BB&T Corp.'s profits rose in the fourth quarter from a year ago and beat Wall Street estimates as the bank benefited from fewer bad loans on its books.
Fourth-quarter earnings rose to $537 million, or 75 cents a diluted share, from $506 million, or 71 cents, a year earlier, the Winston-Salem-based bank said. Analysts had estimated 71 cents for the recent quarter.
Revenue fell to $2.4 billion from $2.5 billion, as the bank’s residential mortgage banking profit fell by $58 million, the largest decline by dollar amount of any of BB&T’s seven segments. Like at other banks, BB&T’s mortgage income has declined amid a slowdown in mortgage originations as interest rates rise, causing refinancing activity to wane.
Compared with a year ago, the bank saw an increase in profits in its community banking, dealer financial services, insurance services and treasury and corporate segments.
BB&T’s fourth quarter results were helped by a release of $70 million from reserves to cover loans that go bad. As borrowers do a better job of paying off their loans, banks have been able to increase their profits by pulling money from such reserves.
BB&T said its 2013 earnings of $1.6 billion would have set a record of $2.1 billion had it not lost a legal battle with the Internal Revenue Service over the bank’s use of foreign tax credits. The bank said its 2013 results were affected by a $516 million tax adjustment it had to make as a result of the U.S. Court of Federal Claims ruling against the bank in September.
Roberts: 704-358-5248; Twitter: @DeonERoberts
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