WINSTON-SALEM, N.C. — BB&T Corp. (NYSE: BBT) today reported $157 million in net income for the third quarter, or 23cents per diluted common share, compared with $362 million, or $.65 per diluted common share, earned during the third quarter of 2008. The third quarter results produced annualized returns on average assets and average common shareholders’ equity of .40% and 3.90%, respectively.
“I am pleased with most aspects of our current performance,” said President and Chief Executive Officer Kelly S. King. “Our revenue growth for the quarter was very strong at 16.1%, the net interest margin is improved, growth in noninterest-bearing deposits is exceptional and the impact from the Colonial acquisition is positive. However, our earnings continue to be negatively affected by a significant provision for credit losses and other costs related to the credit environment.
“We are very excited about our acquisition of the assets and deposits of Colonial Bank and with the progress of our integration plans. We continue to project meaningful earnings accretion from the transaction, which provides tremendous strategic benefits for BB&T. We welcome our new colleagues from the former Colonial and our new clients. The acquisition has been viewed very positively by our new depositors, as evidenced by stable client deposits.”
For the first nine months of the year, BB&T’s net income was $683 million, compared with $1.2 billion earned in the first nine months of 2008. Diluted earnings per common share for the first nine months of 2009 totaled $.88, compared with $2.20 earned during the same period in 2008. Results for the first nine months of 2009 produced annualized returns on average assets and average common shareholders’ equity of .60% and 5.09%, respectively.
On Aug. 14, BB&T assumed all of the deposits and acquired certain assets and other liabilities of Colonial Bank (Colonial), headquartered in Montgomery, Ala., from the Federal Deposit Insurance Corporation (FDIC). Colonial operated 357 banking offices in Alabama, Florida, Georgia, Texas and Nevada. The acquisition significantly strengthened BB&T’s banking franchise, moving BB&T to fifth in deposit market share in Florida and fourth in Alabama.
“The acquisition meets all of our stated objectives for growth, including near-term earnings accretion and minimal additional credit risk.” King said. “Our risk in the transaction is significantly limited by an agreement with the FDIC whereby they reimburse BB&T for the vast majority of the losses on the assets we acquired.”
BB&T last week jointly announced an agreement with U.S. Bank to sell Colonial branches and related deposits in Nevada in the first quarter of 2010. The agreement excludes substantially all of the loans associated with these branches, which will remain with BB&T and remain covered by the FDIC loss-share agreement.
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