BB&T reports strong core results; Earnings reduced by mortgage and tax-related charges

BB&T reports strong core results; Earnings reduced by mortgage and tax-related 
WINSTON-SALEM, N.C., July 21, 2014 /CNW/ -- BB&T Corporation (NYSE: BBT) today 
reported second quarter 2014 net income available to common shareholders of 
$425 million, compared to $547 million earned in the second quarter of 2013. 
Earnings per diluted common share totaled $0.58 compared to $0.77 in the 
second quarter last year. The current quarter's results were reduced by 
mortgage and tax-related reserve adjustments with an after-tax impact that 
totaled $88 million, or $0.12 per diluted share. 
"While BB&T's results for the second quarter were negatively affected by 
mortgage and tax-related charges, our core results were strong, including 7% 
annualized growth in average loans and 12% annualized growth in average 
deposits during the quarter. In addition, revenue grew 3% annualized compared 
to last quarter and credit quality continued to improve," said Chairman and 
Chief Executive Officer Kelly S. King. 
"Average loan growth was robust in nearly all loan portfolios," said King. 
"Commercial lending was up across the board during the second quarter, with 
C&I up 10%, CRE - construction and development up 18%, and CRE - income 
producing properties up more than 3%. The sales finance portfolio increased 
26% during the quarter and the other lending subsidiaries portfolio was up 
12%, reflecting seasonally stronger demand. 
"Average deposits increased 12% on an annualized basis during the second 
quarter, and noninterest-bearing deposits were up 14%. Deposit mix has 
continued to improve, and the cost of interest-bearing deposits dropped one 
basis point. 
"Credit quality continued to improve in the second quarter," said King. 
"Nonperforming assets, excluding covered assets, declined 7%. Net loan 
charge-offs fell to 0.40% of average loans and leases, excluding covered 
loans, which is 35 basis points lower than the same period of 2013 and is at 
its lowest level in seven years. 
"We are also pleased to announce that BB&T completed the acquisition of 21 
retail branches in Texas during the second quarter. This acquisition makes 
BB&T a top 20 bank in the state of Texas and will allow us to accelerate the 
growth of our franchise in this large and fast growing market. BB&T acquired 
$1.2 billion in deposits and $112 million in loans in connection with this 
"Late in the second quarter, BB&T was notified that its FHA-insured loan 
origination process would be the subject of an audit survey by the Department 
of Housing and Urban Development. While there are no findings from HUD at this 
time, in light of announcements made by other financial institutions related 
to the outcomes of similar audits and related matters and after further review 
of our exposure, we believe it is prudent to establish reserves in accordance 
with GAAP," said King. "This has been an industry issue for many FHA 
originators, and we believe this is the appropriate course of action for BB&T." 
Second Quarter 2014 Performance Highlights 

    --  Average total loans and leases held for investment increased
        7.2% on an annualized basis compared to the first quarter of
        o Average C&I loans increased 10.0%
        o Average sales finance loans increased 25.5%
        o Average CRE - construction and development loans increased
        o Average loans in the other lending subsidiaries group
          increased 12.4%
        o Average CRE - income producing properties loans increased
        o Average direct retail loans increased approximately 8%
          adjusted for last quarter's QM transfer
    --  Taxable equivalent revenues were $2.3 billion for the second
        quarter, an annualized increase of 3.0% compared to the first
        o Net interest margin was 3.43%, down nine basis points
          compared with the prior quarter due to lower rates on new
          loans and securities, and covered loan runoff
        o Mortgage banking income was $12 million higher than the prior
          quarter driven by an increase in residential mortgage loan
          production and sales
        o Bankcard fees and merchant discounts increased $8 million to
          a record $70 million
    --  Average deposits increased $3.9 billion, or 12.4% annualized,
        compared to the prior quarter
        o Average noninterest-bearing deposits increased $1.2 billion,
          or 14.1%
        o Average interest-bearing deposit costs fell one basis point
          to 0.26%
        o Deposit mix continued to improve, with noninterest-bearing
          deposits representing 28.3% of total deposits compared to
          25.8% in the same period of last year
    --  Asset quality continued to improve
        o Nonperforming assets, excluding covered assets, decreased $70
          million, or 7.1%
        o Net charge-offs, excluding covered, were 0.40% of average
          loans for the quarter, the lowest level since 2007
        o The allowance for loan loss coverage ratio, excluding covered
          loans, increased to 1.78 times nonperforming loans held for
          investment in the second quarter compared to 1.70 times in
          the first quarter
    --  Capital levels remained strong across the board
        o Tier 1 common equity to risk-weighted assets was 10.2%
        o Tier 1 risk-based capital was 12.0%
        o Total capital was 14.3%
        o Basel III common equity tier 1 was 10.0%
        o Leverage capital remained strong at 9.5%
        o Tangible common equity to tangible assets was 7.7%

Earnings presentation and Quarterly Performance Summary

To listen to BB&T's live second quarter 2014 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 Replays of the conference call 
will be available by dialing 888-203-1112 (access code 4313363) until August 
21, 2014.

The presentation, including an appendix reconciling non-GAAP disclosures, is 
available at

BB&T's second quarter 2014 Quarterly Performance Summary, which contains 
detailed financial schedules, is available on BB&T's website at

About BB&T

As of June 30, 2014, BB&T is one of the largest financial services holding 
companies in the U.S. with $188 billion in assets and market capitalization of 
$28.4 billion. Based in Winston-Salem, N.C., the company operates 1,844 
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

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, Tier 1 common equity and related ratios
        are non-GAAP measures. The return on average risk-weighted
        assets is a non-GAAP measure. The Basel III common equity Tier
        I ratio reflects management's interpretation of the regulatory
        requirements, which is 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 from the numerator and denominator of these
        ratios. 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.
    --  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. 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. BB&T's management believes that the
        exclusion of the generally higher yielding assets acquired in
        the Colonial acquisition from the calculation of net interest
        margin provides investors with useful information related to
        the relative performance of the remainder of BB&T's earning
    --  Diluted EPS has been adjusted to exclude the impact of certain
        adjustments. BB&T's management believes these adjustments
        increase comparability of period-to-period results and uses
        these measures to assess performance and believes investors may
        find them useful in their analysis of the Corporation.
    --  Adjusted net charge-offs and the adjusted ratio of net
        charge-offs to average loans are non-GAAP measures that adjust
        net charge-offs to exclude the impact of a process change that
        resulted in accelerated recognition of charge-offs in the
        non-prime automobile lending portfolio during the quarter ended
        March 31, 2014. BB&T's management believes these adjustments
        increase comparability of period-to-period results and believes
        that investors may find them useful in their analysis of the

A reconciliation of these non-GAAP measures to the most directly comparable 
GAAP measure is included in BB&T's Second Quarter 2014 Quarterly Performance 
Summary, which is available on BB&T's website at

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 and the adverse effects of recessionary conditions in
    --  changes in the interest rate environment 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 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 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
    --  deposit attrition, customer loss and/or revenue loss following
        completed mergers and acquisitions may be greater than
    --  cyber-security risks, including "denial of service," "hacking"
        and "identity theft," could adversely affect our business and
        financial performance, or our reputation; and
    --  failure to implement part or all of the Company's new ERP
        system could result in impairment charges that adversely impact
        BB&T's financial condition and results of operations and could
        result in significant additional costs to BB&T.

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.

SOURCE  BB&T Corporation 
ANALYSTS: Alan Greer, Executive Vice President, Investor Relations, (336) 
733-3021; or Tamera Gjesdal, Senior Vice President, Investor Relations, (336) 
733-3058; or MEDIA: Cynthia Williams, Senior Executive Vice President, 
Corporate Communications, (336) 733-1478 
CO: BB&T Corporation
ST: North Carolina
-0- Jul/21/2014 09:45 GMT
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