WINSTON-SALEM, N.C., July 17 /PRNewswire-FirstCall/ -- BB&T Corporation
(NYSE: BBT) reported today net income for the second quarter of 2008
totaling $428 million, or $.78 per diluted share, compared with $458
million, or $.83 per diluted share, earned during the second quarter of
2007. These results reflect decreases of 6.6% and 6.0%, respectively,
compared to the same quarter last year.
BB&T's second quarter net income produced annualized returns on average
assets and average shareholders' equity of 1.27% and 13.27%, respectively,
compared to prior year returns of 1.47% and 15.18%, respectively.
Operating earnings for the second quarter of 2008 totaled $377 million,
or $.69 per diluted share, excluding a $30 million after-tax gain from the
sale of Visa stock, a $22 million after-tax gain from an extinguishment of
debt and $1 million in net after-tax merger-related and restructuring
charges. Operating earnings for the second quarter of 2007 totaled $461
million, or $.83 per diluted share, excluding $3 million in net after-tax
merger-related and restructuring charges.
GAAP and operating results include a $330 million provision for credit
losses. The provision exceeded net charge-offs by $160 million and resulted
in an increase in the allowance for loan and lease losses as a percentage
of loans and leases held for investment to 1.33%.
Cash basis operating results exclude the unamortized balances of
intangibles from assets and shareholders' equity and exclude the
amortization of intangibles, the net amortization of purchase accounting
mark-to-market adjustments, merger-related and restructuring charges or
credits and nonrecurring items from earnings. Cash basis operating earnings
totaled $392 million for the second quarter of 2008 compared to $477
million earned in the second quarter of 2007. Cash basis operating diluted
earnings per share totaled $.71 for the second quarter of 2008 compared to
$.86 earned during the same period in 2007. Cash basis operating earnings
for the second quarter of 2008 produced annualized returns on average
tangible assets and average tangible shareholders' equity of 1.22% and
21.44%, respectively, compared to prior year returns of 1.61% and 28.48%,
respectively.
"While we continue to be affected by the challenges of the current
credit cycle, the encouraging news is that our core operations are
producing solid results," said Chairman and Chief Executive Officer John A.
Allison. "Nonperforming assets and net charge-offs continued to increase
during the quarter, as did the provision for credit losses. We remain
focused on client service and are partnering with our clients to prudently
work through the challenging economic environment. In addition, we are
working to aggressively deal with problem assets, and believe our credit
issues are manageable.
"Revenue growth was solid during the quarter, driven primarily by an
increase in net interest income and an improvement in our net interest
margin to 3.65%. Also, we enjoyed healthy loan growth and improved
noninterest income as many of our fee income businesses turned in strong
performances this quarter. Finally, we were very pleased to increase the
quarterly cash dividend, extending a long history of dividend increases.
Despite the numerous challenges being faced by the financial services
industry, BB&T is stable, financially sound and has healthy capital
levels."
For the first six months of 2008, BB&T's net income was $856 million
compared to $879 million earned in the first six months of 2007, a decrease
of 2.6%. Diluted earnings per share for the first half of 2008 totaled
$1.56 compared to $1.60 earned during the same period in 2007. Excluding
merger- related and restructuring charges or credits and nonrecurring
items, operating earnings for the first half of 2008 totaled $778 million,
or $1.42 per diluted share, compared to $886 million, or $1.61 per diluted
share, earned during the first six months of 2007.
Nonperforming Assets and Credit Losses Increase
BB&T's nonperforming asset levels and credit losses increased further
in the second quarter of 2008 compared to the first quarter of 2008.
Nonperforming assets, as a percentage of total assets, increased to .95% at
June 30, compared to .73% at March 31 and .33% at June 30, 2007. Annualized
net charge-offs were .72% of average loans and leases for the second
quarter of 2008, up from .54% in the first quarter of 2008 and .35% in the
second quarter of 2007. Excluding losses incurred by BB&T's specialized
lending subsidiaries, annualized net charge-offs for the current quarter
were .53% of average loans and leases compared to .32% in the first quarter
of 2008 and .20% in the second quarter of 2007.
The provision for credit losses totaled $330 million in the second
quarter of 2008, an increase of $242 million compared to the same quarter
last year, and exceeded net charge-offs by $160 million in the current
quarter. The increases in net charge-offs, nonperforming assets and the
provision for credit losses were largely driven by continued challenges in
residential real estate markets with the largest concentration of credit
issues occurring in Georgia, Florida and metro Washington, D.C.
Net interest margin improves to 3.65%
BB&T's fully taxable equivalent net interest income totaled $1.1
billion for the second quarter, an increase of 10.7% compared to the same
quarter of 2007. The net interest margin was 3.65% for the current quarter,
up 11 basis points from 3.54% for the first quarter of 2008. The increase
marks the third consecutive quarter that BB&T's margin has improved.
Management currently anticipates some continued expansion of the net
interest margin for the remainder of the year.
BB&T's Fee-Based Businesses Produce Solid Quarterly Growth Rates
On an operating basis, noninterest income increased $51 million, or
7.0%, during the second quarter of 2008 compared to 2007. These increases
include higher revenues generated by BB&T's insurance operations, service
charges on deposit accounts and other nondeposit fees and commissions as
well as a solid performance from BB&T's mortgage banking operations.
Income from BB&T's insurance operations increased 3.5% to a record $237
million in the current quarter compared with $229 million earned during the
second quarter last year. This increase was primarily the result of new
product initiatives that were introduced during the second half of 2007.
Service charges on deposit accounts totaled $172 million for the second
quarter of 2008, an increase of 13.9% compared to $151 million earned in
the same quarter last year. This increase was primarily attributable to
growth in revenues from overdraft items.
Other nondeposit fees and commissions totaled $139 million for the
second quarter of 2008, an increase of 9.4% compared to the second quarter
of 2007. This increase was generated primarily by growth in bankcard income
and debit card related services.
Revenues from mortgage banking operations totaled $57 million for the
second quarter of 2008, an increase of $26 million, or 83.9%, compared to
the second quarter of 2007. This increase reflects the adoption of fair
value accounting standards and the net change in the mortgage servicing
rights valuation. Fair value accounting increased mortgage banking income
by $19 million, and also resulted in a $16 million increase in personnel
expense during the quarter. The net change in the valuation of mortgage
servicing rights resulted in a $5 million decline compared to the second
quarter of 2007. Excluding the impact of these items, mortgage banking
income increased $12 million, or 37.5%, compared to the same period last
year. The growth in mortgage is primarily due to increased income from loan
servicing.
Other noninterest income, on an operating basis, totaled $39 million
for the second quarter of 2008 compared to $61 million earned in the same
quarter last year, a decrease of 36.1%. The adoption of fair value
accounting standards resulted in a decline of $6 million in other income.
In addition, net revenues from BB&T's venture capital investments declined
$15 million, and earnings from investments in low income housing
partnerships that generate tax benefits declined $13 million compared to
the second quarter of 2007.
Loan Growth Remains Healthy - Up 9.1%
Average loans and leases totaled $94.9 billion for the second quarter
of 2008, reflecting an increase of $7.9 billion, or 9.1%, compared to the
second quarter of 2007. This increase was composed of growth in average
commercial loans and leases, which increased $5.2 billion, or 12.3%;
average mortgage loans, which increased $1.7 billion, or 9.7%; average
sales finance loans, which increased $365 million, or 6.3%; average
revolving credit loans, which increased $211 million, or 14.9%; average
direct retail loans, which increased $146 million, or 0.9%; and growth in
average loans originated by BB&T's specialized lending subsidiaries, which
increased $371 million, or 7.3%, compared to the second quarter last year.
BB&T Increases Quarterly Cash Dividend; Capital Levels Remain Strong
On June 24, BB&T's Board of Directors approved a 2.2% increase in the
quarterly cash dividend paid to shareholders. The increase, to $.47 per
share, marks the 37th consecutive year that BB&T has raised its cash
dividend to shareholders. BB&T has paid a cash dividend to shareholders
every year since 1903. The 10-year compound growth rate for BB&T's
quarterly dividend payment is 10.4%. This excellent dividend paying history
has gained BB&T recognition as a Mergent Dividend Achiever and a Standard
and Poor's Dividend Aristocrat.
BB&T's tangible and regulatory capital levels remained healthy at June
30. BB&T's tangible capital ratio was 5.7% at June 30, and the Tier 1
leverage ratio was 7.2%. In addition, BB&T's Tier 1 risk-based capital and
total risk- based capital ratios were 8.9% and 14.1%, respectively. BB&T's
risk-based capital ratios are significantly higher than an average of its
peers, and remain well above regulatory standards for well-capitalized
banks.
BB&T Continues to Expand Insurance Business
On June 2, BB&T Insurance Services continued its expansion with the
acquisition of UnionBanc Insurance Services Inc. of San Diego, Ca. This
acquisition will strengthen BB&T's overall investment in insurance on the
West Coast.
At June 30, BB&T had $136.5 billion in assets and operated 1,489
banking offices in the Carolinas, Virginia, West Virginia, Kentucky,
Georgia, Maryland, Tennessee, Florida, Alabama, Indiana and Washington,
D.C. BB&T's common stock is traded on the New York Stock Exchange under the
trading symbol BBT. The closing price of BB&T's common stock on July 16 was
$24.50 per share.
For additional information about BB&T's financial performance, company
news, products and services, please visit our Web site at
http://www.BBT.com.
Earnings Webcast
To hear a live webcast of BB&T's second quarter 2008 earnings
conference call at 11:00 a.m. (EDT) today, please visit our Web site at
http://www.BBT.com. Replays of the conference call will be available
through our Web site until 5 p.m. (EDT) on Friday, Aug. 1.
Risk-based capital ratios are preliminary.
This press release contains financial information 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.
Non-GAAP measures typically adjust GAAP performance measures to exclude the
effects of charges, expenses and gains related to the consummation of
mergers and acquisitions, and costs related to the integration of merged
entities, as well as the amortization of intangibles and purchase
accounting mark-to-market adjustments in the case of "cash basis"
performance measures. These non-GAAP measures may also exclude other
significant gains, losses or expenses that are unusual in nature and not
expected to recur. Since these items and their impact on BB&T's performance
are difficult to predict, management believes presentations of financial
measures excluding the impact of these items provide useful supplemental
information that is important for a proper understanding of the operating
results of BB&T's core businesses. These disclosures should not be viewed
as a substitute for operating results determined in accordance with GAAP,
nor are they necessarily comparable to non-GAAP performance measures that
may be presented by other companies.
This press release contains certain forward-looking statements as
defined in the Private Securities Litigation Reform Act of 1995. These
statements may address issues that involve significant risks,
uncertainties, estimates and assumptions made by management. Actual results
may differ materially from current projections. Please refer to BB&T's
filings with the Securities and Exchange Commission for a summary of
important factors that may affect BB&T's forward-looking statements. BB&T
undertakes no obligation to revise these statements following the date of
this press release.
QUARTERLY PERFORMANCE SUMMARY
BB&T Corporation (NYSE: BBT)
(Dollars in millions, except per
share data)
For the Three Months Percent
Ended Increase
6/30/08 6/30/07 (Decrease)
OPERATING EARNINGS STATEMENTS (1)
Interest income - taxable equivalent $1,817 $1,980 (8.2)%
Interest expense 727 995 (26.9)
Net interest income - taxable
equivalent 1,090 985 10.7
Less: Taxable equivalent adjustment 22 19 15.8
Net interest income 1,068 966 10.6
Provision for credit losses 330 88 275.0
Net interest income after provision
for credit losses 738 878 (15.9)
Noninterest income 780 729 7.0
Noninterest expense 997 918 8.6
Operating earnings before income
taxes 521 689 (24.4)
Provision for income taxes 144 228 (36.8)
Operating earnings (1) $377 $461 (18.2)%
PER SHARE DATA BASED ON OPERATING
EARNINGS (1)
Basic Earnings $.69 $.84 (17.9)%
Diluted Earnings .69 .83 (16.9)
Weighted average shares (in
thousands) -
Basic 546,628 548,385
Diluted 549,758 553,935
Dividends paid per share $.46 $.42 9.5%
PERFORMANCE RATIOS BASED ON OPERATING
EARNINGS (1)
Return on average assets 1.12% 1.48%
Return on average equity 11.69 15.28
Net yield on earning assets (taxable
equivalent) 3.65 3.55
Noninterest income as a percentage of
total income (taxable equivalent) (2) 41.6 42.6
Efficiency ratio (taxable
equivalent) (2) 52.5 53.2
CASH BASIS PERFORMANCE BASED ON
OPERATING EARNINGS (1)(3)
Cash basis operating earnings $392 $477 (17.8)%
Diluted earnings per share .71 .86 (17.4)
Return on average tangible assets 1.22% 1.61%
Return on average tangible equity 21.44 28.48
Efficiency ratio (taxable
equivalent) (2) 51.2 51.7
QUARTERLY PERFORMANCE SUMMARY
BB&T Corporation (NYSE: BBT)
(Dollars in millions, except per share data)
For the Three Months Percent
Ended Increase
6/30/08 6/30/07 (Decrease)
INCOME STATEMENTS
Interest Income $1,790 $1,961 (8.7)%
Interest Expense 722 995 (27.4)
Net interest income 1,068 966 10.6
Provision for credit losses 330 88 275.0
Net interest income after provision
for credit losses 738 878 (15.9)
Noninterest income 827 729 13.4
Noninterest expense 962 923 4.2
Income before income taxes 603 684 (11.8)
Provision for income taxes 175 226 (22.6)
Net income $428 $458 (6.6)%
PER SHARE DATA
Basic earnings $.78 $.84 (7.1)%
Diluted earnings .78 .83 (6.0)
Weighted average shares (in
thousands) -
Basic 546,628 548,385
Diluted 549,758 553,935
PERFORMANCE RATIOS BASED
ON NET INCOME
Return on average assets 1.27 % 1.47 %
Return on average equity 13.27 15.18
Efficiency ratio (taxable
equivalent) (2) 49.4 53.5
NOTES: Applicable ratios are annualized.
(1) Operating earnings exclude the effect of merger-related and
restructuring charges or credits and nonrecurring items. These
amounts totaled $(51 million) and $3 million, net of tax, in
the second quarters of 2008 and 2007, respectively. See
Reconciliation Tables included herein.
(2) Excludes securities gains (losses), foreclosed property
expense, increases or decreases in the valuation of mortgage
servicing rights, and gains or losses on mortgage servicing
rights-related derivatives. Cash basis and operating ratios
also exclude merger-related and restructuring charges or
credits and nonrecurring items, where applicable. See
Reconciliation Tables included herein.
(3) Cash basis performance information excludes the effect on
earnings of amortization expense applicable to intangible
assets, the unamortized balances of intangibles from assets and
equity, net of deferred taxes, and the net amortization of
purchase accounting mark-to-market adjustments. See
Reconciliation Tables included herein.
QUARTERLY PERFORMANCE SUMMARY
BB&T Corporation (NYSE: BBT)
(Dollars in millions, except per share data)
For the Six Months Percent
Ended Increase
6/30/08 6/30/07 (Decrease)
OPERATING EARNINGS STATEMENTS (1)
Interest income - taxable equivalent $3,735 $3,889 (4.0)%
Interest expense 1,611 1,941 (17.0)
Net interest income - taxable
equivalent 2,124 1,948 9.0
Less: Taxable equivalent adjustment 39 37 5.4
Net interest income 2,085 1,911 9.1
Provision for credit losses 553 159 247.8
Net interest income after provision
for credit losses 1,532 1,752 (12.6)
Noninterest income 1,517 1,381 9.8
Noninterest expense 1,942 1,795 8.2
Operating earnings before income
taxes 1,107 1,338 (17.3)
Provision for income taxes 329 452 (27.2)
Operating earnings (1) $778 $886 (12.2)%
PER SHARE DATA BASED ON OPERATING
EARNINGS (1)
Basic Earnings $1.42 $1.63 (12.9)%
Diluted Earnings 1.42 1.61 (11.8)
Weighted average shares (in
thousands) -
Basic 546,421 545,136
Diluted 549,344 550,556
Dividends paid per share $.92 $.84 9.5 %
PERFORMANCE RATIOS BASED ON OPERATING
EARNINGS (1)
Return on average assets 1.16% 1.45%
Return on average equity 12.08 15.12
Net yield on earning assets (taxable
equivalent) 3.59 3.58
Noninterest income as a percentage of
total income (taxable equivalent) (2) 40.9 41.6
Efficiency ratio (taxable
equivalent) (2) 53.2 53.4
CASH BASIS PERFORMANCE BASED ON
OPERATING EARNINGS (1)(3)
Cash basis operating earnings $810 $918 (11.8)%
Diluted earnings per share 1.48 1.67 (11.4)
Return on average tangible assets 1.27% 1.58%
Return on average tangible equity 22.12 28.35
Efficiency ratio (taxable
equivalent) (2) 51.7 51.9
QUARTERLY PERFORMANCE SUMMARY
BB&T Corporation (NYSE: BBT)
(Dollars in millions, except per share data)
For the Six Months Percent
Ended Increase
6/30/08 6/30/07 (Decrease)
INCOME STATEMENTS
Interest Income $3,685 $3,852 (4.3)%
Interest Expense 1,600 1,941 (17.6)
Net interest income 2,085 1,911 9.1
Provision for credit losses 553 159 247.8
Net interest income after provision
for credit losses 1,532 1,752 (12.6)
Noninterest income 1,598 1,381 15.7
Noninterest expense 1,898 1,806 5.1
Income before income taxes 1,232 1,327 (7.2)
Provision for income taxes 376 448 (16.1)
Net income $856 $879 (2.6)%
PER SHARE DATA
Basic earnings $1.57 $1.61 (2.5)%
Diluted earnings 1.56 1.60 (2.5)
Weighted average shares (in
thousands) -
Basic 546,421 545,136
Diluted 549,344 550,556
PERFORMANCE RATIOS BASED
ON NET INCOME
Return on average assets 1.28% 1.44%
Return on average equity 13.29 15.00
Efficiency ratio (taxable
equivalent) (2) 50.8 53.8
NOTES: Applicable ratios are annualized.
(1) Operating earnings exclude the effect of merger-related and
restructuring charges or credits and nonrecurring items.
These amounts totaled $(78 million) and $7 million, net of tax,
in 2008 and 2007, respectively. See Reconciliation Tables
included herein.
(2) Excludes securities gains (losses), foreclosed property
expense, increases or decreases in the valuation of mortgage
servicing rights, and gains or losses on mortgage servicing
rights-related derivatives. Cash basis and operating ratios
also exclude merger-related and restructuring charges or
credits and nonrecurring items, where applicable. See
Reconciliation Tables included herein.
(3) Cash basis performance information excludes the effect on
earnings of amortization expense applicable to intangible
assets, the unamortized balances of intangibles from assets and
equity, net of deferred taxes, and the net amortization of
purchase accounting mark-to-market adjustments. See
Reconciliation Tables included herein.
QUARTERLY PERFORMANCE SUMMARY
BB&T Corporation (NYSE: BBT)
(Dollars in millions)
As of / For the Percent
Six Months Ended Increase
6/30/08 6/30/07 (Decrease)
CONSOLIDATED BALANCE SHEETS
End of period balances
Cash and due from banks $1,913 $1,745 9.6%
Interest-bearing deposits with banks 748 769 (2.7)
Federal funds sold and other earning
assets 227 419 (45.8)
Securities available for sale 22,657 22,254 1.8
Trading securities 514 1,067 (51.8)
Total securities 23,171 23,321 (.6)
Commercial loans and leases 47,790 42,632 12.1
Direct retail loans 15,623 15,520 0.7
Sales finance loans 6,266 5,889 6.4
Revolving credit loans 1,667 1,461 14.1
Mortgage loans 17,304 16,640 4.0
Specialized lending 5,550 5,248 5.8
Total loans and leases held for
investment 94,200 87,390 7.8
Loans held for sale 1,515 1,152 31.5
Total loans and leases 95,715 88,542 8.1
Allowance for loan and lease losses 1,257 920 36.6
Total earning assets 120,300 113,599 5.9
Premises and equipment, net 1,557 1,485 4.8
Goodwill 5,306 5,114 3.8
Core deposit and other intangibles 505 504 0.2
Other assets 8,580 6,598 30.0
Total assets 136,465 127,577 7.0
Noninterest-bearing deposits 13,567 13,641 (0.5)
Interest checking 2,542 1,384 83.7
Other client deposits 36,871 35,741 3.2
Client certificates of deposit 26,801 27,445 (2.3)
Total client deposits 79,781 78,211 2.0
Other interest-bearing deposits 8,433 5,868 43.7
Total deposits 88,214 84,079 4.9
Fed funds purchased, repos and other
borrowings 10,804 9,410 14.8
Long-term debt 20,556 18,313 12.2
Total interest-bearing liabilities 106,007 98,161 8.0
Other liabilities 4,091 3,650 12.1
Total liabilities 123,665 115,452 7.1
Total shareholders' equity $12,800 $12,125 5.6%
Average balances
Securities, at amortized cost $23,656 $22,502 5.1%
Commercial loans and leases 46,323 41,531 11.5
Direct retail loans 15,612 15,355 1.7
Sales finance loans 6,109 5,779 5.7
Revolving credit loans 1,615 1,402 15.2
Mortgage loans 18,738 16,858 11.2
Specialized lending 5,395 4,997 8.0
Total loans and leases 93,792 85,922 9.2
Allowance for loan and lease losses 1,068 905 18.0
Other earning assets 1,158 904 28.1
Total earning assets 118,606 109,328 8.5
Total assets 134,491 122,961 9.4
Noninterest-bearing deposits 12,881 13,158 (2.1)
Interest checking 2,433 2,348 3.6
Other client deposits 34,750 33,628 3.3
Client certificates of deposit 26,903 25,498 5.5
Total client deposits 76,967 74,632 3.1
Other interest-bearing deposits 9,667 7,607 27.1
Total deposits 86,634 82,239 5.3
Fed funds purchased, repos and other
borrowings 10,555 8,317 26.9
Long-term debt 20,449 17,286 18.3
Total interest-bearing liabilities 104,757 94,684 10.6
Total shareholders' equity $12,955 $11,819 9.6%
NOTES: All items referring to average loans and leases include loans held
for sale.
QUARTERLY PERFORMANCE SUMMARY
BB&T Corporation (NYSE: BBT)
(Dollars in millions, except per share data)
For the Three Months Ended
6/30/08 6/30/07
RECONCILIATION TABLE
Net income $428 $458
Merger-related and restructuring
items, net of tax 1 3
Other, net of tax (3) (52) -
Operating earnings 377 461
Amortization of intangibles, net
of tax 15 16
Amortization of mark-to-market
adjustments, net of tax - -
Cash basis operating earnings 392 477
Return on average assets 1.27% 1.47%
Effect of merger-related and
restructuring items, net of tax - .01
Effect of other, net of tax (3) (.15) -
Operating return on average assets 1.12 1.48
Effect of amortization of
intangibles, net of tax (1) .10 .13
Effect of amortization of mark-
to-market adjustments, net of tax - -
Cash basis operating return on
average tangible assets 1.22 1.61
Return on average equity 13.27% 15.18%
Effect of merger-related and
restructuring items, net of tax .02 .10
Effect of other, net of tax (3) (1.60) -
Operating return on average equity 11.69 15.28
Effect of amortization of
intangibles, net of tax (1) 9.75 13.20
Effect of amortization of mark-
to-market adjustments, net of tax - -
Cash basis operating return on
average tangible equity 21.44 28.48
Efficiency ratio (taxable
equivalent) (2) 49.4% 53.5%
Effect of merger-related and
restructuring items (.1) (.3)
Effect of other (3) 3.2 -
Operating efficiency ratio (2) 52.5 53.2
Effect of amortization of
intangibles (1.3) (1.5)
Effect of amortization of mark-
to-market adjustments - -
Cash basis operating efficiency
ratio (2) 51.2 51.7
Fee income ratio (2) 43.0% 42.6%
Effect of other (3) (1.4) -
Operating fee income ratio (2) 41.6 42.6
Basic earnings per share $.78 $.84
Effect of merger-related and
restructuring items, net of tax - -
Effect of other, net of tax (3) (.09) -
Operating basic earnings per share .69 .84
Diluted earnings per share $.78 $.83
Effect of merger-related and
restructuring items, net of tax - -
Effect of other, net of tax (3) (.09) -
Operating diluted earnings per share .69 .83
Effect of amortization of
intangibles, net of tax .02 .03
Effect of amortization of mark-
to-market adjustments, net of tax - -
Cash basis operating diluted
earnings per share .71 .86
NOTES: Applicable ratios are annualized.
(1) Reflects the effect of excluding average intangible assets
from average assets and average equity, net of deferred taxes,
to calculate cash basis ratios.
(2) Excludes securities gains (losses), foreclosed property
expense, increases or decreases in the valuation of mortgage
servicing rights, and gains or losses on mortgage servicing
rights-related derivatives. Operating and cash basis ratios
also exclude merger-related and restructuring charges or
credits and nonrecurring items, where applicable.
(3) The second quarter of 2008 reflects a gain from the sale of
Visa, Inc. shares and a gain from the early extinguishment of
certain FHLB advances collectively totaling $52 million, net of
tax.
QUARTERLY PERFORMANCE SUMMARY
BB&T Corporation (NYSE: BBT)
(Dollars in millions, except per share data)
For the Six Months Ended
6/30/08 6/30/07
RECONCILIATION TABLE
Net income $856 $879
Merger-related and restructuring
items, net of tax 4 7
Other, net of tax (3) (82) -
Operating earnings 778 886
Amortization of intangibles, net
of tax 32 32
Amortization of mark-to-market
adjustments, net of tax - -
Cash basis operating earnings 810 918
Return on average assets 1.28% 1.44%
Effect of merger-related and
restructuring items, net of tax - .01
Effect of other, net of tax (3) (.12) -
Operating return on average assets 1.16 1.45
Effect of amortization of
intangibles, net of tax (1) .11 .13
Effect of amortization of mark-
to-market adjustments, net of tax - -
Cash basis operating return on
average tangible assets 1.27 1.58
Return on average equity 13.29% 15.00%
Effect of merger-related and
restructuring items, net of tax .05 .12
Effect of other, net of tax (3) (1.26) -
Operating return on average equity 12.08 15.12
Effect of amortization of
intangibles, net of tax (1) 10.04 13.23
Effect of amortization of mark-
to-market adjustments, net of tax - -
Cash basis operating return on
average tangible equity 22.12 28.35
Efficiency ratio (taxable
equivalent) (2) 50.8% 53.8%
Effect of merger-related and
restructuring items (.1) (.4)
Effect of other (3) 2.5 -
Operating efficiency ratio (2) 53.2 53.4
Effect of amortization of
intangibles (1.5) (1.5)
Effect of amortization of mark-
to-market adjustments - -
Cash basis operating efficiency
ratio (2) 51.7 51.9
Fee income ratio (2) 42.2% 41.6%
Effect of other (3) (1.3) -
Operating fee income ratio (2) 40.9 41.6
Basic earnings per share $1.57 $1.61
Effect of merger-related and
restructuring items, net of tax - .02
Effect of other, net of tax (3) (.15) -
Operating basic earnings per share 1.42 1.63
Diluted earnings per share $1.56 $1.60
Effect of merger-related and
restructuring items, net of tax .01 .01
Effect of other, net of tax (3) (.15) -
Operating diluted earnings per
share 1.42 1.61
Effect of amortization of
intangibles, net of tax .06 .06
Effect of amortization of mark-
to-market adjustments, net of tax - -
Cash basis operating diluted
earnings per share 1.48 1.67
NOTES: Applicable ratios are annualized.
(1) Reflects the effect of excluding average intangible assets from
average assets and average equity, net of deferred taxes, to
calculate cash basis ratios.
(2) Excludes securities gains (losses), foreclosed property
expense, increases or decreases in the valuation of mortgage
servicing rights, and gains or losses on mortgage servicing
rights-related derivatives. Operating and cash basis ratios
also exclude merger-related and restructuring charges or
credits and nonrecurring items, where applicable.
(3) 2008 reflects gains from the initial IPO and sale of Visa, Inc.
shares, a reversal of a reserve charge relating to the Visa,
Inc. settlement and gains from the early extinguishment of
certain FHLB advances collectively totaling $82 million, net of
tax.
SOURCE BB&T Corporation
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President, Investor Relations, +1-336-733-3058, or Chris Henson,
Sr. Exec. Vice President and Chief Financial Officer,
+1-336-733-3008, or MEDIA, Bob Denham, Senior Vice President,
Corporate Communications, +1-336-733-1475
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