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
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