BB&T 2015 Annual Report Download - page 46

TableofContents
Other, Treasury & Corporate
Other, Treasury & Corporate generated a net loss of $48 million in 2015, compared to net income of $137 million in 2014.
Segment net interest income decreased $62 million to $339 million, driven by lower average PCI loan balances as well as lower yields on the securities
portfolio, partially offset by higher funding spreads on deposits. Noninterest income increased $79 million, primarily due to improved FDIC loss share
income, partially offset by the loss on the previously discussed sale of American Coastal.
The allocated provision for credit losses reflected a benefit of $15 million in 2015, compared to a benefit of $66 million in 2014, primarily due to a release in
the RUFC in the earlier period driven by improvements related to the mix of unfunded lending exposures and a lower provision benefit for PCI loans
attributable to improvements in credit quality in the earlier period.
Noninterest expense increased $365 million, driven by higher salary, employee insurance and pension expense, partially attributable to the Susquehanna
acquisition, as well as higher IT professional services and software expense, franchise taxes and merger-related charges. In addition, noninterest expense for
the current year includes the previously discussed $172 million loss on early extinguishment of FHLB advances, compared to a similar loss of $122 million
in the prior year. Intersegment net referral fee expenses decreased $22 million driven largely by higher mortgage loan referrals shared by other segments.
Amortization of intangibles increased $25 million primarily due to core deposit intangible amortization for acquisitions occurring during 2015. Allocated
corporate expense decreased $53 million compared to the earlier period as a result of higher expense allocations to the other segments related to internal
business initiatives and the continued centralization of certain support functions into the respective allocated corporate centers.
2014 compared to 2013
Community Banking
Community Banking had a network of 1,839 banking offices at the end of 2014, an increase of 14 offices compared to December 31, 2013. During the second
quarter of 2014, BB&T completed the acquisition of 21 branches in Texas, which included $1.2 billion in deposits and $112 million in loans. The increase in
offices was primarily driven by the acquisition, partially offset by the closure of certain lower volume branches.
Community Banking net income was $910 million in 2014, an increase of $26 million, or 2.9%, compared to 2013. Segment net interest income totaled $2.9
billion, a decrease of $134 million compared to 2013, primarily due to lower yields on new loans and lower funding spreads earned on deposits, partially
offset by loan and noninterest-bearing deposit growth. Noninterest income of $1.2 billion increased $4 million, primarily due to higher service charges on
deposits, checkcard fees and bankcard fees.
The allocated provision for credit losses decreased $156 million driven by lower business and consumer loan charge-offs, partially offset by stabilization in
loss factors. Noninterest expense totaled $1.4 billion for 2014. The $145 million decrease was primarily attributable to lower personnel, occupancy and
equipment and professional services expense and lower restructuring charges. Intersegment net referral fees decreased $58 million driven by lower mortgage
banking referrals. Allocated corporate expenses increased $81 million, primarily driven by internal business initiatives, including the implementation of the
ERP system.
Residential Mortgage Banking
Residential Mortgage Banking net income was $204 million in 2014, a decrease of $179 million, or 46.7%, compared to 2013. Mortgage originations totaled
$17.4 billion in 2014, a decrease of $14.2 billion compared to $31.6 billion in 2013. BB&T’s residential mortgage servicing portfolio, which includes both
retained loans and loans serviced for others, totaled $122.3 billion at the end of 2014, compared to $121.2 billion at the end of 2013.
Segment net interest income decreased $87 million to $498 million, primarily the result of lower average loan balances. Noninterest income decreased $171
million driven by lower gains on residential mortgage loan sales due to lower origination volume and tighter pricing due to competitive factors. This
decrease was partially offset by an increase in net servicing income of $31 million, primarily due to slower prepayment speeds and a $2.8 billion, or 3.2%,
increase in the investor-owned servicing portfolio.
41
Source: BB&T CORP, 10-K, February 25, 2016 Powered by Morningstar® Document Research℠
The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,
except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.