10-QPeriod: Q3 FY2015

TRUIST FINANCIAL CORP Quarterly Report for Q3 Ended Sep 30, 2015

Filed October 30, 2015For Securities:TFCTFC-POTFC-PRTFC-PI

Summary

BB&T Corporation (BB&T) reported net income available to common shareholders of $492 million, or $0.64 per diluted share, for the third quarter of 2015. This represents a decrease compared to the $512 million, or $0.70 per diluted share, reported in the same quarter of the previous year. The company's financial performance was impacted by the acquisition of Susquehanna Bancshares, Inc. (Susquehanna), which closed on August 1, 2015, and contributed positively to net interest income and total revenues. Key financial metrics show a decline in annualized returns on average assets, risk-weighted assets, and common shareholders' equity compared to the prior year's quarter, reflecting the dilutive impact of the acquisition and a less favorable interest rate environment. However, the company's total assets grew significantly to $208.8 billion, driven by the Susquehanna acquisition, and its capital ratios remained strong, exceeding regulatory requirements.

Financial Highlights

37 data points
Beta

Net Income

$533.00M

EPS (Diluted)

$0.64

Total Assets

$208.81B

Cash & Equivalents

$2.78B

Free Cash Flow

$1.88B

Financial Statements
Beta
Interest Expense$186.00M
Net Income$533.00M
EPS (Basic)$0.64
EPS (Diluted)$0.64
Shares Outstanding (Basic)764.43M
Shares Outstanding (Diluted)774.02M

Key Highlights

  • 1Net income available to common shareholders decreased by $20 million to $492 million in Q3 2015 compared to Q3 2014.
  • 2Diluted EPS decreased to $0.64 in Q3 2015 from $0.70 in Q3 2014.
  • 3Total assets increased by approximately $21.97 billion to $208.8 billion by September 30, 2015, primarily due to the acquisition of Susquehanna.
  • 4The acquisition of Susquehanna contributed positively to net interest income and total revenues.
  • 5Net interest margin (NIM) slightly decreased to 3.35% from 3.38% in the prior year's quarter.
  • 6Provision for credit losses increased significantly to $103 million from $34 million, reflecting a stabilization in credit trends and the absence of a reserve release seen in the prior year.
  • 7Noninterest expense increased by $55 million to $1.6 billion, largely due to costs associated with the Susquehanna acquisition.

Frequently Asked Questions

The primary driver of the significant increase in total assets, from $186.8 billion at December 31, 2014, to $208.8 billion at September 30, 2015, was the acquisition of Susquehanna Bancshares, Inc. on August 1, 2015.

The acquisition of Susquehanna contributed to an increase in net interest income due to higher average earning assets. However, the net interest margin (NIM) slightly decreased to 3.35% for the third quarter of 2015 from 3.38% in the same quarter of the prior year. This slight compression was attributed to lower yields on new loans and the runoff of higher-yielding loans acquired from the FDIC, partially offset by the impact of purchase accounting for Susquehanna loans.

The provision for credit losses increased to $103 million in the third quarter of 2015 from $34 million in the prior year's quarter. This increase was primarily due to a higher provision for the commercial and industrial portfolio, reflecting stabilization in credit trends and risk considerations related to the energy sector. Additionally, the prior year's quarter included a reserve release that did not occur in the current quarter.

BB&T's capital position remained strong. The company's Common Equity Tier 1 ratio was 10.1% under the Basel III transitional approach at September 30, 2015, exceeding the regulatory minimum. Total shareholders' equity increased to $27.3 billion, driven by net income and equity issued for acquisitions, partially offset by dividends and other capital actions.