BB&T Corp. on Thursday reported a drop in first-quarter profit from a year ago as it took a nearly $300 million hit in connection with a tax dispute with the Internal Revenue Service.
The Winston-Salem-based company reported profit of $210 million, or 29 cents per share, during a quarter in which it recorded a $281 million charge as it fights the IRS in court over the tax issue. The charge ate into profit, which fell from $431 million in the first quarter of last year.
Revenue for the recent first quarter was up 5 percent, to $2.5 billion from $2.3 billion a year ago.
The company attributed the revenue growth to a boost in insurance revenues stemming from its $570 million purchase last year of the life and property and casualty insurance divisions of Roseland, N.J.-based Crump Group. BB&T, when it announced the purchase of Crump, said it was expected to increase its annual revenue by roughly $300 million. But the tax-related charge put a damper on the first quarter.
BB&T has been battling the IRS in U.S. Court for Federal Claims as the bank tries to get back roughly $900 million it paid in penalties after the IRS said the bank shouldn’t have taken advantage of foreign tax credits.
After a U.S. Tax Court judge ruled Feb. 11 against Bank of New York Mellon Corp.’s use of the credits, BB&T announced that it would record a charge of $281 million in the first quarter to increase its reserves as its dispute with the IRS continues.
Roberts: 704-358-5248;Twitter: @DeonERoberts
The Charlotte Observer welcomes your comments on news of the day. The more voices engaged in conversation, the better for us all, but do keep it civil. Please refrain from profanity, obscenity, spam, name-calling or attacking others for their views.
Have a news tip? You can send it to a local news editor; email firstname.lastname@example.org to send us your tip - or - consider joining the Public Insight Network and become a source for The Charlotte Observer.Read moreRead less