WINSTON-SALEM, N.C.,
April 20, 2017 /CNW/ -- BB&T
Corporation (NYSE: BBT) today reported earnings for the first
quarter of 2017. Net income available to common shareholders was
$378 million, down 28.3 percent from
the first quarter of 2016. Earnings per diluted common share were
$0.46 for the first quarter of 2017.
Excluding a loss on the early extinguishment of higher-cost FHLB
advances of $392 million
($246 million after tax), pre-tax
merger-related and restructuring charges of $36 million ($22
million after tax), and $35
million of excess tax benefits from equity-based
compensation plans, net income available to common shareholders was
$611 million, or $0.74 per diluted share.
Net income available to common shareholders was $592 million ($0.72
per diluted share) for the fourth quarter of 2016 and $527 million ($0.67
per diluted share) for the first quarter of 2016.
"We are pleased to report strong earnings for the first
quarter," said Chairman and Chief Executive Officer Kelly S. King. "During the quarter, we
terminated $2.9 billion of
higher-cost FHLB advances, resulting in a pre-tax loss on early
extinguishment of $392 million, or
$0.30 per diluted share. This
strategic action lowers our future borrowing costs and provides a
boost to future margins and earnings.
"Taxable-equivalent revenues were a record $2.8 billion, up 9.1 percent compared to the
first quarter of 2016," King said. "Net interest income was up
$81 million and noninterest income
was up $155 million from last year as
we continue to capitalize on our acquisitions. In addition,
revenues were up 7.6 percent, from the fourth quarter of 2016.
"Expenses were $2.1 billion and
included over $400 million in debt
extinguishment and merger-related and restructuring charges," King
said. "Excluding these items, our adjusted efficiency ratio is at
its lowest level since 2014, reflecting strong expense control,
leverage from our acquisitions and excellent asset quality."
First Quarter 2017 Performance
Highlights
- Taxable-equivalent revenues were $2.8
billion for the first quarter, up $52
million from the fourth quarter of 2016
-
- Net interest income on a taxable-equivalent basis was up
$43 million
- Net interest margin was 3.46 percent, up 14 basis points;
driven by rate increases and lower borrowing costs
- Noninterest income was up $9
million
- Fee income ratio was 42.1 percent, compared to 42.6 percent for
the prior quarter
- Noninterest expense was $2.1
billion, up $434 million
compared to the fourth quarter of 2016
-
- Increase includes $392 million
loss on debt extinguishment
- Personnel expense increased $7
million
- Merger-related and restructuring charges increased $23 million
- GAAP efficiency ratio was 75.6 percent, compared to 61.1
percent for the prior quarter
- Adjusted efficiency ratio was 58.0 percent, compared to 59.5
percent for the prior quarter
- Average loans and leases held for investment were $142.0 billion compared to $142.3 billion for the fourth quarter of
2016
-
- Average sales finance loans increased $297 million, or 11.4 percent annualized,
primarily due to a portfolio purchase in the fourth quarter of
2016
- Average residential mortgage loans decreased $343 million, or 4.6 percent annualized
- Average deposits were $161.4
billion compared to $160.1
billion for the prior quarter
-
- Average noninterest-bearing deposits decreased $326 million, or 2.6 percent annualized,
primarily due to seasonality
- Average interest-bearing deposits were up $1.6 billion and costs were 0.26 percent, up four
basis points compared to the prior quarter
- Deposit mix remained strong, with average noninterest-bearing
deposits representing 31.7 percent of total deposits, compared to
32.1 percent in the prior quarter
- Asset quality remained strong
-
- Nonperforming loans decreased $13
million and represented 0.51 percent of loans held for
investment
- Loans 90 days or more past due and still accruing were 0.38
percent of loans held for investment, compared to 0.44 percent in
the prior quarter
- Loans 30-89 days past due and still accruing were 0.56 percent
of loans held for investment, compared to 0.75 percent in the prior
quarter
- The allowance for loan loss coverage ratio was 2.05 times
nonperforming loans held for investment, versus 2.03 times in the
prior quarter
- The allowance for loan and lease losses was 1.04 percent of
loans held for investment, unchanged from the prior quarter
- Capital levels remained strong across the board
-
- Common equity tier 1 to risk-weighted assets was 10.3 percent,
or 10.1 percent on a fully phased-in basis
- Tier 1 risk-based capital was 12.0 percent
- Total capital was 14.1 percent
- Leverage capital was 10.0 percent
Earnings presentation and Quarterly Performance
Summary
To listen to BB&T's live first quarter 2017 earnings
conference call at 8 a.m. ET today,
please call 888-632-5009 and enter the participant code 9586536. 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
first quarter 2017 Quarterly Performance Summary, which contains
detailed financial schedules, is available on BB&T's website at
BBT.com.
About BB&T
BB&T is one of the largest financial services holding
companies in the U.S. with $220.5
billion in assets and market capitalization of $36.3 billion as of March 31, 2017.
Building on a long tradition of excellence in community banking,
BB&T offers a wide range of financial services including retail
and commercial banking, investments, insurance, wealth management,
asset management, mortgage, corporate banking, capital markets and
specialized lending. Based in Winston-Salem, N.C., BB&T operates over
2,100 financial centers in 15 states and Washington, D.C. A Fortune 500 company,
BB&T was recognized as one of Forbes' 2017 Best Banks in
America and is consistently recognized for outstanding client
service by Greenwich Associates for small business and middle
market banking. More information about BB&T and its full line
of products and services is available at 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, enhance comparability
of results with prior periods and demonstrate the effects of
significant items in the current period. The company believes a
meaningful analysis of its financial performance requires an
understanding of the factors underlying that performance.
BB&T's management believes investors may find these non-GAAP
financial measures useful. 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 measures 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. 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 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
demonstrates 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
estimated 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 First
Quarter 2017 Quarterly Performance Summary, which is available at
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 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, as well as
the risks and uncertainties more fully discussed under Item 1A-Risk
Factors in our Annual Report on Form 10-K for the year ended
December 31, 2016 and in any of
BB&T's subsequent filings with the Securities and Exchange
Commission:
- 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, including, but not limited to, the
potential exit of the United
Kingdom from the European Union;
- changes in the interest rate environment, including interest
rate changes made by the Federal Reserve or the possibility of a
negative interest rate scenario, as well as cash flow reassessments
may reduce net interest margin 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;
- cybersecurity risks, including "denial of service,"
"hacking" and "identity theft," could adversely affect BB&T's
business and financial performance or reputation, and BB&T
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, materially disrupting
BB&T's operations or the ability or willingness of customers to
access BB&T's products and services;
- 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 and regulatory proceedings 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;
- risks resulting from the extensive use of models;
- risk management measures may not be fully
effective;
- 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.
SOURCE BB&T Corporation