BB&T residential mortgage loans “decreases as planned” in Q3

But mortgage banking revenue increases

BB&T Corp. reported its earnings Thursday which showed a decrease in mortgage banking, however the bank explained this drop was already planned.

The bank’s total loans declined 1.1% from the second to the third quarter, led primarily by a decrease in prime auto, residential mortgage and PCI loans.

“While average total loans declined 1.1% annualized compared with last quarter, core loans increased 3.2%, which excludes prime auto, residential mortgage and PCI loans that are decreasing as planned,”BB&T Chairman and CEO Kelly King said. “Our credit quality is very strong, as nonperforming assets and loans 90 days or more past due were relatively stable and net charge-offs improved from already low levels.”

Averaged residential mortgage loans decreased $468 million, or 6.3%, from last year to $28.9 billion in the third quarter. However, despite this decrease in loans, mortgage banking income increased, partially offsetting the quarterly drop of $54 million in noninterest income to $1.2 billion in the third quarter.

Total mortgage banking income increased a full 21.3% from the second quarter’s $94 million to $114 million in the third quarter. However, this was still down 26% from $154 million in the third quarter of 2016.

Overall the bank’s revenues increased slightly in the third quarter. Total taxable-equivalent revenue increased by $40 million to $2.85 billion in the third quarter, up from $2.81 billion the year before. However, this is a decrease of $41 million from the second quarter’s $2.9 billion.

Net income held relatively steady with a decrease of just 0.3% from last year’s $599 million to $597 million in the third quarter. This is down 5.4% from the second quarter’s $631 million.

Diluted earnings per common share increased just 1.4% from $0.73 per share last year to $0.74 per share in the third quarter. This is down 3.9% from $0.77 in the second quarter.

“We had a solid quarter with growth in revenues and good expense control,” King said. “Taxable-equivalent revenues were $2.9 billion, up 1.4% compared to the third quarter of 2016 and net interest income was up $38 million driven by higher interest rates.”

“Total expenses for the quarter were $1.7 billion and our GAAP efficiency was 62%, primarily due to restructuring charges as we continue to optimize our structure,” he said. “Our year-to-date adjusted efficiency ratio of 58.3% is the lowest level in four years.”

Most Popular Articles

Here are the mortgage lenders that borrowers like the most

J.D. Power’s 2019 U.S. Primary Mortgage Origination Satisfaction Study, released Thursday morning, showed that there are some lenders that customers seem to love working with more than others. Here are the ones that borrowers are partial to.

Nov 14, 2019 By

Latest Articles

Congressional vote on “de facto QM Patch” postponed

The House Financial Services Committee postponed a vote on H.R. 2445 on Wednesday, a bill that would fix the so-called QM Patch that’s set to expire in early 2021.

Nov 15, 2019 By