01—Abstract
Summary
Summary of the 10-K filed February 26, 2010. Cited figures are marked; the original filing is the authoritative source.
Truist Financial Corporation (TFC), previously BB&T Corporation, reported its 2009 fiscal year results, a period marked by significant economic challenges and strategic acquisitions.
The company successfully executed the FDIC-assisted acquisition of Colonial Bank, its largest acquisition to date, which substantially expanded its banking footprint, particularly in Alabama and Florida. Despite a challenging operating environment, including the deep recession and disruption in financial markets, BB&T demonstrated resilience, exceeding capital requirements under the Supervisory Capital Assessment Process (SCAP) and exiting the Troubled Asset Relief Program (TARP). The company strengthened its capital base by raising $2.6 billiona through common stock offerings and repaid its TARP preferred stock and warrant.
However, net income and earnings per share saw a significant year-over-year decline, primarily due to increased provisions for credit losses driven by deterioration in housing-related credits. The company also managed to grow its non-interest revenue streams, with notable performance in its residential mortgage banking and insurance operations.
02—Key points
Key Highlights
- Successfully executed the FDIC-assisted acquisition of Colonial Bank, significantly expanding its market presence in Alabama and Florida.
- Exited the Troubled Asset Relief Program (TARP) and exceeded capital requirements in the Supervisory Capital Assessment Process (SCAP).
- Strengthened capital by raising $2.6 billion through two common stock offerings and repaid U.S. Treasury preferred stock and warrant.
- Reported a 42.6% decrease in consolidated net income to $877 million, and a 51.3% decrease in net income available to common shareholders to $729 million, due to increased provisions for credit losses.
- Experienced strong revenue growth of 18.3%, driven by a 23.1% increase in noninterest income, with record performance in mortgage banking and insurance.
- Increased provision for credit losses to $2.8 billion, reflecting deterioration in housing-related credits, particularly in Georgia, Florida, and the Washington D.C. metro area.
- Maintained a strong deposit growth of 27.7% to $106.8 billion, boosted by the Colonial acquisition and improvements in deposit mix.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2009filed February 26, 2010Financial Statements
FY2009 against FY2008
| Line item | FY2009FY2008 | Change |
|---|---|---|
| Interest Expense | $2.04B$2.97B | −31.3% |
| Net Income | $729.00M$1.50B | −51.3% |
| EPS (Basic) | $1.16$2.73 | −57.5% |
| EPS (Diluted) | $1.15$2.71 | −57.6% |
| Shares Outstanding (Basic) | 629.58M548.85M | +14.7% |
| Shares Outstanding (Diluted) | 635.62M552.50M | +15.0% |
05—Questions
Frequently Asked Questions
What was BB&T's net income in 2009, and how did it compare to 2008?
BB&T reported consolidated net income of $877 million for 2009, a decrease of 42.6% compared to $1.5 billion earned in 2008. Net income available to common shareholders also decreased by 51.3% to $729 million in 2009 from $1.5 billion in 2008.
What was the impact of the Colonial Bank acquisition on BB&T's financial performance?
The acquisition of Colonial Bank, completed in August 2009, was BB&T's largest to date and significantly strengthened its banking franchise, improving its market share in Florida and Alabama. It contributed to a 27.7% increase in total client deposits. However, the acquisition, along with ongoing economic challenges, contributed to higher provisions for credit losses, impacting the overall net income.
How did BB&T's capital position fare in 2009?
BB&T maintained a strong capital position throughout 2009. The company exceeded its capital requirements as measured in the Supervisory Capital Assessment Process (SCAP). It also raised $2.6 billion in common stock during the year and repaid its $3.1 billion preferred stock investment from the U.S. Treasury as part of the TARP Capital Purchase Program. The Tier 1 common ratio was 8.5% at December 31, 2009, well above regulatory standards.
What were the key drivers of BB&T's revenue growth in 2009?
BB&T achieved strong revenue growth of 18.3% in 2009. This was driven by a 23.1% increase in noninterest income, which included record performance from its residential mortgage banking operations (up 139.3%) and a 12.8% increase in insurance income. Net interest income also grew by 14.9%.
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