WINSTON-SALEM, N.C.,
Jan. 18, 2018 /CNW/ -- BB&T
Corporation (NYSE: BBT) today reported strong earnings for the
fourth quarter of 2017. Net income available to common shareholders
was $614 million. Earnings per
diluted common share were $0.77 for
the fourth quarter of 2017, up 16.1 percent annualized from
$0.74 last quarter.
Excluding pre-tax merger-related and restructuring charges of
$22 million ($14 million after-tax) and adjustments related to
tax reform that resulted in a net after-tax expense of $43 million, net income available to common
shareholders was a record $671
million, or $0.84 per diluted
share, up 30.5 percent annualized from $0.78 last quarter.
Net income available to common shareholders was $597 million ($0.74
per diluted share) for the third quarter of 2017 and $592 million ($0.72
per diluted share) for the fourth quarter of 2016.
For the full year, net income available to common shareholders
was $2.2 billion, or $2.74 per diluted share. For 2016, net income
available to common shareholders was $2.3
billion, or $2.77 per diluted
share. Excluding merger-related and restructuring charges and
selected items, adjusted diluted earnings per share was
$3.14 for 2017, up 9.4 percent
compared to $2.87 for 2016.
"We had a very strong fourth quarter with record revenues and
good expense control," said Chairman and Chief Executive Officer
Kelly S. King. "Taxable-equivalent
revenues were $2.9 billion, up 7.4
percent annualized compared to last quarter. We expect to have
strong revenue growth in 2018.
"Total expenses for the quarter were $1.9
billion and our GAAP efficiency was 64.7 percent, primarily
due to expenses incurred in connection with the passage of tax
reform," King said. "Our adjusted efficiency ratio of 57.2 percent
reflects significant progress in our optimization efforts.
"While average total loans were essentially flat compared with
last quarter, core loans increased an annualized 3.9 percent, which
excludes prime auto, residential mortgage and PCI loans that
decreased as planned," said King. "Our credit quality is very
strong, as nonperforming assets improved and loans 90 days or more
past due and net charge-offs were relatively stable at very low
levels."
Fourth Quarter 2017 Performance
Highlights
- Taxable-equivalent revenues were a record $2.9 billion for the fourth quarter, up
$53 million from the third quarter of
2017
-
- Net interest margin was 3.43 percent, down five basis
points
- Noninterest income was up $59
million driven by higher insurance and other income
- Fee income ratio was 42.7 percent, compared to 41.4 percent for
the prior quarter
- Noninterest expense was $1.9
billion, up $110 million
compared to the third quarter of 2017
-
- Noninterest expense was essentially flat excluding tax reform
investments and merger-related and restructuring charges
- GAAP efficiency ratio was 64.7 percent, compared to 62.0
percent for the prior quarter
- Adjusted efficiency ratio was 57.2 percent, compared to 58.3
percent for the prior quarter
- Tax reform and related actions resulted in a net after-tax
expense of $43 million or
$0.05 per share
-
- Revaluation of deferred taxes and investments in affordable
housing projects resulted in a net tax benefit of $43 million
- One-time bonus paid to associates who do not generally receive
incentives or commissions of $36
million ($23 million
after-tax)
- Contribution to BB&T's philanthropic fund of $100 million ($63
million after-tax)
- Increased the minimum hourly pay rate from $12 to $15 per
hour, effective January 1, 2018
- Average loans and leases held for investment were $142.7 billion, flat compared to the third
quarter of 2017
-
- Average commercial and industrial loans increased $267 million, or 1.8 percent annualized
- Average CRE loans increased $222
million, or 4.2 percent annualized
- Average lease financing increased $119
million, or 27.3 percent annualized
- Average residential mortgage loans decreased $365 million, or 5.0 percent annualized
- Average indirect loans decreased $252
million, or 5.7 percent annualized
- Average deposits were $158.0
billion compared to $157.4
billion for the third quarter of 2017
-
- Average noninterest-bearing deposits increased $799 million, or 5.9 percent annualized
- Deposit mix strengthened, with average noninterest-bearing
deposits representing 34.4 percent of total deposits, compared to
34.0 percent in the prior quarter
- Average interest-bearing deposits decreased $254 million and costs were 0.40 percent, up five
basis points compared to the prior quarter
- Asset quality continues to improve from the prior quarter
-
- Nonperforming loans were 0.40 percent of loans held for
investment, down two basis points
- Loans 90 days or more past due and still accruing were 0.38
percent of loans held for investment, compared to 0.35 percent in
the prior quarter
- The allowance for loan loss coverage ratio was 2.62 times
nonperforming loans held for investment, versus 2.44 times in the
prior quarter
- The allowance for loan and lease losses was 1.04 percent of
loans held for investment, unchanged
- Capital levels remained strong across the board
-
- Common equity tier 1 to risk-weighted assets was 10.0
percent
- Tier 1 risk-based capital was 11.8 percent
- Total capital was 13.8 percent
- Leverage capital was 9.7 percent
Earnings Presentation and Quarterly Performance
Summary
To listen to BB&T's live fourth quarter 2017 earnings
conference call at 8 a.m. ET today,
please call 866-519-2796 and enter the participant code 885781. 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
Fourth Quarter 2017 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 $221.6
billion in assets and market capitalization of $38.9 billion as of December 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
2,000 financial centers in 15 states and Washington, D.C. A Fortune 500 company,
BB&T 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:
- 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 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 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.
A reconciliation of these non-GAAP measures to the most
directly comparable GAAP measure is included in BB&T's Fourth
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, the economic instability and
recessionary conditions in Europe,
the eventual exit of the United
Kingdom from the European Union;
- 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 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;
- 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;
- 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;
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