BB&T reports revenue up 6.9% following acquisitions; Diluted EPS of $0.64 ($0.68 adjusted)

News provided by

BB&T Corporation

21 Jan, 2016, 10:45 GMT

WINSTON-SALEM, North Carolina, Jan. 21, 2016 /PRNewswire/ -- BB&T Corporation (NYSE: BBT) today reported quarterly earnings for the fourth quarter of 2015. Net income available to common shareholders was $502 million, or $0.64 per diluted common share for the fourth quarter of 2015. Excluding merger-related and restructuring charges, net income available to common shareholders was $535 million, or $0.68 per diluted share.

Net income available to common shareholders was $492 million ($0.64 per diluted share) and $551 million ($0.75 per diluted share) for the third quarter of 2015 and fourth quarter of 2014, respectively.

"We are pleased to report solid results for the quarter, driven by strong net interest income following our acquisition of Susquehanna Bancshares during the third quarter," said Chairman and Chief Executive Officer Kelly S. King. "Our fee income remained steady and our net interest income was up more than 12% from the fourth quarter of last year.

"Revenues were $2.6 billion, up $164 million compared to the fourth quarter of 2014, reflecting our strategic acquisitions during the year. Revenues for the year were $9.8 billion, up 4% over 2014, led by record fee income of $4.0 billion," said King. "With a strong balance sheet and cost reductions from acquisitions, I am looking forward to our continued success during 2016.

"After the successful conversion of Susquehanna's systems in the fourth quarter, we were pleased to receive approval from our federal and state banking regulators for our acquisition of National Penn, which is expected to close April 1st and significantly expand our presence in the mid-Atlantic region," said King.

Fourth Quarter 2015 Performance Highlights

  • Taxable equivalent revenues were $2.6 billion for the fourth quarter, up $68 million from the third quarter of 2015
    • Net interest income was up $41 million, primarily driven by a full quarter of Susquehanna activity
    • Net interest margin was 3.35%, flat compared to the prior quarter
    • Noninterest income was up $27 million primarily due to insurance income
    • Fee income ratio was 41.8%, compared to 42.1% for the prior quarter

  • Noninterest expense was $1.6 billion, essentially flat compared to the third quarter
    • Personnel expense and occupancy and equipment expense increased primarily due to the full quarter impact of Susquehanna's operations
    • Merger-related and restructuring charges were $27 million lower as Susquehanna related charges declined
    • The adjusted efficiency ratio was 58.8%, down from 59.2% in the prior quarter

  • Average loans and leases held for investment increased $4.3 billion compared to the third quarter of 2015; annualized growth of approximately 2.0% excluding acquisitions
    • Average C&I loans increased 13.5% annualized; or 7.8% excluding acquisitions
    • Average direct retail loans increased 38.8% annualized; or 11.2% excluding acquisitions
    • Average other lending subsidiaries loans increased 13.7% annualized; or 7.3% excluding acquisitions

  • Average deposits increased $4.7 billion compared to the prior quarter
    • Average noninterest-bearing deposits increased an annualized 15.0%; or 7.5% excluding acquisitions
    • Average interest-bearing deposit costs were 0.24%, flat compared to the prior quarter
    • Deposit mix remained strong, with average noninterest-bearing deposits representing 30.9% of total deposits, compared to 30.7% in the prior quarter

  • Asset quality remained strong
    • Nonperforming assets decreased $32 million during the quarter
    • Loans 90 days or more past due and still accruing were 0.23% of loans held for investment, compared to 0.28% in the prior quarter
    • Loans 30-89 days past due and still accruing were 0.76% of loans held for investment, compared to 0.67% in the prior quarter
    • The allowance for loan and lease losses was 1.07% of loans held for investment, compared to 1.08% in the prior quarter
    • The allowance for loan loss coverage ratio was 2.53 times nonperforming loans held for investment, versus 2.49 times in the prior quarter

  • Capital levels remained strong across the board
    • Common equity tier 1 to risk-weighted assets was 10.2%, or 10.0% on a fully phased-in basis
    • Tier 1 risk-based capital was 11.8%
    • Total capital was 14.2%
    • Leverage capital was 9.8%
    • Tangible common equity to tangible assets was 7.7%

Earnings presentation and Quarterly Performance Summary

To listen to BB&T's live fourth quarter 2015 earnings conference call at 8 a.m. (ET) today, please call 1-888-632-5009 and enter the participant code 5184622. A presentation will be used during the earnings conference call and is available on our website at www.bbt.com. 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 www.bbt.com.

BB&T's fourth quarter 2015 Quarterly Performance Summary, which contains detailed financial schedules, is available on BB&T's website at www.bbt.com.

About BB&T

As of December 31, 2015, BB&T is one of the largest financial services holding companies in the U.S. with $209.9 billion in assets and market capitalization of $29.5 billion. Based in Winston-Salem, N.C., the company operates 2,139 financial centers in 15 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 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.

Capital ratios are preliminary. Credit quality data excludes government guaranteed GNMA 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 related ratios are non-GAAP measures. The return on average risk-weighted assets is a non-GAAP measure. 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.
  • The ratio of loans greater than 90 days and still accruing interest as a percentage of loans held for investment has been adjusted to remove the impact of loans that are or were covered by FDIC loss sharing agreements and PCI loans. Management believes that their inclusion may result in distortion of these ratios such that they might not be comparable to other periods presented or to other portfolios that were not impacted by purchase accounting.
  • Adjusted fee income and adjusted 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. 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 enhance comparability of results with prior periods, as well as demonstrating the effects of significant gains and charges.
  • 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. This measure is useful for evaluating the performance of a business consistently, whether acquired or developed internally.
  • Core net interest margin is a non-GAAP measure that adjusts net interest margin to exclude the impact of interest income and funding costs associated with loans and securities acquired in the Colonial acquisition and purchased credit impaired ("PCI") loans acquired from Susquehanna. Core net interest margin is also adjusted to remove the purchase accounting marks and related amortization for non-PCI loans and deposits acquired from Susquehanna. BB&T's management believes that the adjustments to the calculation of net interest margin for certain assets and deposits acquired provide investors with useful information related to the performance of BB&T's earning assets.

A reconciliation of these non-GAAP measures to the most directly comparable GAAP measure is included in BB&T's Fourth Quarter 2015 Quarterly Performance Summary, which is available on BB&T's website at www.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 that are based on the beliefs and assumptions of the management of BB&T and the information available to management at the time that these disclosures were prepared. 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. Such factors include, but are not limited to, the following:

  • 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 credit and financial markets, either nationally or globally, including the impact of a downgrade of U.S. government obligations by one of the credit ratings agencies, the adverse effects of recessionary conditions in Europe and the impact of recent market disruptions in China;
  • changes in the interest rate environment, including interest rate changes made by the Federal Reserve, and cash flow reassessments may reduce NIM 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 and develop products that enable them to compete more successfully than BB&T and may be subject to different regulatory standards than BB&T;
  • natural or other disasters, including acts of domestic or foreign terrorism, could have an adverse effect on BB&T in that such events could materially disrupt BB&T's operations or the ability or willingness of BB&T's customers to access the financial services BB&T offers;
  • costs or difficulties related to the integration of the businesses of BB&T and its merger partners may be greater than expected;
  • expected cost savings or revenue growth associated with completed mergers and acquisitions may not be fully realized or realized within the expected time frames;
  • significant litigation could have a material adverse effect on BB&T;
  • deposit attrition, customer loss and/or revenue loss following completed mergers and acquisitions may be greater than expected;
  • cyber-security risks, including "denial of service," "hacking" and "identity theft," could adversely affect BB&T's business, financial performance, or reputation;
  • 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;
  • failure to execute on the Company's strategic or operational plans, including the ability to successfully complete and/or integrate mergers and acquisitions, could adversely impact BB&T's financial condition and results of operations; 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 conditions 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.

Related Links

http://www.bbt.com