Market Overview

BB&T reports earnings of $735 million, or $0.95 per diluted share

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WINSTON-SALEM, N.C., Oct. 17, 2019 /PRNewswire/ -- BB&T Corporation (NYSE:BBT) today reported earnings for the third quarter of 2019. Net income available to common shareholders was $735 million, down 6.8 percent, compared with the third quarter last year. Earnings per diluted common share were $0.95 for the third quarter of 2019, a decrease of 5.9 percent compared with the same period last year. Results for the third quarter produced an annualized return on average assets (ROA) of 1.41 percent, an annualized return on average common shareholders' equity (ROCE) of 10.04 percent, and an annualized return on tangible common shareholders' equity (ROTCE) of 16.03 percent.

Adjusted net income available to common shareholders was $832 million, or $1.07 per diluted share, excluding merger-related and restructuring charges of $34 million ($26 million after-tax), incremental operating expenses related to the merger of $52 million ($40 million after-tax) and an after-tax charge of $46 million related to the redemption of preferred stock, partially offset by the after-tax impact from the sale of residential mortgage loans of $15 million. Adjusted diluted earnings per common share increased $0.04 compared to the third quarter of 2018. Adjusted results produced an annualized ROA of 1.50 percent, an annualized ROCE of 11.36 percent and an annualized ROTCE of 18.07 percent.

"We are pleased to report strong results for the third quarter, with improved adjusted earnings driven by stronger revenues and lower credit costs," said Chairman and Chief Executive Officer Kelly S. King. "While average loans held for investment decreased 4.8 percent, this result was due to our strategic decision to sell approximately $4 billion in mortgage loans during the quarter. Excluding this sale, our company generated robust loan growth of 6.5 percent on an annualized basis compared with last quarter.

"In addition, we enjoyed 2.5 percent taxable-equivalent revenue growth compared with the third quarter last year led by strong results from our fee income-generating businesses, including insurance, mortgage banking and investment banking and brokerage, as well as a resilient net interest margin in this challenging rate environment. This was due in part to lower deposit costs, which peaked last quarter.

"We continue to make significant progress laying the groundwork for our exciting merger of equals with SunTrust," said King. "We are very pleased the shareholders of both companies strongly supported the merger at their respective meetings earlier this quarter. Importantly, we have named approximately 75 percent of leadership roles for the Truist organization, so we are well prepared as we look forward to closing the merger."

Third Quarter 2019 Performance Highlights

  • Earnings per diluted common share were $0.95
    • Adjusted diluted earnings per share were $1.07
    • ROA was 1.41 percent; adjusted ROA was 1.50 percent
    • ROCE was 10.04 percent; adjusted ROCE was 11.36 percent
    • ROTCE was 16.03 percent; adjusted ROTCE was 18.07 percent
  • Taxable-equivalent revenues were $3.0 billion, up $73 million from the third quarter of 2018
    • Noninterest income increased $64 million, up 5.2 percent
    • Insurance income increased $39 million, up 8.7 percent
    • Mortgage banking income increased $33 million, up 41.8 percent
    • Fee income ratio was 43.4 percent, compared to 42.3 percent
    • Net interest margin was 3.37 percent, down five basis points from the second quarter of 2019
  • Noninterest expense was $1.8 billion, up $98 million compared to the third quarter of 2018
    • Excluding merger-related and restructuring charges and incremental operating expenses related to the merger; adjusted noninterest expenses were up 1.7 percent
    • GAAP efficiency ratio was 61.3 percent, compared to 59.5 percent
    • Adjusted efficiency ratio was 57.1 percent, compared to 57.3 percent
  • Average loans and leases held for investment were $148.7 billion, down $1.8 billion, or 4.8 percent annualized compared to the second quarter of 2019
    • Adjusted for the sale of $4.3 billion of residential mortgage loans, average loans held for investment increased 6.5 percent annualized
    • Average commercial and industrial loans increased $1.2 billion, or 7.6 percent annualized
    • Average residential mortgage loans decreased $3.7 billion, or 45.2 percent annualized; adjusted for the sale average residential mortgage loans increased 7.4 percent annualized
    • Average indirect loans increased $483 million, or 10.7 percent annualized
  • Average deposits were up $2.1 billion, or 5.2 percent annualized, compared to the prior quarter
    • Average noninterest-bearing deposits decreased $180 million, or 1.4 percent annualized
    • Average noninterest-bearing deposits represent 32.4 percent of total deposits, compared to 32.9 percent in the prior quarter
    • Cost of average interest-bearing deposits was 0.99 percent, down three basis points
    • Cost of average total deposits was 0.67 percent, down one basis point
  • Asset quality remains excellent
    • Nonperforming assets were 0.22 percent of total assets; lower than levels in 2006
    • Loans 90 days or more past due and still accruing were 0.27 percent of loans held for investment, unchanged compared to the prior quarter
    • Net charge-offs were 0.41 percent of average loans and leases, up three basis points compared to the prior quarter
    • The allowance for loan loss coverage ratio was 3.52 times nonperforming loans and leases held for investment, versus 3.46 times in the prior quarter
    • The allowance for loan and lease losses was 1.05 percent of loans and leases 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 10.6 percent
    • Tier 1 risk-based capital was 12.2 percent
    • Total capital was 14.7 percent
    • Leverage capital was 10.3 percent

EARNINGS HIGHLIGHTS




Change 3Q19 vs.

(dollars in millions, except per share data)

3Q19

2Q19

3Q18

2Q19

3Q18

Net income available to common shareholders

$

735


$

842


$

789


$

(107)


$

(54)


Diluted earnings per common share

0.95


1.09


1.01


(0.14)


(0.06)








Net interest income - taxable equivalent

$

1,723


$

1,714


$

1,714


$

9


$

9


Noninterest income

1,303


1,352


1,239


(49)


64


Total taxable-equivalent revenue

$

3,026


$

3,066


$

2,953


$

(40)


$

73


Less taxable-equivalent adjustment

23


24


27




Total revenue

$

3,003


$

3,042


$

2,926


















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