BB&T 4Q income rose 12.4% from year earlier
BB&T Corp.'s (BBT) fourth-quarter income rose 12.4% from a year earlier, as the bank holding company recorded higher net interest income from increased yields on loans acquired in its acquisition of Colonial Bank and lower deposit costs. BB&T earned $208 million, or 30 cents a share, for the three months ended Dec. 31, up from $185 million, or 27 cents a share, a year ago. Revenue for the quarter rose slightly to $2.33 billion from $2.32 billion in 2009. The provision for loan losses for the quarter declined 25%, as improving credit trends resulted in lower provision expense, according to BB&T. Fourth-quarter mortgage banking income fell by $46 million from a year earlier, due to a decline in income from residential mortgage banking activities that was partially offset by an increase from commercial mortgage banking. Noninterest income for the quarter fell less than 1% to $964 million from $970 million a year earlier, as higher securities gains of $100 million were offset by a decrease of $43 million in service charges on deposit accounts and $62 million of losses and writedowns on commercial loans held for sale. "Our credit outlook is notably improved compared to last quarter," Chairman and Chief Executive Kelly King said. "Peaking in the second quarter of 2010, we have seen steady improvement in most measures through the end of the year and declines in essentially all credit costs this quarter." The bank ended the fourth quarter with $3.67 billion of total loans held for sale, a 45% increase from $2.55 billion a year earlier, yet down 14% from $3.83 billion at the end of the third quarter. "Our strategy to accelerate the disposition of problem assets is being effectively executed, as we sold approximately $600 million in problem assets this quarter," King said. BB&T completed its strategy to de-risk its investment securities portfolio during the fourth quarter in anticipation of rising rates. The company sold about $6.1 billion of agency mortgage-backed securities and replaced them with shorter duration and floating rate securities. BB&T also sold about $400 million of nonagency MBS to reduce the potential for future credit losses. Full-year revenue rose 5.8% to $9.4 billion from 2009. The bank lowered nonperforming assets by 4.2% during the quarter to $3.97 billion from $4.17 billion. Some $1.41 billion of nonperforming assets are between 30 and 90 days past due. BB&T ended the fourth quarter with total deposits of $105.59 billion down 7.1% from $113.62 billion a year earlier. Write to Jason Philyaw.