BB&T Reports Rise in Profit, While SunTrust Posts Decline -- Update
April 18 2019 - 07:52AM
Dow Jones News
By Allison Prang
Profit rose at BB&T Corp. but fell at SunTrust Banks Inc. in
the first quarter, as both regional lenders recorded merger-related
expenses ahead of combining their operations.
BB&T's profit rose 0.5% to $792 million in the quarter that
ended in March, compared with the same period a year earlier.
Earnings per share were 97 cents, up from 94 cents a share.
Analysts polled by Refinitiv were expecting earnings of $1.03 a
share.
The company said it had $80 million in merger and
restructuring-related charges. BB&T reported adjusted earnings,
which excludes those charges, of $1.05 a share. Analysts were
expecting $1.03 a share.
At SunTrust, which also released its results Thursday, profit
fell 9.8% to $580 million. The bank reported earnings of $1.24 a
share, down from $1.29 a share. Analysts were expecting $1.30 a
share.
SunTrust said it had $45 million in merger-related costs, or 9
cents a share.
BB&T and SunTrust said just over two months ago that they
would merge in a stock deal that was valued at $28.2 billion.
Together, they would become the sixth-largest retail bank in the
country. A reason for the deal is to be able to scale more with
technology.
BB&T is based in Winston-Salem, N.C., while SunTrust is
based in Atlanta. The combined company would be based in Charlotte,
N.C.
Total taxable-equivalent revenue at BB&T rose 3% to $2.92
billion, slightly less than analysts anticipated. Both net interest
income and noninterest income rose.
At SunTrust, fully-taxable equivalent revenue rose 4.2% to $2.35
billion, which beat estimates from analysts. Net interest income
rose and noninterest income fell.
SunTrust said that in light of the merger, it isn't expecting to
use the $500 million it has left on its share-buyback
authorization.
SunTrust also upped its provision for credit losses to $153
million, a jump from the $28 million it set aside a year earlier.
The company attributed the increase in part to strong loan growth.
Average loans held for investment rose 7.9%.
Average loans held for investment at BB&T grew at a slower
pace, rising 3.6%. BB&T is expecting them to increase between
2% and 4% for the fiscal year.
Write to Allison Prang at allison.prang@wsj.com
(END) Dow Jones Newswires
April 18, 2019 07:37 ET (11:37 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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