BB&T reports record earnings of $599 million; 22% increase over third quarter of 2015

WINSTON-SALEM, N.C., Oct. 19, 2016

Net income available to common shareholders was $541 million ($0.66 per diluted share) for the second quarter of 2016 and $492 million ($0.64 per diluted share) for the third quarter of 2015.

"We are pleased to report record earnings for the third quarter," said Chairman and Chief Executive Officer Kelly S. King. "We achieved strong revenue growth and excellent expense control by capitalizing on our recent acquisitions.

"Taxable-equivalent revenues were $2.8 billion, up $325 million compared to the third quarter of 2015," said King. "For comparison, noninterest expense increased $117 million over the same period, highlighting the strong leverage we achieved with our acquisitions.

"We also completed several strategic actions during the quarter," said King. "We terminated our loss sharing agreements with the FDIC, settled certain matters related to FHA-insured mortgage loans, made a $50 million charitable contribution and completed $160 million of share repurchases. While these actions did not have a significant net impact on our quarterly results, they will reduce ongoing costs and complexity and position us to provide greater returns for our shareholders."

Third Quarter 2016 Performance Highlights

• Taxable-equivalent revenues were $2.8 billion for the third quarter, up $27 million from the second quarter of 2016
  • Net interest income on a taxable-equivalent basis was down $7 million
  • Net interest margin was 3.39%, down two basis points
  • Noninterest income was up $34 million
  • Fee income ratio was 41.9%, compared to 41.2% for the prior quarter
    
     
• Noninterest expense was $1.7 billion, down $86 million compared to the second quarter of 2016
  • Personnel expense decreased $33 million primarily due to lower production-based incentives and employee benefits
  • Merger-related and restructuring charges were $49 million lower as the National Penn and Swett & Crawford acquisitions occurred at the start of the prior quarter
  • GAAP efficiency ratio was 61.7%, compared to 65.4% for the prior quarter. Adjusted efficiency ratio was 58.7%, compared to 59.6% for the prior quarter
    
     
• Average loans and leases held for investment were $141.3 billion compared to $141.1 billion for the second quarter of 2016
  • Average other lending subsidiaries loans increased $781 million, or 22.3% annualized
  • Average CRE-construction and development loans increased $133 million, or 14.4% annualized
  • Average sales finance loans declined $331 million, or 13.6% annualized
    
     
• Average deposits were $159.5 billion compared to $160.3 billion for the prior quarter
  • Average noninterest-bearing deposits increased $1.8 billion, or 14.3% annualized
  • Average interest-bearing deposit costs were 0.23%, flat compared to the prior quarter
  • Deposit mix remained strong, with average noninterest-bearing deposits representing 31.7% of total deposits, compared to 30.4% in the prior quarter
    
     
• Asset quality remained strong
  • Loans 90 days or more past due and still accruing were 0.42% of loans held for investment, compared to 0.43% in the prior quarter
  • Loans 30-89 days past due and still accruing were 0.69% of loans held for investment, compared to 0.64% in the prior quarter
  • The allowance for loan and lease losses was 1.06% of loans held for investment, flat compared to the prior quarter, which includes the impact of a shared national credit review
  • Nonperforming assets decreased $43 million, driven by reductions in commercial and industrial nonperforming loans
  • The allowance for loan loss coverage ratio was 2.00 times nonperforming loans held for investment, versus 1.90 times in the prior quarter
    
     
• Capital levels remained strong across the board
  • Common equity tier 1 to risk-weighted assets was 10.1%, or 9.9% on a fully phased-in basis
  • Tier 1 risk-based capital was 11.8%
  • Total capital was 14.0%
  • Leverage capital was 9.8%