BB&T Corp. said Thursday its profits rose 7.1 percent in the second quarter from a year ago, but a key measure of profitability declined.
The Winston-Salem-based bank, the third-largest in the Charlotte region, reported $454 million in net income available to common shareholders, compared with $424 million in the same period a year earlier. On a per-share basis, adjusted earnings rose to 69 cents, in line with the average analyst estimate and up from 58 cents a year ago.
BB&T said its results were affected in part by $25 million in pre-tax merger-related charges. During the quarter, the bank completed its purchase of Bank of Kentucky Financial Corp. Earlier this month, BB&T announced that it received regulatory approval for its planned acquisition of Pennsylvania-based Susquehanna Bancshares.
The bank said its second-quarter results were also impacted by a $34 million after-tax loss on its sale of subsidiary American Coastal Insurance Co. That deal was announced in April.
Like banks everywhere, BB&T is challenged to grow revenue at a time when low interest rates continue to squeeze lenders’ net interest margins – the difference between what banks pay for deposits and charge for loans. The margin is a closely watched measure of banks’ lending profitability.
BB&T said its net interest margin narrowed to 3.27 percent in the second quarter, compared with 3.33 percent in the first quarter and 3.43 percent a year ago.
The bank reported revenue in the second quarter of $2.4 billion, up 1.3 percent from the same quarter last year as its noninterest income rose primarily from higher mortgage banking income.
“We are pleased to report solid results for the quarter, led by improved loan growth and strong credit quality,” CEO Kelly King said in a statement. “We completed several strategic transactions during the second quarter and reached an important milestone with the recent approval of the Susquehanna merger.”
BB&T shares closed at $41.55 Thursday, down less than 1 percent.
In the Charlotte region, BB&T is behind No. 1 Bank of America and No. 2 Wells Fargo in rankings of market share by deposits.