WINSTON-SALEM, N.C. (AP) -- BB&T Corp. said Thursday that its net income fell by about half in the first quarter because of a big charge it took for setting aside money to cover a disputed tax liability.
BB&T runs more than 1,800 banks in 12 states, mostly in the Southeast. The bank said that conditions for lending had been "challenging," and average loans decreased. But the bank said there was improvement later in the quarter and it expects loan growth in the current period.
The company said improving credit quality allowed it to set aside $38 million, or 13 percent, less for a provision for soured loans. Charge-offs also dropped.
BB&T's quarterly income fell to $210 million, or 29 cents per share, from $431 million, or 61 cents per share. If the tax adjustment is excluded the company said it earned 69 cents per share in the latest quarter. Revenue rose to $2.46 billion from $2.34 billion.
Results matched expectations of analysts polled by FactSet.
The $281 million tax charge had been announced in February. The company said then that the charge was to cover a dispute with the Internal Revenue Service. BB&T wants to recover an $892 million payment it made in 2010 and has sued the agency to get a refund.
As a result of the Federal Reserve's bank "stress tests" in March, BB&T was told it cannot go through with any dividend increases and share buybacks. BB&T did not say why the Fed rejected its plan, but said it would resubmit its capital plan to address some of the issues the Fed raised.
Shares of BB&T dropped 38 cents, or 1.3 percent, to $29.65 in morning trading. The stock has ranged from $26.66 to $34.37 in the past 12 months.
- Investment & Company Information