BBVA Compass Bancshares, Inc. reports first quarter 2014 earnings of $114 million

- Total loans end the quarter at $52.8 billion, up 15 percent from prior year levels
- Total deposits increase 9 percent to $57.1 billion, driven by a 19 percent increase in noninterest bearing deposits
- Key credit quality indicators continue to strengthen; nonperforming asset ratio drops to 0.95 percent from 1.93 percent, net charge-off ratio falls to 0.24 percent
- Stress tests results reflect strong capital position; regulatory capital ratios remain significantly above "well-capitalized" guidelines
- Robust loan demand drives balance sheet growth

PR Newswire

HOUSTON, April 30, 2014 /PRNewswire/ -- BBVA Compass Bancshares, Inc., a Sunbelt-based bank holding company (BBVA Compass), reported today net income attributable to shareholder of $114 million for the first quarter of 2014. This represented a 4 percent increase from the $110 million earned in the first quarter of 2013 and a 66 percent increase from the $69 million earned in the fourth quarter of 2013. Return on average assets and return on average tangible equity for the first quarter of 2014 were 0.64 percent and 7.18 percent, respectively.

"The strong balance sheet growth BBVA Compass delivered in the first quarter reflects the strength of our franchise, our relentless focus on our customers and our ability to quickly adapt our products and services to meet their changing needs," said Manolo Sanchez, chairman and CEO of BBVA Compass. "Momentum gained throughout 2013 continued as total loans increased 15 percent, fueled primarily by robust C&I demand. Deposit growth was also healthy, particularly noninterest bearing deposits which increased 19 percent."

Sanchez noted that with the low-interest rate environment continuing to impact revenue growth throughout the financial industry, improving operational efficiencies and disciplined expense management are priorities. Accordingly, total noninterest expenses declined 5 percent year-over-year. Credit quality metrics experienced further improvement as the nonperforming asset ratio dropped to 0.95 percent and net charge-offs as a percentage of average loans fell to 0.24 percent.

The announcement in late March that the Federal Reserve didn't object to BBVA Compass Bancshares, Inc.'s capital plan, and the acquisition of Portland, Ore.-based digital banking service pioneer Simple were among the highlights of the quarter, Sanchez said.  "The recently completed stress tests are further confirmation of our strong capital position, our ability to generate retained earnings and our capacity to absorb significant stress," he said. "At the same time, we also recognize the rapid technology-driven change that is transforming the financial services industry. Simple has created a customer experience unmatched in the digital banking world, and its acquisition is another example of our commitment to innovation and to providing our customers the ability to bank anytime, anywhere."

About BBVA Compass
BBVA Compass Bancshares, Inc. is a Sunbelt-based bank holding company whose lead subsidiary, BBVA Compass, operates 684 branches, including 352 in Texas, 89 in Alabama, 78 in Arizona, 62 in California, 45 in Florida, 38 in Colorado and 20 in New Mexico. BBVA Compass ranks among the top 25 largest U.S. commercial banks based on deposit market share and ranks among the largest banks in Alabama (2nd), Texas (4th) and Arizona (5th). BBVA Compass has been recognized as one of the leading small business lenders by the Small Business Administration and was recently awarded the 2013 Celent Model Bank Award for its new core banking platform. Additional information about BBVA Compass can be found under the Investor Relations tab at www.bbvacompass.com.

About BBVA Group
BBVA Compass Bancshares, Inc. is a wholly owned subsidiary of BBVA (BBVA) (BBVA.MA). BBVA is a customer-centric global financial services group founded in 1857. The Group has a solid position in Spain, is the largest financial institution in Mexico and has leading franchises in South America and the Sunbelt region of the United States. Its diversified business is geared toward high-growth markets and relies on technology as a key sustainable competitive advantage. Corporate responsibility is at the core of its business model. BBVA fosters financial education and inclusion, and supports scientific research and culture. It operates with the highest integrity, a long-term vision and applies the best practices. The Group is present in the main sustainability indexes. More information about the BBVA Group can be found at www.bbva.com.

Forward-Looking Statements 
Certain statements in this press release may contain forward-looking statements about the Company and its industry that involve substantial risks and uncertainties. Statements other than statements of current or historical fact, including statements regarding our future financial condition, results of operations, business plans, liquidity, cash flows, projected costs, and the impact of any laws or regulations applicable to the Company, constitute forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Words such as "anticipates," "believes," "estimates," "expects," "forecasts," "intends," "plans," "projects," "may," "will," "should," and other similar expressions are intended to identify these forward-looking statements. These forward-looking statements reflect the Company's views regarding future events and financial performance. Such statements are subject to risks, uncertainties, assumptions and other important factors, many of which may be beyond the Company's control, that could cause actual results to differ materially from anticipated results. If the Company's assumptions and estimates are incorrect, or if the Company becomes subject to significant limitations as the result of litigation or regulatory action, then the Company's actual results could vary materially from those expressed or implied in these forward-looking statements. The forward-looking statements are and will be based on the Company's then current views and assumptions regarding future events and speak only as of their dates made. The Company assumes no obligation to update any forward-looking statement, whether as a result of new information, future events, or otherwise, except as required by securities law. For further information regarding risks and uncertainties associated with the Company's business, please refer to the "Risk Factors" section of the Company's Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission on March 28, 2014.


BBVA COMPASS BANCSHARES, INC.

(Unaudited)

(In thousands)


















Three Months




Ended March 31


%


2014


2013


Change

EARNINGS SUMMARY








Net interest income

$

495,299


$

522,946


(5)

Noninterest income [a]


203,352



191,529


6

 Total revenue [a]


698,651



714,475


(2)

Investment securities gain, net


16,434



14,955


10

Loss on prepayment of FHLB advances


(458)



(1,107)


(59)

Provision for loan losses


37,266



19,615


90

Noninterest expense


518,867



545,665


(5)

 Pretax income


158,494



163,043


(3)

Income tax expense


43,567



52,507


(17)









Net income


114,927



110,536


4









Net income attributable to noncontrolling interests


453



393


15









Net income attributable to shareholder

$

114,474


$

110,143


4

























SELECTED RATIOS








Return on average assets


0.64

%


0.64

%


Return on average tangible equity [b]


7.18



7.47



Average common equity to average assets


15.83



15.96



Average loans to average total deposits


94.08



87.70



Tier I capital ratio


11.52



11.86



Total capital ratio


13.63



14.44



Leverage ratio


9.88



9.48























Average for Three Months





Ending Balance





Ended March 31


%



March 31


%



2014



2013


 Change 



2014


2013


Change

BALANCE SHEET HIGHLIGHTS















Total loans


$ 51,943,121



$ 45,656,547


14



$ 52,795,787


$ 45,786,302


15

Total investment securities


10,196,527



10,206,331


-



10,027,118


10,392,900


(4)

Earning assets


62,245,698



55,994,068


11



62,930,076


56,304,430


12

Total assets


73,359,144



69,855,226


5



74,957,227


69,745,346


7

Noninterest bearing demand deposits


15,652,987



13,753,943


14



16,322,699


13,688,429


19

Interest bearing transaction accounts


27,073,002



25,890,620


5



27,987,795


26,317,652


6

Total transaction accounts


42,725,989



39,644,563


8



44,310,494


40,006,081


11

Total deposits


55,209,690



52,057,560


6



57,085,210


52,378,931


9

Shareholders' equity


11,615,847



11,148,896


4



11,729,834


11,181,732


5































[a]  Excludes net gain on sales of investment securities and loss on prepayment of FHLB advances.

[b]  Excludes amortization of intangibles, net of tax, and intangible assets.



BBVA COMPASS BANCSHARES, INC.


(Unaudited)


(In thousands)




















2014


2013




Mar 31


Dec 31


Sep 30


Jun 30


Mar 31


NONPERFORMING ASSETS












Nonaccrual loans


$     388,597


$     441,718


$     543,902


$     589,468


$     683,684


Loans 90 days or more past due [a]


83,490


82,814


98,035


121,215


127,507


TDRS 90 days or more past due


204


1,317


739


363


139


   Total nonperforming loans [b]


472,291


525,849


642,676


711,046


811,330


Other real estate owned, net (OREO)


25,817


23,228


41,493


52,798


69,543


Other repossessed assets


3,313


3,360


3,896


3,224


4,511














   Total nonperforming assets


$     501,421


$     552,437


$     688,065


$     767,068


$     885,384














TDRs accruing and past due less than 90 days


$     202,075


$     208,391


$     225,961


$     243,009


$     246,712














Covered loans [c]


701,158


734,190


832,884


915,755


1,142,321


Covered nonperforming loans [c]


63,664


62,038


76,301


99,480


102,876


Covered nonperforming assets [c]


3,836


4,113


13,319


19,422


23,602














Total nonperforming loans as a % of loans


0.89

%

1.03

%

1.30

%

1.49

%

1.77

%

Total nonperforming loans as a % of loans, excluding covered loans


0.78


0.93


1.16


1.31


1.59


Total nonperforming assets as a % of loans and OREO


0.95


1.09


1.39


1.61


1.93


Total nonperforming assets as a % of loans and OREO, excluding covered assets

0.83


0.97


1.23


1.39


1.70














[a] Excludes loans classified as trouble debt restructuring (TDRs)

[b] Includes loans held for sale

[c] Covered assets includes loans and OREO acquired from the FDIC subject to loss sharing agreements















Three Months Ended




2014


2013




Mar 31


Dec 31


Sep 30


Jun 30


Mar 31


ALLOWANCE FOR LOAN LOSSES












Balance at beginning of period


$     700,719


$     717,937


$     723,511


$     786,018


$     802,853


Net charge-offs (NCO)


30,320


43,378


43,108


86,744


36,450


Provision for loan losses


37,266


26,160


37,534


24,237


19,615


Balance at end of period


$     707,665


$     700,719


$     717,937


$     723,511


$     786,018














Allowance for loan losses as a % of total loans


1.34

%

1.38

%

1.45

%

1.52

%

1.72

%

Allowance for loan losses as a % of nonperforming loans [a]


149.84


133.25


111.71


101.75


96.88


Allowance for loan losses as a % of nonperforming assets [a]


141.13


126.84


104.34


94.32


88.78


Annualized as a % of average loans:












   NCO - QTD


0.24


0.34


0.35


0.74


0.32


   NCO - YTD


0.24


0.44


0.47


0.54


0.32














[a] Includes loans held for sale that are on nonaccrual status


BBVA COMPASS BANCSHARES, INC.

(Unaudited)

(In thousands)

































Three Months Ended March 31



2014


2013

YIELD/RATE ANALYSIS


Average


Income/


Yield/



Average


Income/


Yield/


  (Taxable Equivalent Basis)


Balance


Expense


Rate



Balance


Expense


Rate


Assets















Earning assets:















   Loans


$  51,943,121


$    520,592


4.06

%

$  45,656,547


$    548,023


4.87

%

   Investment securities held to maturity


1,505,398


10,373


2.79



1,491,477


10,853


2.95


   Investment securities available for sale [a]


8,652,584


50,994


2.39



8,521,274


49,148


2.34


   Other earning assets


106,050


566


2.16



131,190


780


2.41

















        Total earning assets [a]


62,207,153


582,525


3.80



55,800,488


608,804


4.42


Allowance for loan losses


(702,748)







(800,282)






Unrealized gain (loss) on securities















   available for sale


38,545







193,580






Other assets


11,816,194







14,661,440





















          Total assets


$  73,359,144







$  69,855,226





















Liabilities and Shareholders' Equity















Interest bearing liabilities:















   Interest bearing demand deposits


$    7,491,112


2,997


0.16



$    6,832,762


2,834


0.17


   Savings and money market accounts


19,581,890


15,666


0.32



19,057,858


21,342


0.45


  Certificates and other time deposits


12,360,560


34,491


1.13



12,283,729


32,155


1.06


  Foreign office deposits


123,141


62


0.20



129,268


80


0.25


 Total interest bearing deposits


39,556,703


53,216


0.55



38,303,617


56,411


0.60


FHLB and other borrowings


4,289,004


16,364


1.55



4,221,034


15,792


1.52


Federal funds purchased and securities















  sold under agreement to repurchase


941,171


500


0.22



1,109,300


580


0.21


Other short-term borrowings


12,553


26


0.84



10,881


72


2.68


Total interest bearing liabilities


44,799,431


70,106


0.63



43,644,832


72,855


0.68


Noninterest bearing deposits


15,652,987







13,753,943






Other noninterest bearing liabilities


1,290,879







1,307,555






Total liabilities


61,743,297







58,706,330






Shareholders' equity


11,615,847







11,148,896






Total liabilities and shareholders' equity


$ 73,359,144







$  69,855,226






Net interest income/net interest spread




$    512,419


3.17

%



$    535,949


3.74

%

Net interest margin






3.34

%





3.90

%

 Total taxable equivalent adjustment




17,120







13,003



















     Net interest income




$    495,299







$    522,946


































[a]  Excludes adjustment for market valuation.


BBVA COMPASS BANCSHARES, INC.

(Unaudited)

(In thousands)





































Three Months




Three Months Ended



Ended March 31


%


2014


2013



2014


2013


Change


Mar 31


Dec 31


Sep 30


Jun 30


Mar 31

NONINTEREST INCOME


































Service charges on deposit accounts


$       53,391


$      55,488


(4)


$   53,391


$   56,812


$   54,229


$      54,884


$     55,488

Card and merchant processing fees


24,304


24,624


(1)


24,304


25,320


26,132


26,113


24,624

Retail investment sales


26,564


24,379


9


26,564


25,552


22,034


25,311


24,379

Asset management fees


10,758


10,069


7


10,758


9,796


10,438


10,636


10,069

Corporate and correspondent investment sales


8,656


9,396


(8)


8,656


8,720


8,011


9,547


9,396

Mortgage banking income


4,276


11,470


(63)


4,276


3,178


7,610


13,141


11,470

Bank owned life insurance


3,967


4,405


(10)


3,967


4,846


4,222


4,274


4,405

Other income


71,436


51,698


38


71,436


56,850


78,309


64,150


51,698




















203,352


191,529


6


203,352


191,074


210,985


208,056


191,529

Investment securities gain, net


16,434


14,955


10


16,434


(1,659)


-


18,075


14,955

Gain (loss) on prepayment of FHLB and other borrowings


(458)


(1,107)


(59)


(458)


-


-


22,882


(1,107)

     Total noninterest income


$     219,328


$     205,377


7


$ 219,328


$ 189,415


$ 210,985


$    249,013


$   205,377



































NONINTEREST EXPENSE


































Salaries, benefits, and commissions


$     262,569


$     251,323


4


$ 262,569


$ 261,643


$ 244,373


$    247,905


$   251,323

FDIC indemnification expense


31,618


86,307


(63)


31,618


55,453


55,064


70,335


86,307

Equipment 


53,738


47,615


13


53,738


59,070


50,483


50,891


47,615

Professional services


46,399


39,274


18


46,399


58,204


44,195


49,729


39,274

Net occupancy 


38,957


37,894


3


38,957


40,115


39,257


40,471


37,894

Marketing 


8,524


9,068


(6)


8,524


9,212


9,146


9,926


9,068

Communications


6,347


6,811


(7)


6,347


7,392


7,080


4,682


6,811

Amortization of intangibles


12,534


16,040


(22)


12,534


14,305


14,884


15,462


16,040

Other expense


58,181


51,333


13


58,181


71,277


57,657


65,299


51,333



































     Total noninterest expense


$     518,867


$     545,665


(5)


$ 518,867


$ 576,671


$ 522,139


$    554,700


$   545,665

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