charges of $43 million ($27 million after tax), net income available to
common shareholders was $626 million,
or $0.76 per diluted share.
Net income available to common shareholders was $541 million ($0.66
per diluted share) for the second quarter of 2016 and $492 million ($0.64
per diluted share) for the third quarter of 2015.
"We are pleased to report record earnings for the third
quarter," said Chairman and Chief Executive Officer Kelly S. King. "We achieved strong revenue
growth and excellent expense control by capitalizing on our recent
acquisitions.
"Taxable-equivalent revenues were $2.8
billion, up $325 million
compared to the third quarter of 2015," said King. "For comparison,
noninterest expense increased $117
million over the same period, highlighting the strong
leverage we achieved with our acquisitions.
"We also completed several strategic actions during the
quarter," said King. "We terminated our loss sharing agreements
with the FDIC, settled certain matters related to FHA-insured
mortgage loans, made a $50 million
charitable contribution and completed $160
million of share repurchases. While these actions did not
have a significant net impact on our quarterly results, they will
reduce ongoing costs and complexity and position us to provide
greater returns for our shareholders."
Third Quarter 2016 Performance Highlights
- Taxable-equivalent revenues were $2.8
billion for the third quarter, up $27
million from the second quarter of 2016
- Net interest income on a taxable-equivalent basis was down
$7 million
- Net interest margin was 3.39%, down two basis points
- Noninterest income was up $34
million
- Fee income ratio was 41.9%, compared to 41.2% for the prior
quarter
- Noninterest expense was $1.7
billion, down $86 million
compared to the second quarter of 2016
- Personnel expense decreased $33
million primarily due to lower production-based incentives
and employee benefits
- Merger-related and restructuring charges were $49 million lower as the National Penn and Swett
& Crawford acquisitions occurred at the start of the prior
quarter
- GAAP efficiency ratio was 61.7%, compared to 65.4% for the
prior quarter. Adjusted efficiency ratio was 58.7%, compared to
59.6% for the prior quarter
- Average loans and leases held for investment were $141.3 billion compared to $141.1 billion for the second quarter of 2016
- Average other lending subsidiaries loans increased $781 million, or 22.3% annualized
- Average CRE-construction and development loans increased
$133 million, or 14.4%
annualized
- Average sales finance loans declined $331 million, or 13.6% annualized
- Average deposits were $159.5
billion compared to $160.3
billion for the prior quarter
- Average noninterest-bearing deposits increased $1.8 billion, or 14.3% annualized
- Average interest-bearing deposit costs were 0.23%, flat
compared to the prior quarter
- Deposit mix remained strong, with average noninterest-bearing
deposits representing 31.7% of total deposits, compared to 30.4% in
the prior quarter
- Asset quality remained strong
- Loans 90 days or more past due and still accruing were 0.42% of
loans held for investment, compared to 0.43% in the prior
quarter
- Loans 30-89 days past due and still accruing were 0.69% of
loans held for investment, compared to 0.64% in the prior
quarter
- The allowance for loan and lease losses was 1.06% of loans held
for investment, flat compared to the prior quarter, which includes
the impact of a shared national credit review
- Nonperforming assets decreased $43
million, driven by reductions in commercial and industrial
nonperforming loans
- The allowance for loan loss coverage ratio was 2.00 times
nonperforming loans held for investment, versus 1.90 times in the
prior quarter
- Capital levels remained strong across the board
- Common equity tier 1 to risk-weighted assets was 10.1%, or 9.9%
on a fully phased-in basis
- Tier 1 risk-based capital was 11.8%
- Total capital was 14.0%
- Leverage capital was 9.8%
Earnings presentation and Quarterly Performance
Summary
To listen to BB&T's live third 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
https://bbt.investorroom.com/webcasts-and-presentations. 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
https://bbt.investorroom.com/webcasts-and-presentations.
BB&T's third 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 September 30, 2016, BB&T is one of the largest
financial services holding companies in the U.S. with $222.6 billion in assets and market
capitalization of $30.6 billion.
Based in Winston-Salem, N.C., the
company operates 2,220 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. 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 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 these non-GAAP measures provide a
greater understanding of ongoing operations and enhance
comparability of results with prior periods as well as demonstrate
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 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 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 were covered by FDIC
loss sharing agreements and purchased credit impaired ("PCI") loans
as well as government guaranteed loans. Management believes their
inclusion may result in distortion of these ratios such that they
might not be comparable to other periods presented or to other
portfolios not impacted by purchase accounting or reflective of
asset collectibility.
- The adjusted efficiency ratio is non-GAAP in that it
excludes securities gains (losses), amortization of intangible
assets, merger-related and restructuring charges and other selected
items. BB&T's management uses this measure in their analysis of
the Corporation's performance. BB&T's management believes this
measure provides a greater understanding of ongoing operations and
enhances 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 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 Third
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 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 or market disruptions in Europe, China
or other global markets;
- 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 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 customers to access the 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/acquisitions may exceed
expectations;
- 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.