BB&T in Winston-Salem, N.C., reported lower quarterly earnings that reflected a decision to extinguish debt and ongoing costs tied to a regulatory order.
The $221 billion-asset company said in a press release Thursday that its first-quarter profit fell 28% from a year earlier to $378 million.
Noninterest expenses jumped by 36% to $2.1 billion. The results included a $392 million loss tied to extinguishing $2.9 billion of Federal Home Loan bank advances. Personnel expenses rose by 11% and the company incurred $39 million in costs tied to regulatory charges.
BB&T said getting out of the Home Loan bank advances would lower its future borrowing costs and boost margins and earnings in coming quarters. In terms of regulatory costs, the company is working on a consent order it received a few months ago tied to its Bank Secrecy Act and anti-money-laundering programs.
Net interest income rose 5.2% to $1.6 billion. Total loans increased by 5% to $144 billion, while the net interest margin expanded by 3 basis points to 3.46%. Total loans fell slightly from Dec. 31, with declines in areas such as commercial-and-industrial loans, direct retail lending and sales finance.
The loan-loss provision fell by 20% to $148 million from a year earlier. Nonperforming assets were 0.36% of total assets, down from 0.42% a year earlier.
Noninterest income increased by 15% to $1.2 billion. Mortgage banking income rose by 13%, while insurance income increased by 9.3%.