BB&T Profits Lifted by Higher Interest Rates
April 21 2016 - 6:17AM
Dow Jones News
By Austen Hufford
BB&T Corp. said profit in its latest quarter increased 8%,
helped by higher interest rates and despite setting aside more
money to cover potential loan losses stemming from energy.
Earnings results beat Wall Street expectations.
The Winston-Salem, N.C.-based lender reported earnings of $527
million, up from $488 million a year earlier. Per-share profit was
flat at 67 cents as the number of shares outstanding grew 8.2%.
Excluding certain items, earnings per share were 69 cents. Revenue
grew 10% to $2.58 billion.
Analysts polled by Thomson Reuters projected adjusted profit of
64 cents a share on $2.58 billion in revenue.
The regional bank has been making a string of recent deals.
Earlier this month, it closed its $1.8 billion purchase of
Pennsylvania-based National Penn Bancshares Inc. as well as a $500
million deal to acquire U.S. wholesale insurance broker Swett &
Crawford.
Net interest income rose to $1.57 billion from $1.35 billion a
year earlier. Net interest margin, a key profitability measure,
rose from a year earlier. That gauge, which is closely tied to
interest rates, came in at 3.43%, up from 3.33% in the same quarter
last year and from the 3.35% in the previous quarter. The company
cited the increase in interest rates and stable deposit costs.
Revenue from fees increased 1.9% to $1.02 billion as the bank
saw securities gains and better FDIC loss share, which offset
declines in income insurance income and mortgage banking income.
Expenses, meanwhile, increased 8.6% because of a jump in
merger-related expenses.
A higher provision for potential loan losses also bit into the
bottom line. BB&T set aside $182 million for credit losses, up
from $105 million a year earlier.
Some lenders have been increasing loan loss reserves as the
sharp decline in energy prices threatens related loans. The current
quarter's provision included about $28 million in excess of
charge-offs related to energy and $30 million of energy-related
charge-offs.
Shares in the company, up 11% in the past three months, were
inactive in premarket trading.
Write to Austen Hufford at austen.hufford@wsj.com
(END) Dow Jones Newswires
April 21, 2016 07:02 ET (11:02 GMT)
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