BB&T warns of slower revenue growth in second half of '18

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A tempered outlook for the rest of the year overshadowed solid quarterly results at BB&T in Winston-Salem, N.C.

The $223 billion-asset company said in a presentation included with its second-quarter results that it expects full-year revenue growth of 1% to 3%. The guidance was lower than its prior forecast of a 2% to 4% increase.

BB&T also backed away from an outlook that included lower year-over-year expenses, while keeping its forecast for loan growth unchanged at 1% to 3%.

John Pancari, an analyst at Evercore, characterized the midyear guidance as “modestly worse” than prior guidance from BB&T.

For the second quarter, BB&T reported that net income available to common shareholders rose 23% from a year earlier, to $775 million, or 99 cents a share. Total revenue increased by 0.8%, to $2.9 billion.

Net interest income increased by 1.3% to $1.7 billion. Total loans increased by 1.8%, to $148 billion, while the net interest margin narrowed by 2 basis points to 3.45%.

Commercial and industrial loans increased by 2.4% to $60 billion. Commercial real estate loans rose by 6% to $22 billion.

Indirect loans fell by 7% to $17 billion, while direct loans decreased by 3% to $12 billion. Residential mortgages were relatively flat at $29 billion.

The loan-loss provision was unchanged at $135 million.

"Asset quality remains excellent and improved further during the second quarter,” Kelly King, BB&T's chairman and CEO, said in a news release Thursday. “Nonperforming assets, net charge-offs and loans 90 days or more past due all declined from already very low levels.”

Noninterest income was flat at $1.2 billion. Increases in service charges on deposits and investment banking income were offset by lower bankcard fees and less income from bank-owned life insurance. Mortgage banking income was flat.

Noninterest expense fell 1.3% to $1.7 billion. Occupancy and equipment expense fell 11%, while outside IT services costs decreased by 7%. Loan-related expense declined by 10%.

The company disclosed earlier this month that it had been released from all or part of two regulatory enforcement orders tied to its compliance with anti-money-laundering laws.

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