J.P. Morgan Comments On BBT 1Q, Anticipates Acquisitions

BB&T Corp. (NYSE: BBT) reported EPS of $0.32, “a penny above our estimate, marked by sharply lower credit costs, which were offset by weaker fee income (mainly mortgage banking) and core net interest income (ex purchase accounting accretion),” J.P. Morgan reports.

“Credit quality improved overall but was mixed in some metrics as NPLs held for investment rose 13% qoq,” J.P. Morgan writes. “However, another likely large NPL sale in 2Q should help reduce NPLs. BBT took another 15% mark on $500 mil of NPL sales in 1Q. Both total and commercial loans declined on period end basis as BBT saw slowdown in second half of 1Q, similar to some peers.

“However, purchase accounting accretion was higher than expected and as a result, BBT raised its reported NIM outlook for 2011. BBT stated on its call that it hopes to do one or two acquisitions this year and indicated that it will only consider sizable deals with assets over $3-4 bil.”

BB&T closed Thursday at $25.98.