WINSTON-SALEM, N.C.,
April 18, 2019 /CNW/ -- BB&T
Corporation (NYSE: BBT) today reported earnings for the first
quarter of 2019. Net income available to common shareholders was
$749 million. Earnings per diluted
common share were $0.97 for the first
quarter of 2019, equal to last quarter. Results for the first
quarter produced an annualized return on average assets of 1.43
percent and an annualized return on average common shareholders'
equity of 11.08 percent.
Excluding merger-related and restructuring charges of
$80 million ($64 million after-tax), net income available to
common shareholders was a record $813
million, or $1.05 per diluted
share. Adjusted diluted earnings per share increased 8.2 percent
compared to the first quarter of 2018.
Net income available to common shareholders was $754 million ($0.97
per diluted share) for the fourth quarter of 2018 and $745 million ($0.94
per diluted share) for the first quarter of 2018.
"We are pleased to report strong earnings of $749 million, or $0.97 per diluted common share, for the first
quarter," said Chairman and Chief Executive Officer Kelly S. King. "Excluding merger-related and
restructuring charges, we achieved record quarterly earnings of
$813 million, or $1.05 per diluted common share.
"Our businesses continue to perform well, with record quarterly
insurance revenues, increased net interest margin, solid loan
growth, strong expense control, excellent asset quality, and strong
capital and liquidity," King said.
"We continue to prepare for the integration of our company with
SunTrust and are excited as our colleagues work together to create
the premier financial institution. We know that after merging with
SunTrust, we will be best positioned to help our clients achieve
financial success while continuing to invest in our communities and
associates and delivering enhanced value to our shareholders," King
said.
First Quarter 2019 Performance
Highlights
- Earnings per diluted common share were $0.97, unchanged compared to fourth quarter of
2018
-
- Diluted earnings per share were $1.05, excluding merger-related and restructuring
charges
- Return on average assets was 1.43 percent
- Return on average common shareholders' equity was 11.08
percent
- Return on average tangible common shareholders' equity was
18.36 percent
- Taxable-equivalent revenues were $2.9
billion, down $42 million from
the fourth quarter of 2018
-
- Net interest margin was 3.51 percent, up two basis points
- Noninterest income was down $33
million
- Insurance income was a record $510
million, up $23 million
- Fee income ratio was 41.5 percent, compared to 42.0 percent for
the prior quarter
- Noninterest expense was $1.8
billion, down $16 million
compared to the fourth quarter of 2018
-
- Noninterest expense includes $80
million of merger-related and restructuring charges,
primarily related to the merger of equals with SunTrust
- Excluding merger-related and restructuring charges, noninterest
expense was down $20 million, or an
annualized 4.7 percent
- GAAP efficiency ratio was 61.0 percent, compared to 60.7
percent for the prior quarter
- Adjusted efficiency ratio was 56.6 percent, compared to 56.5
percent for the prior quarter
- Average loans and leases held for investment were $148.1 billion, up $522
million, or 1.4 percent annualized compared to the fourth
quarter of 2018
-
- Average commercial and industrial loans increased $817 million, or 5.5 percent annualized
- Average CRE loans decreased $396
million, or 7.5 percent annualized
- Average residential mortgage loans increased $267 million, or 3.5 percent annualized
- Average indirect loans decreased $99
million, or 2.3 percent annualized
- Average deposits were $160.0
billion compared to $157.8
billion for the fourth quarter of 2018
-
- Average noninterest-bearing deposits decreased $1.4 billion, or 10.9 percent annualized
- Average noninterest-bearing deposits represent 32.7 percent of
total deposits, compared to 34.0 percent in the prior quarter
- Cost of average interest-bearing deposits was 0.95 percent
annualized, up 17 basis points
- Cost of average total deposits was 0.64 percent annualized, up
12 basis points
- Asset quality remains excellent
-
- Nonperforming assets were 0.26 percent of total assets; lower
than levels in 2006
- Loans 90 days or more past due and still accruing were 0.29
percent of loans held for investment, compared to 0.31 percent in
the prior quarter
- Net charge-offs were 0.40 percent of average loans and leases,
up two basis points compared to the prior quarter
- The allowance for loan loss coverage ratio was 2.97 times
nonperforming loans held for investment, versus 2.99 times in the
prior quarter
- The allowance for loan and lease losses was 1.05 percent of
loans held for investment, unchanged compared to the prior
quarter
- Capital levels remained strong across the board
-
- Common equity tier 1 to risk-weighted assets was 10.3
percent
- Tier 1 risk-based capital was 11.9 percent
- Total capital was 14.2 percent
- Leverage capital was 10.1 percent
Earnings Presentation and Quarterly Performance
Summary
To listen to BB&T's live first quarter 2019 earnings
conference call at 8 a.m. ET today,
please call 866-519-2796 and enter the participant code 892418. 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 6759252).
The presentation, including an appendix reconciling non-GAAP
disclosures, is available at
https://bbt.investorroom.com/webcasts-and-presentations. BB&T's
First Quarter 2019 Quarterly Performance Summary, which contains
detailed financial schedules, is available on BB&T's website at
https://bbt.investorroom.com/quarterly-earnings.
About BB&T
BB&T is one of the largest financial services holding
companies in the U.S. with $227.7
billion in assets and market capitalization of approximately
$35.6 billion as of March 31,
2019. 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 more
than 1,800 financial centers in 15 states and Washington, D.C. 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 Corporation 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:
|
- 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.
|
|
- Tangible common
equity and related measures are non-GAAP measures that exclude the
impact of intangible assets, net of deferred taxes, 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. In 1Q19, the calculation of tangible common
shareholder's equity was updated to include the impact of deferred
taxes on intangible assets. Prior periods have been adjusted to
conform to the new presentation.
|
|
- Core net
interest margin is a non-GAAP measure that adjusts net interest
margin to exclude the impact of purchase accounting. The interest
income and average balances for PCI loans are excluded in their
entirety as the accounting for these loans can result in
significant and unusual trends in yields. The purchase accounting
marks and related amortization for a) securities acquired from the
FDIC in the Colonial Bank acquisition and b) non-PCI loans,
deposits and long-term debt acquired from Susquehanna and National
Penn are excluded to approximate their yields at the
pre-acquisition rates. BB&T's management believes the
adjustments to the calculation of net interest margin for certain
assets and liabilities acquired provide investors with useful
information related to the performance of BB&T's earning
assets.
|
|
- The adjusted
diluted earnings per share is non-GAAP in that it excludes
merger-related and restructuring charges and other selected items,
net of tax. 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.
|
|
- The adjusted
operating leverage 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.
|
|
- The adjusted
performance ratios are non-GAAP in that they exclude merger-related
and restructuring charges and, in the case of return on average
tangible common shareholders' equity, amortization of intangible
assets. 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 enhances comparability of results with prior
periods, as well as demonstrates the effects of significant gains
and charges.
|
A reconciliation of these non-GAAP measures to the most
directly comparable GAAP measure is included in BB&T's First
Quarter 2019 Quarterly Performance Summary, which is available
at https://bbt.investorroom.com/quarterly-earnings.
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, 2018 and in any of BB&T's subsequent
filings with the Securities and Exchange Commission:
|
- risks,
uncertainties and other factors relating to the merger of SunTrust
with and into BB&T, including the ability to obtain regulatory
approvals and meet other closing conditions to the merger,
including approval of the merger by BB&T shareholders and
SunTrust shareholders and delay in closing the
merger;
|
|
- general economic
or business conditions, either nationally or regionally, may be
less favorable than expected, resulting in, among other things,
slower deposit and/or asset growth, and 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, the economic instability and recessionary
conditions in Europe;
|
|
- changes in the
interest rate environment, including interest rate changes made by
the Federal Reserve, as well as cash flow reassessments may reduce
net interest margin and/or the volumes and values of loans and
deposits as well as the value of other financial assets and
liabilities;
|
|
- 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 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;
|
|
- 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;
|
|
- 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;
|
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- 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;
|
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- 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; 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
news release. 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