BB&T Plans Geographic, Floorplan Growth
BB&T’s Dealer Financial Services unit is in growth mode. This year, the auto finance group plans to expand its Regional Acceptance indirect lending subsidiary in Connecticut, Oregon, Tennessee, and California. The bank is also focused on increasing wholesale lending, it revealed in an earnings report today.
Specifically, BB&T intends to partner with its Community Banking division to increase indirect and dealer wholesale lending through new and expanded relationships with franchise auto dealers throughout the bank’s footprint.
In the past year, BB&T’s average dealer floorplan loans shot up 98.9% to $394 million in the final quarter of 2013.
Overall, the bank’s auto loan portfolio grew 22.1% to $9.4 billion in 4Q13, from $7.7 billion in 4Q12. The average sales finance portfolio increased $270 million, or 11.9% annualized, based on continued strength in the prime auto lending market.
Here are some other 4Q13 stats, as compared with 4Q12:
- Net income was $49 million, up 22.5% from $40 million.
- Loan originations grew 14.5% to $1.2 billion.
- Loan yields were 7.34%, down from 8.37%.
- Net charge offs increased to 1.77% from 1.59%
Later, during the company’s earnings call, Chief Risk Officer Clarke Starnes said that from a credit quality perspective, the bank was being very disciplined. Here are his comments, according to a transcript on SeekingAlpha.com:
While auto sales have driven big originations, we’ve avoided the temptation to extend term or lower advance rates or allow increased backing of a lot of those structural elements which we do see in the marketplace. We have not changed our underwriting so that will naturally impact our volume if others chose — or choose to go that route. And then — so the bigger consideration for us is if — whether we can get an appropriate margin. And right now, we still feel that the pricing we’re doing, that is still attractive for us, but we’re going to stay very disciplined about that risk-and-return decision.
