Among other large regional lenders, two stand out with stronger third-quarter loan growth. However, the comparisons are not necessarily fair, considering their differing geographic footprints.
(USB - Get Report)
of Minneapolis on Wednesday reported
core loan growth of 2.2%
during the third quarter from the second quarter, with average loans growing 7.5% year over year.
(HBAN - Get Report)
of Columbus, Ohio, on Thursday reported sequential
of 2% during the third quarter, with average loans growing 5% year over year.
"BB&T posted solid results in a challenging environment this quarter," said CEO Kelly King in the company's earnings release. "Our 7% [year-over-year] growth in adjusted earnings was driven by a substantial improvement in credit quality to the best levels in almost six years," he said.
King said that BB&T was "pleased to achieve 3% [annualized] loan growth in a sluggish economic environment," and added that "While average total deposits were lower this quarter, noninterest-bearing deposits grew 8% annualized consistent with our mix improvement goals."
BB&T's coveted noninterest bearing deposits totaled $34.846 billion as of Sept .30 and made up 27% of total deposits as of Sept. 30, increasing from 24% a year earlier.
Jefferies analyst Ken Usdin, in a note to clients following the earnings release, called BB&T's third-quarter results "a bit soft," and predicted Thursday's market reaction would "be dictated by [management's] commentary on the expense trajectory" during the earnings conference call with analysts," which started at 8 a.m. EDT.
Usdin wrote that BB&T's "affiliate restructuring, along with lower future mortgage-related and regulatory costs, should provide a path for additional improvement over the next few quarters."
He rates BB&T a "hold," with a price target of $36.00.
BB&T's shares were down 1% in premarket trading to $33.92.
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-- Written by Philip van Doorn in Jupiter, Fla.