fully endorse shares of BB&T ahead of the bank's second-quarter earnings report. My recommending the stock as a "hold" turned out to be a good call. While I'm still not ready to buy this stock at these levels, I'm willing to concede that progress is being made. high-profile banks such as JPMorgan Chase ( JPM) and Bank of America ( BAC), I've taken a different perspective on BB&T. For instance, it didn't bother me as much that BB&T only posted 1% year-over-year growth in revenue. Soft revenue has been a consistent trend within the sector. Besides, the 1% increase was still enough to beat Street estimates by as much as 3%. Elsewhere, BB&T posted a net interest margin (NIM) of 3.4%. It's not a great number, especially when considering that NIM was six basis points worse than the April quarter. But on a relative basis, that number held its own against money-center giant Wells Fargo ( WFC), which posted a NIM of 3.46%. It was also a pleasant surprise that BB&T's posted 7% sequential increase in adjusted income, helped by a better-than-expected performance in its fee businesses. If you've been following my articles of late, fee income has been a struggle across each of the "big four" banks, including Citigroup ( C). While the entire sector struggled with mortgage lending, as did BB&T (down roughly 7%), BB&T is finding ways to offset the sluggishness in other areas such as insurance, which generated roughly 40% to BB&T's fee income. In that regard, management deserves plenty of credit. But it wasn't all good news.
My prior concern about PPNR hasn't improved. While BB&T's overall operation seems more stabilized, it's nonetheless hard to defend how badly BB&T missed. Depending on whose estimates you're following, the PPNR shortfall was as high 8 cents. This seems to be a recurring theme. I'm not going to ignore that the 5% sequential increase in expenses didn't have a hand in the PPNR miss. This brings up an interesting situation, however, and I don't want to speak out of both sides of my mouth. I know I've been praising the likes of JPMorgan and Wells Fargo, which have executed strongly due, in part, to conservative cost-cutting measures. I've said this while offering the caveat of how difficult it is to cut expenses while still trying to grow in a competitive banking environment. So with that in mind, I'm willing to excuse BB&T here for the rise in expenses. Nor should it be an automatic slap on the wrist any time a bank's expenses rise. What's more, it doesn't escape me that the 5% increase in expenses coincided with BB&T's 3% beat on revenue. Equally impressive was the 4% year-over-year growth in loans. It's not a breathtaking number. But it also means that BB&T is not lagging behind its peers. Follow @saintssense This article was written by an independent contributor, separate from TheStreet's regular news coverage.