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BB&T Earnings Drop in Q1

cutting-moneyBB&T Corp.’s profits are down for the first quarter of 2015, dropping 1.6 percent since Q1 last year, according to a recently released earnings report.

The company posted a net income of $488 million for the quarter, down from $496 million a year ago. Earnings per share came in at 67 cents, compared to 68 cents per share in Q1 of 2014.

Despite the notable drop, according to Kelly S. King, chairman and CEO of BB&T, the dip in profits doesn’t send up any alarms for the company.

"Given the challenges of the current rate environment, I am pleased with our financial performance and other accomplishments during the quarter," King said. "We enjoyed solid loan growth, good expense control in a seasonally challenging quarter and outstanding credit quality.

But while earnings dropped, mortgage-banking income and actual revenues for BB&T both increased. Since Q1 last year, mortgage-banking income rose by 48.6 percent, and total revenues for the company jumped by 1.5 percent, or $34 million, coming in at $2.3 billion total.

“These results were driven by continued strength in our fee-based businesses, with insurance achieving a record quarter,” King said. “Excluding residential mortgage loans, average loans grew 5.4% compared to last quarter, and our credit metrics improved across the board.”

Despite improved revenues, BB&T still failed to meet the expectations of analysts. According to the Wall Street Journal, Thomson Reuters said analysts projected the company would reach revenues of $2.4 billion and 70 cents per share for the quarter.

In addition to falling profits, income on loan interest also decreased, dropping by 2.6 percent in the first quarter. According to the Wall Street Journal, BB&T CFO Daryl Bible expects these numbers to recover over the next year, as the company acquires both Bank of Kentucky Financial Corp. and Susquehanna Bancshares Inc.

“Both opportunities are fantastic, and at this point we feel more excited about them than the day we announced,” Bible told the Wall Street Journal

BB&T also recently acquired 41 branches in Texas, increased its partnership interest in AmRisc and sold its subsidiary American Coastal Insurance Company.

Other notable items in this week’s earnings report included in a significant increase in noninterest expenses (from $28 million to $1.4 billion), a 2.4 percent drop in average deposits and a slight jump in the company’s adjusted efficiency ratio from 58.2 to 58.5 percent.

About Author: Aly J. Yale

Aly J. Yale is a freelance writer and editor based in Fort Worth, Texas. She has worked for various newspapers, magazines, and publications across the nation, including The Dallas Morning News and Addison Magazine. She has also worked with both the Five Star Institute and REO Red Book, as well as various other mortgage industry clients on content strategy, blogging, marketing, and more.

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