BB&T reports 28% increase in quarterly earnings; EPS totals $0.66, up 27%; EPS reduced by $0.04 of merger-related costs

WINSTON-SALEM, North Carolina, Oct. 18, 2012 /PRNewswire/ -- BB&T Corporation (NYSE: BBT) today reported third quarter net income available to common shareholders of $469 million, an increase of 28% compared to $366 million reported in the third quarter of 2011. Earnings per diluted common share totaled $0.66, an increase of 27% compared to $0.52 earned in the third quarter of last year. Third quarter earnings were reduced by merger-related charges associated with the acquisition of BankAtlantic totaling $43 million pretax, or $0.04 per diluted common share.

For the first nine months of 2012, BB&T reported net income available to common shareholders of $1.4 billion, an increase of 57% compared to the first nine months of last year. Earnings per diluted common share totaled $1.99 for the first nine months of 2012, an increase of 57% compared to 2011.

"We are pleased to report very strong results for the third quarter," said Chairman and Chief Executive Officer Kelly S. King. "BB&T's performance benefited from a 5.3% annualized increase in net interest income compared to the last quarter, a 63% increase in mortgage banking income and continued improvement in credit costs. The net interest margin remained strong at 3.94%.

"Loan growth improved during the quarter as average loans held for investment increased 12.6% on an annualized basis compared to the second quarter including the impact of the BankAtlantic acquisition. Organic loan growth was also strong as average loans increased 8.4% compared to last quarter on an annualized basis. This growth was led by our other lending subsidiaries, residential mortgage loans, C&I loans and sales finance loans.

"We are also very pleased with our overall deposit growth and have moved up to 9th nationwide according to recently released FDIC data," King said. "BB&T gained market share in North Carolina; Georgia, where our rank improved to 4th from 5th; West Virginia; Kentucky; Tennessee and Texas. We maintained our rank in the other states in our footprint. Including BankAtlantic, average deposits increased 11% and noninterest-bearing deposits increased 34% on an annualized basis.

"BB&T also produced broad-based improvement in credit," King said. "Nonperforming assets declined 9.4% compared to last quarter. This improvement includes a 37% reduction in foreclosed real estate to the lowest level in five years. Net charge-offs, excluding covered loans, were 1.08%, the lowest level in four years."

Third Quarter 2012 Performance Highlights

• Average total loans and leases held for investment increased 12.6% on an annualized basis compared to the second quarter of 2012 (8.4% excluding BankAtlantic)
  • Average C&I loans increased 13.4%
  • Average other CRE loans increased 9.2%
  • Average direct retail loans increased 11.9%
  • Average residential mortgage loans increased 24.6%
  • Average sales finance loans increased 5.1%
  • Average revolving credit loans increased 10.2%
  • Average loans in the other lending subsidiaries group increased 26.7%
  • Average residential ADC loans declined 47.9%
• Revenues increased due to strong mortgage results despite insurance seasonality
  • Net revenues were $2.5 billion for the third quarter, adjusted for securities gains and losses and the offsets for provisions related to covered assets, up an annualized 4.4%
• Net interest income totaled $1.5 billion for the third quarter, an annualized increase of 5.7% compared to the second quarter of 2012
  • The increase was driven by a 4.0% annualized increase in average earning assets
• Average deposits increased $3.3 billion, or 10.6% on an annualized linked quarter basis (3.3% excluding BankAtlantic)
  • Average noninterest-bearing deposits increased $2.3 billion, or 33.8%
  • Average interest-bearing deposit costs fell to 0.42% this quarter compared to 0.44% in the second quarter of 2012
• Asset quality measures improved significantly
  • Nonperforming assets decreased $179 million, or 9.4% excluding covered assets
  • As a percentage of total assets, nonperforming assets, excluding covered assets, decreased from 1.09% last quarter to 0.97%
  • Foreclosed real estate, excluding covered assets, declined $82 million, or 37.1% to the lowest level in five years
  • Net charge-offs, excluding covered assets, totaled 1.08% of average loans for the quarter.
  • Foreclosed property expense totaled $54 million, down 25.0% from the second quarter of 2012
• Capital levels remained strong following the acquisition of BankAtlantic
  • Tangible common equity was 6.8%
  • Tier 1 common equity was 9.5%
  • Tier 1 risk-based capital was 10.9%
  • Leverage capital was 7.9%
  • Total capital was 14.0%

Earnings webcast, presentation and Quarterly Performance Summary

To hear a live webcast of BB&T's third quarter 2012 earnings conference call at 8 a.m. (ET) today, visit our website at www.BBT.com or www.media-server.com/m/p/58rb9om9. A presentation will be used during the earnings conference call and is available on our website. Replays of the conference call will be available on the BB&T website until Friday, November 2, 2012 or by dialing +1-888-203-1112 (access code 4313363) until October 23, 2012.

To access the webcast and presentation, including an appendix reconciling non-GAAP disclosures, go to www.BBT.com and click on "About BB&T" and proceed to "Investor Relations" or go to www.sec.gov. The webcast link can be found under "Webcasts" and the presentation can be found under "View Recent Presentations."

BB&T's Third Quarter 2012 Quarterly Performance Summary, which contains detailed financial schedules, is available on BB&T's website at www.BBT.com/financials.html.

About BB&T

As of September 30, 2012, BB&T is one of the largest financial services holding companies in the U.S. with $182.0 billion in assets and market capitalization of $23.2 billion. Based in Winston-Salem, N.C., the company operates approximately 1,850 financial centers in 12 states and Washington, D.C., and offers a full range of consumer and commercial banking, securities brokerage, asset management, mortgage and insurance products and services. A Fortune 500 company, BB&T is consistently recognized for outstanding client satisfaction by J.D. Power and Associates, the U.S. Small Business Administration, Greenwich Associates and others. More information about BB&T and its full line of products and services is available at www.BBT.com.

Current quarter capital ratios are preliminary. Credit quality data excludes covered and government guaranteed loans where applicable.

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 that these non-GAAP measures provide a greater understanding of ongoing operations and enhance comparability of results with prior periods as well as demonstrating the effects of significant gains and charges in the current period. The company believes that a meaningful analysis of its financial performance requires an understanding of the factors underlying that performance. BB&T's management believes that investors may use these non-GAAP financial measures to analyze financial performance without the impact of unusual items that may obscure trends in the company's underlying performance. 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 Tier 1 common equity ratios are non-GAAP measures. BB&T uses the Tier 1 common equity definition used in the SCAP assessment to calculate these ratios. The Basel III Tier I common equity ratio is also a non-GAAP measure and reflects management's best estimate of the proposed regulatory requirements, which are subject to change. BB&T's management uses these measures to assess the quality of capital and believes that investors may find them useful in their analysis of the Corporation.
• Asset quality ratios have been adjusted to remove the impact of acquired loans and foreclosed property covered by FDIC loss sharing agreements as management believes their inclusion results in distortion of those ratios and may not be comparable to other periods presented or to other portfolios that were not impacted by purchase accounting.
• Fee income and efficiency ratios are non-GAAP in that they exclude securities gains (losses), foreclosed property expense, amortization of intangible assets, merger-related and restructuring charges, the impact of FDIC loss share accounting and other selected items.
• Return on average tangible common shareholders' equity is a non-GAAP measure that calculates the return on average common shareholders' equity without the impact of intangible assets and their related amortization.

A reconciliation of these non-GAAP measures to the most directly comparable GAAP measure is included on the Investor Relations section of BB&T's website and in BB&T's Third Quarter 2012 Quarterly Performance Summary, which is available on BB&T's website at www.BBT.com/financials.html.

This news release contains certain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. These statements may address issues that involve significant risks, uncertainties, estimates and assumptions made by management. Actual results may differ materially from current projections. Please refer to BB&T's filings with the Securities and Exchange Commission for a summary of important factors that may affect BB&T's forward-looking statements. BB&T undertakes no obligation to revise these statements following the date of this news release.