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BB&T Corp. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: May 4, 2012 09:32PM
BB&T Corp. (BBT) filed Quarterly Report for the period ended 2012-03-31. Bb&t Corp has a market cap of $22.66 billion; its shares were traded at around $31.56 with a P/E ratio of 15.3 and P/S ratio of 2.3. The dividend yield of Bb&t Corp stocks is 2%.
Highlight of Business Operations:Consolidated net income available to common shareholders for the first quarter of 2012 of $431 million was up 91.6% compared to $225 million earned during the same period in 2011. On a diluted per common share basis, earnings for the first quarter of 2012 were $0.61, up 90.6% compared to $0.32 for the same period in 2011. BB&Ts results of operations for the first quarter of 2012 produced an annualized return on average assets of 1.03% and an annualized return on average common shareholders equity of 9.75% compared to prior year ratios of 0.60% and 5.48%, respectively.
Total revenues, on a tax equivalent basis, were $2.3 billion for the first quarter of 2012, up $309 million compared to the first quarter of 2011. The increase in total revenues was due to $152 million of higher net interest income, primarily driven by an increase in earning assets and lower funding costs. The net interest margin was 3.93%, down 8 basis points compared to the first quarter of 2011. Noninterest income increased $157 million. The increase in noninterest income was largely attributable to $121 million of higher revenues from mortgage banking activities and a $21 million increase in insurance income. In addition, other income was up $38 million due to $74 million of fewer losses and write-downs on the commercial loans held for sale in connection with managements nonperforming loan disposition strategy, partially offset by $42 million of
The provision for income taxes was $189 million for the first quarter of 2012 compared to $53 million for the first quarter of 2011. This resulted in an effective tax rate for the first quarter of 2012 of 29.8% compared to 18.5% for the prior years first quarter. The increase in the effective tax rate was primarily due to higher levels of pre-tax earnings relative to permanent tax differences in 2012 compared to 2011. The current quarter also included $16 million in tax expense primarily due to changes in the treatment of certain credits related to affordable housing partnership investments.
Consolidated net income available to common shareholders totaled $431 million, which generated diluted earnings per common share of $0.61 in the first quarter of 2012. Net income available to common shareholders for the same period of 2011 totaled $225 million, which generated diluted earnings per common share of $0.32. The increase in earnings was driven by higher revenues and lower credit-related costs. BB&Ts results of operations for the first quarter of 2012 produced an annualized return on average assets of 1.03% and an annualized return on average common shareholders equity of 9.75%, compared to prior year returns of 0.60% and 5.48%, respectively.
Mortgage banking income totaled $216 million in the first quarter of 2012, an increase of $121 million compared to $95 million earned in the first quarter of 2011. This increase is primarily due to $93 million in higher gains on residential mortgage loan production due to wider margins and increased sales volumes. Included in mortgage banking income during the first quarter of 2012 was a gain of $40 million from the net valuation of residential mortgage servicing rights. This compares to a net gain of $2 million in the first quarter of 2011. Included in the first quarter 2012 net valuation adjustment is a $93 million increase in the fair value of mortgage servicing rights, primarily due to a decrease in prepayment speeds, partially offset by $53 million of losses from derivative financial instruments used to manage the economic risk of the mortgage servicing rights.
Stocks Discussed: BBT,