Financial services holding company BB&T Corp. (BBT) Thursday reported about 28 percent rise in third-quarter profit, benefited by higher revenues and mortgage banking income. Net interest income grew, mainly driven by a decline in funding costs. Earnings per share missed Wall Street estimates, while revenues were slightly above view.
Kelly King, chairman and chief executive officer of the company stated, "BB&T's performance benefited from a 5.3% annualized increase in net interest income compared to the last quarter, a 63% increase in mortgage banking income and continued improvement in credit costs. The net interest margin remained strong at 3.94%."
Residential Mortgage Banking net income was $83 million, an increase of $66 million over the third quarter of 2011. Community Banking reported net income of $250 million, up $72 million from last year.
In the third quarter, the company's net income available to common shareholders increased 28.1 percent to $469 million from $366 million in the previous year. On a per share basis, earnings were $0.66, higher than $0.52 per share in the year-ago quarter.
On average, 35 analysts polled by Thomson Reuters expected earnings per share of $0.71 for the quarter. Analysts' estimates typically exclude one-time items.
The company said its recent-quarter earnings were reduced by merger-related charges of $0.04 per share, associated with acquisition of BankAtlantic.
Total revenues grew to $2.48 billion from $2.14 billion a year earlier. Analysts estimated revenues of $2.45 billion for the quarter. The increase in total revenues included $66 million of higher taxable-equivalent net interest income, which was primarily driven by a 28.7 percent decline in funding costs.
Net interest income-taxable equivalent increased to $1.52 billion from $1.45 billion a year earlier. Non-interest income was $963 million, up from $690 million last year.
Net interest margin - taxable equivalent was 3.94 percent, compared to 4.09 percent in the prior, reflecting lower yields on new loans and securities.
Provision for credit losses, excluding covered loans, were $244 million, compared to $243 million in the prior-year quarter.
Total loans and leases held for investment increased to $112.72 million from $103.88 million a year earlier. Total deposits also grew 11.9 percent to $128.7 billion.
As at September 30, BB&T's Tier 1 common capital ratio, under the currently proposed Basel III capital standards, was estimated to be 8 percent, compared to 8.2 at June 30, 2012.
BBT closed Wednesday's regular trading at $32.27 on the NYSE. In the pre-market activity, the shares are down 1.61 percent.
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