BB&T Corporation (NYSE:BBT) Q4 2017 Earnings Conference Call - Final Transcript
Jan 18, 2018 • 08:00 am ET
Kelly S. King
We were particularly pleased with our credit quality, which was 36 basis points, below our range of 40 to 50. Our margin was as we expected. Net income, net interest income was down a little bit. We have said stable, so that's actually in that category. Non-interest income was kind of a nice improvement. We've said it will be up slightly and so 5.4%. And again, we did -- I say, we would expect to achieve positive operating leverage and we did. So, we felt good about the guidances that we had given. If you look at Page 7, in terms of our loan growth, I'd call it strong core loan growth. You know over the last year, we've had to explain away the fact that we've been making long-term strategic changes in a couple of our key portfolios, auto and mortgage. It was the right thing to do.
But the good news is, it is nearing an end. So if you look at that slide, you'll see that our subtotal commercial was up. And let me point out that these numbers you're seeing do represent some changes we made in terms of our loan presentation to better reflect our business, primarily between commercial and retail. I don't think it's too confusing, but if you want details, there's a map in the appendix that shows you exactly how these items map over. But essentially, it's basically just clarifying all commercial as commercial and all retail as retail and I think that will be cleaner for you as we go forward.
But as I indicated earlier, we had strong core long growth of 3.9% versus the third quarter. We've had some very strong individual areas, like, commercial leases were up 27.3% annualized, dealer floor plan up 22.9%, government finance, up 17% and revolving credit, up 13.5%. So, we did have a decline in retail of 4.6% annualized, but again that was by design. I would point out that we are nearing the end of this optimization process. We expect retail runoff to begin to stabilize and grow in the first quarter from -- primarily from the mortgage area and in the second quarter, we expect the auto portfolio to turn.
So, kind of by the end of the first half, we'll be clearly growing both of our portfolios and then our blended average will be somewhere between the first and second quarter. But the main thing is the pain of most of that is over and as we go forward over the rest of this year and into next year, you will see our loan growth, I think, meaningfully increase, because of that painful process we needed to go through, but good process from a long term strategic point of view.
If you look at Page 8, I just point out that DDA continues to do great, growing 5.9%. Our percentage of DDA to total deposits was up 34.4% from 34%. I'll just remind you that if you go back over