BB&T Scores 92% Earnings Growth (Update 1)
- BB&T reports first-quarter earnings per share of $61 cents.
- Analysts were expecting EPS of 59 cents.
- Mortgage banking revenue more than doubled year-over-year, to $216 million.
- Average commercial and industrial loan balances grow 2% during the fourth quarter.
Updated with comments from Jefferies analyst Ken Usdin.
The Winston-Salem, N.C., lender reported first-quarter net income available to common shareholders of $431 million, or 61 cents a share, increasing from $391 million, or 55 cents a share, during the fourth quarter, and $234 million, or 32 cents a share, during the first quarter of 2011.
|BB&T CEO Kelly S. King|
The first-quarter earnings came in ahead of the 59 cent EPS estimate among analysts polled by Thomson Reuters.
BB&T CEO Kelly King said the company's "very strong first quarter" was "driven by broad-based loan growth, strong noninterest income and lower expenses compared to last quarter," with "6% annualized growth in average loans in the first quarter, led by a 9% increase in C&I loans, a 20% increase in mortgage loans and a 15% increase in direct retail loans."
Average commercial and industrial loans totaled $36.0 billion during the first quarter, growing 2% from the previous quarter, and 8% year-over-year, while average residential loans grew 5% sequentially and 17% year-over-year, to $21.1 billion.
Average first-quarter total loans and leases -- excluding those acquired as part of failed-bank purchases and covered by Federal Deposit Insurance Corp. loss-sharing agreements --= grew 2% sequentially and 6% year-over-year, to $102.8 billion.
BB&T's first-quarter net interest margin was 3.93%, declining from 4.02% the previous quarter and 4.01% a year earlier, "largely due to the runoff of covered loans" acquired as part of failed-bank purchases.
The first-quarter return on average assets was 1.03%, compared to 0.93% in the fourth quarter, and 0.60% in the fourth quarter of 2011. BB&Ts first-quarter return on average common equity was 9.75%, compared to 8.76% the previous quarter, and 5.48% a year earlier.
B&T's shares closed at $31.28 Wednesday, returning 26% year-to-date, following a 2% decline during 2011.
The shares trade for 12 times the consensus 2013 EPS estimate of $2.94. The consensus 2012 EPS estimate is $2.58.
BB&T in March increased its quarterly dividend by four cents to 20 cents, and also announced "plans to redeem $3.2 billion of trust preferred securities beginning in 2012 without issuing any replacement capital."
The shares now have a dividend yield of 2.56%.
Jefferies analyst Ken Usdin rates BB&T a "Hold," with a $31 price target and said on Thursday that the company's first-quarter results looked "like a pretty clean beat" of earnings estimates, and that "core EPS could be as high as $0.71 if you exclude one-timers."