BB&T reports record earnings for 2016; Quarterly earnings totaled $592 million, up 18% over 2015

WINSTON-SALEM, North Carolina, Jan. 19, 2017 /PRNewswire/ -- BB&T Corporation (NYSE: BBT) today reported earnings for the fourth quarter of 2016. Net income available to common shareholders was $592 million, up 17.9% from the fourth quarter of 2015. Earnings per diluted common share were $0.72 for the fourth quarter of 2016. Excluding pre-tax merger-related and restructuring charges of $13 million ($8 million after tax), net income available to common shareholders was $600 million, or $0.73 per diluted share.

Net income available to common shareholders was $599 million ($0.73 per diluted share) for the third quarter of 2016 and $502 million ($0.64 per diluted share) for the fourth quarter of 2015.

For the full year, net income available to common shareholders was a record $2.3 billion, up 16.7% from 2015. Earnings per diluted share totaled $2.77 compared to $2.56 for 2015.

"We are pleased to report strong earnings for the fourth quarter," said Chairman and Chief Executive Officer Kelly S. King. "While higher interest rates created $34 million in pre-tax charges, revenue growth was strong, expense control was solid and we are well-positioned for future interest rate increases.

"Taxable-equivalent revenues were $2.8 billion, up 8.3% compared to the fourth quarter of 2015," King said. "Noninterest expense increased only 4.4% over the same period, reflecting strong leverage from acquisitions and excellent control of operating costs. Full year revenues were a record $11.0 billion, up 12.3% from 2015, and net income available to common shareholders of $2.3 billion was also a record.

"During the quarter, we repurchased 7.5 million shares through both open-market purchases and an accelerated share repurchase program. These transactions were approved by our board as part of our commitment to ensuring an optimal return for our shareholders.

"Earlier this month, we terminated $2.9 billion of higher-cost FHLB advances, resulting in a loss on early extinguishment of $392 million. This strategic action will lower our future borrowing costs and provide a boost to future margins and earnings."

Fourth Quarter 2016 Performance Highlights

• Taxable-equivalent revenues were $2.8 billion for the fourth quarter, down $46 million from the third quarter of 2016
  • Net interest income on a taxable-equivalent basis was down $44 million
  • Net interest margin was 3.32%, down seven basis points
  • Noninterest income was essentially flat
  • Fee income ratio was 42.6%, compared to 41.9% for the prior quarter

• Noninterest expense was $1.7 billion, down $43 million compared to the third quarter of 2016
  • Personnel expense was essentially flat
  • Loan-related expense included a $31 million release of mortgage repurchase reserves
  • Merger-related and restructuring charges decreased $30 million
  • GAAP efficiency ratio was 61.1%, compared to 61.7% for the prior quarter. Adjusted efficiency ratio was 59.5%, compared to 58.7% for the prior quarter

• Average loans and leases held for investment were $142.3 billion compared to $141.3 billion for the third quarter of 2016
  • Average sales finance loans increased $1.3 billion, or 53.7% annualized, primarily due to portfolio purchases in the third and fourth quarters
  • Average other lending subsidiaries loans increased $213 million, or 5.7% annualized
  • Average residential mortgage loans decreased $313 million, or 4.1% annualized

• Average deposits were $160.1 billion compared to $159.5 billion for the prior quarter
  • Average noninterest-bearing deposits increased $862 million, or 6.8% annualized
  • Average interest-checking deposits increased $880 million, or 12.6% annualized
  • Average interest-bearing deposit costs were 0.22%, down one basis point compared to the prior quarter
  • Deposit mix remained strong, with average noninterest-bearing deposits representing 32.1% of total deposits, compared to 31.7% in the prior quarter

• Asset quality remained strong
  • Nonperforming assets decreased $30 million, driven by reductions in commercial and industrial nonperforming loans
  • Loans 90 days or more past due and still accruing were 0.44% of loans held for investment, compared to 0.42% in the prior quarter
  • Loans 30-89 days past due and still accruing were 0.75% of loans held for investment, compared to 0.69% in the prior quarter
  • The allowance for loan loss coverage ratio was 2.03 times nonperforming loans held for investment, versus 2.00 times in the prior quarter
  • The allowance for loan and lease losses was 1.04% of loans held for investment, down two basis points from 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 12.0%
  • Total capital was 14.1%
  • Leverage capital was 10.0%

Earnings presentation and Quarterly Performance Summary