A tax charge slashed BB&T's (BBT) first-quarter profit in half.
The Winston-Salem, N.C., company announced Thursday that it earned $210 million in the first quarter, compared with $431 million a year earlier, as it took a $281 million charge related to a tax dispute with the Internal Revenue Service. Per-share earnings of 29 cents were 2 cents below the expectation of analysts polled by Bloomberg.
The $281 million tax charge relates to a dispute with the IRS over foreign tax credits it claimed from Structured Trust Advantage Repackaged Securities transactions. BB&T said in February
Excluding the tax charge, BB&T's profit increased 14% compared with the first quarter of 2012, because of improved credit quality and a rise in fee and insurance income.
Noninterest income rose 15%, to $1 billion. Insurance income rose 35%, to $365 million, as the
Provision for loan losses fell 11%, to $1.8 billion, while net chargeoffs fell 18%, to $275 million. Nonperforming assets declined 37%, to $1.4 billion, or 0.8% of BB&T's $181 billion of total assets.
BB&T's net interest income was unchanged compared with the first quarter of 2012, at $1.5 billion, because of lower loan yields and a tightening of the net interest margin by 17 basis points, to 3.76%.