BB&T said Thursday that it earned $501 million in the first quarter, up 139 percent from the same period a year ago.
But the 69 cents per share the Winston-Salem bank posted fell short of analysts’ expectations, and BB&T shares fell more than 3.5 percent in trading Thursday, closing at $37.93.
Like many regional banks, BB&T struggled to bring in revenue amid low interest rates and stagnant consumer loan demand. Revenue fell nearly 7 percent, to $2.3 billion. BB&T also joined the line of banks hit hard by a decline in mortgage banking income. The bank brought in $74 million from mortgage banking, down nearly 60 percent from last year.
Executives at Wells Fargo, the nation’s largest home lender, and Bank of America each pointed to signs of a potential turnaround in the mortgage market in the coming months. CEO Kelly King told analysts that BB&T hasn’t yet seen much of a pickup in mortgage demand.
Never miss a local story.
Last year’s first quarter results were hit by a $281 million tax-related provision. The bank took the charge as it battled the Internal Revenue Service over use of foreign tax credits. BB&T ultimately lost the case.
BB&T also plans to increase its quarterly dividend from 23 cents per share to 24 cents, the bank said.
Since the financial crisis, the country’s largest banks have had to gain approval from the Federal Reserve to increase their dividend or to buy back more stock. Last year, regulators rejected BB&T’s dividend plan based on an assessment of its risk management.
King told analysts on a conference call that the bank didn’t want to chance a repeat this year.
“To be very honest, coming off of our negative experience last year, my strategy was to be absolutely very conservative and take no risk with regard to this process,” he said, according to a transcript from Bloomberg.