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BB&T's Earnings Rise on Lower Credit Costs

"Looking ahead to 2014, we are optimistic about a number of initiatives that will help drive performance," BB&T CEO Kelly King said in the company's earnings release. "We recently announced an agreement to acquire 21 retail branches in Texas that will accelerate the growth of our franchise in these fast growing markets. We also continue to expand our wealth, corporate banking, insurance and specialized lending businesses," he added.

Jefferies analyst Ken Usdin in a note to clients on Thursday called BB&T's top-line results "a bit soft."

"We peg operating EPS at $0.73 excluding the loan sale gain and merger charges. In our view, the quarter beat consensus of $0.72 but in a "low-quality" way. Lower-than-expected provision expense helped offset lower purchase accounting accretion and soft insurance revenues. Otherwise, expenses were well-controlled and capital accretion was robust," Usdin wrote.

The analyst rates BB&T a "hold," with a price target of $40.00.

BB&T's shares were slightly higher in premarket trading to $38.85.

The following chart shows the performance of BB&T's stock against the KBW Bank Index (I:BKX) and the  S&P 500 (^GSPC) since the end of 2011:

BBT Chart data by YCharts


-- Written by Philip van Doorn in Jupiter, Fla.

Philip W. van Doorn is a member of TheStreet's banking and finance team, commenting on industry and regulatory trends. He previously served as the senior analyst for Ratings, responsible for assigning financial strength ratings to banks and savings and loan institutions. Mr. van Doorn previously served as a loan operations officer at Riverside National Bank in Fort Pierce, Fla., and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a bachelor of science in business administration from Long Island University.
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