BB&T in Winston-Salem, N.C., reported higher quarterly earnings that reflected modest loan growth, increased fee income and expense control.

The $221 billion-asset company said in a press release Thursday that its second-quarter profit rose 15% from a year earlier to $674 million. Excluding merger-related charges, earnings per share were 78 cents, a penny better than the analyst consensus estimate compiled by FactSet Research Systems.

A BB&T branch.
Name of the game
Expense control was important last quarter for BB&T, which lowered noninterest expenses 3% despite $10 million in merger-related expenses. Bloomberg News

Revenue increased by 4% to $2.9 billion.

Net interest income increased by 1.1% to $1.6 billion. Total loans rose by 0.9% to $145 billion while the net interest margin expanded by 6 basis points to 3.41%.

Commercial-and-industrial loans rose slightly to $52.6 billion, while income-producing commercial real estate fell modestly to $14.9 billion. Sales finance increased, offsetting a decrease in residential mortgages.

Noninterest income rose by 8% to $1.1 billion. All fee categories showed improvement except for mortgage income, which fell by 15% to $94 million. Bankcard fees and merchant discounts notably increased by 25% to $75 million.

Noninterest expense fell by 3.1% to $1.7 billion. Outside information-technology expenses fell by 11.4%, offsetting a 7.5% rise in software expense. The company had $10 million in merger-related expenses during the second quarter.

The loan-loss provision increased by 21.6% to $135 million. Net chargeoffs rose by 36% to $132 million.

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