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BBVA Compass reports third quarter results

HOUSTON, Oct. 27, 2017 /PRNewswire/ --

  • Quarterly net income totals $130 million; includes $60 million (pre-tax) of provision expense related to Hurricanes Harvey and Irma
    • Net income up 8 percent from a year ago and 45 percent on a year-to-date basis
    • Return on average assets and return on average tangible equity1 for the quarter were 0.59 percent and 6.40 percent, respectively
  • Total revenue increases 8 percent from prior year levels and 6 percent (annualized) from 2Q17 levels
    • Net interest income (NII) increases $75 million or 14 percent from a year ago
    • Net interest margin (FTE) increases 51 basis points from prior year and up 47 basis points on a year-to-date basis
  • Noninterest expense growth well contained at 3 percent, flat on a year-to-date basis
  • Positive operating leverage leads to record quarterly operating income1 of $273 million, up 23 percent from 3Q16 levels and 22 percent on a year-to-date basis
  • Strong loan pipeline results in targeted balance sheet growth
    • Average total loans of $60.3 billion down 1 percent from prior year but up 2 percent (annualized) on a linked quarter basis
    • Newly funded customer loans of $12.5 billion in 2017, up 13 percent from year ago levels
    • Average total deposits of $65.6 billion down 4 percent from prior year
      • Average noninterest bearing deposits up 2 percent
      • Noninterest bearing deposits represent 32 percent of average total deposits
  • Key credit quality indicators show continued improvement
    • Nonaccrual loans drop 12 percent from 2Q17 levels led by a 17 percent decline in energy portfolio nonaccrual loans
    • Nonperforming loan ratio at 1.18 percent, down 19 basis points from 2Q17
    • Allowance to loan ratio at 1.41 percent and coverage ratio at 119 percent

BBVA Compass Bancshares, Inc., a Sunbelt-based bank holding company (BBVA Compass), reported today net income of $130 million for the third quarter of 2017, an 8 percent increase from the $120 million earned during the third quarter of 2016. Included in third quarter 2017 results is approximately $60 million (pre-tax) of provision expense related to Hurricanes Harvey and Irma. Return on average assets and return on average tangible equity1 for the third quarter of 2017 were 0.59 percent and 6.40 percent, respectively.

Net income for the first nine months of 2017 totaled $409 million, an increase of 45 percent from the $282 million earned during the first nine months of 2016. Return on average assets and return on average tangible equity1 for the first nine months of 2017 were 0.62 percent and 6.87 percent, respectively.

"Our ability to deliver another solid quarter while navigating the devastating impact of not one but two hurricanes is a testament to the strength and resiliency of the team we've built at BBVA Compass," said Onur Genç, president and CEO of BBVA Compass. "While the safety and well-being of everyone impacted, including many of our own employees, was our top priority, we also recognized the need for our customers to have access to their banking accounts and the emphasis we've placed on building robust digital capabilities was certainly helpful during this time. Our attention now is focused on the recovery process and both BBVA Compass and our parent company, BBVA, have committed help in supporting these efforts."

"Overall, results for the quarter and the underlying trends were very positive," Genç noted. "Revenue growth was solid, particularly with respect to net interest income, while higher investment banking activity drove fee income growth from second quarter levels. While we did incur higher provision expense as a result of the hurricanes, underlying trends in our loan portfolio resulted in a significant improvement in many of our key credit quality measures. Increasing activity and building momentum for next year is our primary focus as we head into the final quarter of 2017."

"The increase in net interest income certainly reflects the benefit of higher short-term interest rates and the interest rate sensitive position of our balance sheet, which positively impacted earning asset yields, particularly loan yields," Genç noted. "At the same time, it also reflects our continued efforts focused on prudently managing spreads and maintaining a disciplined deposit pricing strategy."

Total revenue for the quarter was $844 million, an increase of 8 percent from third quarter 2016 levels and an increase of $12 million or 6 percent (annualized) on a linked-quarter basis with the second quarter of 2017. Revenue growth was driven by an increase in net interest income. Net interest income totaled $589 million, an increase of $75 million or 14 percent from the third quarter of 2016. The percent net interest margin in the third quarter was 3.13 percent, up 51 basis points from the third quarter of 2016. On a year-to-date basis, the percent net interest margin was 3.07 percent, an increase of 47 basis points compared to the same timeframe a year ago.

Noninterest income for the quarter totaled $255 million, a decrease of 3 percent compared to the $264 million recorded in the third quarter of 2016. Positive performances in asset management fees, service charges on deposit accounts, and card and merchant processing fees were offset by more interest rate and market sensitive fee-based businesses. Conversely, on a linked quarter basis noninterest income was up 14 percent (annualized) primarily as a result of strong performance in investment banking and advisory fees.

Noninterest expense totaled $574 million, an increase of 3 percent compared to the year ago quarter. Included in noninterest expense in the third quarter of 2017 is approximately $4 million of expenses associated with Hurricanes Harvey and Irma related to property damage not covered by insurance and relief efforts and commitments made to employees and charitable organizations. Overall expense growth has been well-contained and on a year-to-date percentage basis is flat compared to the same period a year ago.

"While overall balance sheet growth has been somewhat muted given our focus on managing spreads and optimizing capital consumption, our loan pipeline is strong," Genç noted. "During the first nine months we funded $12.5 billion of customer loans, an increase of 13 percent compared to the same time last year. Particularly encouraging this quarter has been the results of our Express Personal Loan product, an uncollateralized consumer loan that is designed to provide same day approval and funding when applied for on-line. We believe the success of this product provides us a roadmap that has proven to work in the digital space."

Average total loans for the third quarter of 2017 were $60.3 billion, a 2 percent (annualized) increase on a linked quarter basis and a 1 percent decrease from the third quarter of 2016. During the third quarter, approximately $5 billion of customer loans were funded, a 46 percent increase from the third quarter a year ago. Average total deposits for the quarter decreased 4 percent to $65.6 billion, primarily as a result of a decrease in higher rate deposits. At the same time, average noninterest bearing demand deposits increased 2 percent and now represents 32 percent of average total deposits.

Notwithstanding the additional provision expense associated with the hurricanes, key credit quality indicators continued to improve, repeating the trend of the past several quarters. Nonperforming loans totaled $711 million at the end of the quarter, a decrease of $110 million compared to second quarter 2017 and $272 million since the end of the fourth quarter of 2016. Nonperforming loans in the company's primarily reserved-based energy portfolio continued to decline, dropping $37 million during the quarter. Nonperforming loans as a percentage of total loans were 1.18 percent, down from 1.37 percent at the end of the second quarter of 2017 and 1.63 percent at year-end 2016. Net charge-offs as a percentage of average loans totaled 47 basis points in the quarter compared to 42 basis points in the second quarter of 2017. The allowance for loan losses as a percentage of total loans ended the quarter at 1.41 percent while the coverage ratio of nonperforming loans stood at 119 percent.

Total shareholder's equity at the end of the third quarter totaled $13.1 billion, a 2 percent increase from $12.8 billion at the end of the third quarter of 2016. The CET1 ratio rose to 12.07 percent2 at the end of the third quarter of 2017, up 58 basis points from the end of the fourth quarter of 2016 and 79 basis points from the end of the third quarter of 2016.

1 Operating income and average tangible equity are non-GAAP financial measures that we believe aid in understanding certain areas of our performance. The calculation of these measures is included on the page titled Non-GAAP Reconciliation.
2 Regulatory ratios at September 30, 2017, are estimated.

About BBVA Compass
BBVA Compass is a Sunbelt-based financial institution that operates 649 branches, including 336 in Texas, 89 in Alabama, 63 in Arizona, 61 in California, 45 in Florida, 37 in Colorado and 18 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 (SBA) and ranked 5th nationally in the total number of SBA loans originated in fiscal year 2016. Additional information about BBVA Compass can be found under the Investor Relations tab at bbvacompass.com, by following @BBVACompassNews on Twitter or visiting newsroom.bbvacompass.com.

About BBVA Group
BBVA [NYSE: BBVA] is a customer-centric global financial services group founded in 1857. The Group has a strong leadership position in the Spanish market, is the largest financial institution in Mexico, it has leading franchises in South America and the Sunbelt Region of the United States; and it is also the leading shareholder in Garanti, Turkey's biggest bank for market capitalization. Its diversified business is focused on high-growth markets and it 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. More information about BBVA Group can be found at bbva.com.

Forward-Looking Statements
Certain statements in this press release may contain forward-looking statements about BBVA Compass Bancshares, Inc. (the "Company") and its industry that involve substantial risks and uncertainties. The use of "we," "our" and similar terms refer to the Company. 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 or regulation. 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 (the "SEC") on March 1, 2017, as updated by our subsequent SEC filings.

BBVA COMPASS BANCSHARES, INC.

(Unaudited)

(Dollars in thousands)

















Three Months Ended September 30,


%


Nine Months Ended September 30,


%




2017


2016


Change


2017


2016


Change


EARNINGS SUMMARY














Net interest income


$ 589,361


$ 514,809


14


$ 1,726,622


$ 1,535,929


12


Noninterest income [a]


254,761


263,765


(3)


745,773


765,179


(3)


Total revenue [a]


844,122


778,574


8


2,472,395


2,301,108


7


Investment securities gain, net


3,033



NM


3,033


30,037


(90)


Provision for loan losses


103,434


65,107


59


228,858


265,025


(14)


Noninterest expense


573,962


556,271


3


1,695,759


1,689,452


-


Pretax income


169,759


157,196


8


550,811


376,668


46


Income tax expense


39,308


36,845


7


142,097


94,548


50


Net income


130,451


120,351


8


408,714


282,120


45


Net income attributable to noncontrolling interests


584


523


12


1,458


1,569


(7)


Net income attributable to BBVA Compass Bancshares, Inc.


$ 129,867


$ 119,828


8


$ 407,256


$ 280,551


45
















SELECTED RATIOS














Return on average assets


0.59 %


0.53 %




0.62 %


0.41 %




Return on average tangible equity [b]


6.40


6.21




6.87


4.92




Average common equity to average assets


14.74


13.84




14.56


13.64




Average loans to average total deposits


91.89


89.82




90.93


91.03




Common equity tier I capital (CET1) [c]


12.07


11.28




12.07


11.28




Tier I capital ratio [c]


12.43


11.64




12.43


11.64




Total capital ratio [c]


14.64


14.18




14.64


14.18




Leverage ratio [c]


10.00


9.08




10.00


9.08






Average for Three Months




Average for Nine Months




Ending Balance





Ended September 30,


%


Ended September 30,


%


September 30,


%



2017


2016


Change


2017


2016


Change


2017


2016


Change

BALANCE SHEET HIGHLIGHTS


















Total loans


$ 60,271,504


$ 61,060,433


(1)


$ 60,166,823


$ 61,867,590


(3)


$ 60,392,987


$ 60,313,126


Total investment securities


13,363,707


12,648,198


6


13,122,371


12,542,222


5


13,345,681


12,757,735


5

Earning assets


77,344,927


81,064,638


(5)


77,927,326


82,045,061


(5)


76,768,653


77,257,835


(1)

Total assets


87,299,979


90,900,339


(4)


87,482,356


91,878,427


(5)


85,683,660


89,356,838


(4)

Noninterest bearing demand deposits


21,072,789


20,715,562


2


20,922,150


20,432,380


2


21,094,235


20,585,598


2

Interest bearing transaction accounts


32,108,141


32,487,598


(1)


32,689,955


32,773,911



32,637,845


32,706,487


Total transaction accounts


53,180,930


53,203,160



53,612,105


53,206,291


1


53,732,080


53,292,085


1

Total deposits


65,589,724


67,979,739


(4)


66,166,611


67,967,135


(3)


67,213,567


67,587,337


(1)

Total shareholder's equity


13,130,915


12,810,740


2


12,997,116


12,763,461


2


13,115,903


12,819,190


2




















[a] Excludes net gain on sales of investment securities.

[b] Non-GAAP measure that we believe aids in understanding certain areas of our performance. The calculation of this measure is included on the page titled Non-GAAP Reconciliation.

[c] Current period regulatory capital ratios are estimated.

BBVA COMPASS BANCSHARES, INC.

(Unaudited)

(Dollars in Thousands)








2017


2016



September 30


June 30


March 31


December 31


September 30

NONPERFORMING ASSETS











Nonaccrual loans [a]


$ 666,812


$ 760,313


$ 825,988


$ 921,042


$ 1,086,018

Loans 90 days or more past due [b]


43,049


59,434


65,617


61,542


65,525

TDRs 90 days or more past due


963


969


1,185


589


618

Total nonperforming loans [a]


710,824


820,716


892,790


983,173


1,152,161

Other real estate owned, net (OREO)


22,012


22,965


25,113


21,112


21,670

Other repossessed assets


11,443


12,298


9,540


7,587


6,900

Total nonperforming assets


$ 744,279


$ 855,979


$ 927,443


$ 1,011,872


$ 1,180,731












TDRs accruing and past due less than 90 days


$ 95,521


$ 97,088


$ 128,558


$ 110,733


$ 116,941












Total nonperforming loans as a % of loans


1.18 %


1.37 %


1.49 %


1.63 %


1.91 %

Total nonperforming assets as a % of total loans, other real estate, and other repossessed assets


1.23


1.43


1.55


1.68


1.96














Three Months Ended



2017


2016



September 30


June 30


March 31


December 31


September 30

ALLOWANCE FOR LOAN LOSSES











Balance at beginning of period


$ 816,952


$ 834,106


$ 838,293


$ 862,080


$ 843,051

Net charge-offs (NCO)


71,267


62,439


84,326


61,351


46,078

Provision for loan losses


103,434


45,285


80,139


37,564


65,107

Balance at end of period


$ 849,119


$ 816,952


$ 834,106


$ 838,293


$ 862,080












Allowance for loan losses as a % of total loans


1.41 %


1.36 %


1.40 %


1.40 %


1.43 %

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


119.46


99.54


93.43


85.26


74.82

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


114.09


95.44


89.94


82.85


73.01












Annualized as a % of average loans:











NCO - QTD


0.47


0.42


0.57


0.40


0.30

NCO - YTD


0.48


0.49


0.57


0.37


0.36












[a] Includes loans held for sale.

[b] Excludes loans classified as troubled debt restructuring (TDRs).

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

BBVA COMPASS BANCSHARES, INC.

(Unaudited)

(Dollars in Thousands)

























September 30, 2017


December 31, 2016


September 30, 2016



Recorded
Investment


Total
Commitment


Nonaccrual


Recorded
Investment


Total
Commitment


Nonaccrual


Recorded
Investment


Total
Commitment


Nonaccrual

ENERGY PORTFOLIO


Exploration and production


$ 1,630,303


$ 4,080,635


$ 178,449


$ 1,654,565


$ 4,182,861


$ 308,096


$ 1,722,052


$ 4,244,802


$ 511,520

Midstream


976,845


3,011,822



1,199,844


3,230,513


11,298


1,207,650


3,209,931


11,552

Drilling oil and support services


179,636


373,389


2,350


263,770


467,908


66,811


261,748


468,728


64,771

Refineries and terminals


165,453


266,081


205


128,010


262,618


339


130,689


254,130


383

Total energy portfolio


$ 2,952,237


$ 7,731,927


$ 181,004


$ 3,246,189


$ 8,143,900


$ 386,544


$ 3,322,139


$ 8,177,591


$ 588,226






















September 30, 2017




December 31, 2016




September 30, 2016





As a % of
Energy Loans


As a % of Total
Loans




As a % of
Energy Loans


As a % of Total
Loans




As a % of Energy
Loans


As a % of Total
Loans



ENERGY PORTFOLIO



















Exploration and production


55.2 %


2.7 %




51.0 %


2.7 %




51.8 %


2.9 %



Midstream


33.1


1.6




37.0


2.0




36.4


2.0



Drilling oil and support services


6.1


0.3




8.1


0.4




7.9


0.4



Refineries and terminals


5.6


0.3




3.9


0.2




3.9


0.2



Total energy portfolio


100.0 %


4.9 %




100.0 %


5.4 %




100.0 %


5.5 %



BBVA COMPASS BANCSHARES, INC.

(Unaudited)

(Dollars in Thousands)
















Three Months Ended September 30,



2017


2016



Average Balance


Income/
Expense


Yield/
Rate


Average Balance


Income/
Expense


Yield/
Rate

YIELD/RATE ANALYSIS













(Taxable Equivalent Basis)













Assets













Earning assets:













Loans


$ 60,271,504


$ 642,670


4.23 %


$ 61,060,433


$ 574,748


3.74 %

Investment securities available for sale [a]


12,317,271


53,939


1.74


11,373,321


48,450


1.69

Investment securities held to maturity


1,122,893


10,088


3.56


1,249,282


9,701


3.09

Other earning assets [b] [c]


3,709,716


17,804


1.90


7,356,007


17,490


0.95

Total earning assets [a]


77,421,384


724,501


3.71


81,039,043


650,389


3.19

Allowance for loan losses


(821,227)






(848,067)





Unrealized gain (loss) on securities available for sale


(76,457)






25,595





Other assets


10,776,279






10,683,768





Total assets


$ 87,299,979






$ 90,900,339


















Liabilities and Shareholder's Equity













Interest bearing liabilities:













Interest bearing demand deposits


$ 7,557,010


$ 6,819


0.36


$ 6,824,519


$ 4,077


0.24

Savings and money market accounts


24,551,131


27,962


0.45


25,663,079


24,395


0.38

Certificates and other time deposits


12,408,794


40,302


1.29


14,670,360


47,507


1.29

Foreign office deposits





106,219


52


0.19

Total interest bearing deposits


44,516,935


75,083


0.67


47,264,177


76,031


0.64

FHLB and other borrowings


5,053,340


29,904


2.35


4,121,742


21,315


2.06

Federal funds purchased and securities sold under agreement to repurchase [c]


52,034


4,623


35.25


232,451


4,934


8.44

Other short-term borrowings


1,386,329


3,641


1.04


3,737,212


13,453


1.43

Total interest bearing liabilities


51,008,638


113,251


0.88


55,355,582


115,733


0.83

Noninterest bearing deposits


21,072,789






20,715,562





Other noninterest bearing liabilities


2,087,637






2,018,455





Total liabilities


74,169,064






78,089,599





Shareholder's equity


13,130,915






12,810,740





Total liabilities and shareholder's equity


$ 87,299,979






$ 90,900,339


















Net interest income/ net interest spread




611,250


2.83 %




534,656


2.36 %

Net yield on earning assets






3.13 %






2.62 %














Total taxable equivalent adjustment




21,889






19,847
















Net interest income




$ 589,361






$ 514,809




[a] Excludes adjustment for market valuation.

[b] Beginning in the fourth quarter of 2016, interest bearing deposits with the Federal Reserve are included in earning assets. Previous to this change, these balances were included with cash and due from banks in the cash and cash equivalents line, consistent with the Condensed Consolidated Balance Sheet presentation. Prior periods have been reclassified to conform to current period presentation.

[c] Yield/rate reflects impact of balance sheet offsetting.

BBVA COMPASS BANCSHARES, INC.

(Unaudited)

(Dollars in Thousands)
















Nine Months Ended September 30,



2017


2016



Average Balance


Income/
Expense


Yield/
Rate


Average Balance


Income/
Expense


Yield/
Rate

YIELD/RATE ANALYSIS













(Taxable Equivalent Basis)













Assets













Earning assets:













Loans


$ 60,166,823


$ 1,859,740


4.13 %


$ 61,867,590


$ 1,727,822


3.73 %

Investment securities available for sale [a]


12,082,938


164,483


1.82


11,258,000


131,253


1.56

Investment securities held to maturity


1,141,894


29,620


3.47


1,269,161


29,293


3.08

Other earning assets [b] [c]


4,638,132


59,220


1.71


7,635,249


53,936


0.94

Total earning assets [a]


78,029,787


2,113,063


3.62


82,030,000


1,942,304


3.16

Allowance for loan losses


(835,915)






(823,372)





Unrealized gain (loss) on securities available for sale


(102,461)






15,061





Other assets


10,390,945






10,656,738





Total assets


$ 87,482,356






$ 91,878,427


















Liabilities and Shareholder's Equity













Interest bearing liabilities:













Interest bearing demand deposits


$ 7,863,401


19,211


0.33


$ 6,912,147


11,867


0.23

Savings and money market accounts


24,826,554


72,643


0.39


25,861,764


75,896


0.39

Certificates and other time deposits


12,554,506


119,447


1.27


14,652,400


142,856


1.30

Foreign office deposits





108,444


160


0.20

Total interest bearing deposits


45,244,461


211,301


0.62


47,534,755


230,779


0.65

FHLB and other borrowings


4,115,511


71,422


2.32


4,543,350


58,919


1.73

Federal funds purchased and securities sold under agreement to repurchase [c]


64,676


16,462


34.03


569,772


16,525


3.87

Other short-term borrowings


2,239,427


24,233


1.45


3,912,069


41,281


1.41

Total interest bearing liabilities


51,664,075


323,418


0.84


56,559,946


347,504


0.82

Noninterest bearing deposits


20,922,150






20,432,380





Other noninterest bearing liabilities


1,899,015






2,122,640





Total liabilities


74,485,240






79,114,966





Shareholder's equity


12,997,116






12,763,461





Total liabilities and shareholder's equity


$ 87,482,356






$ 91,878,427


















Net interest income/ net interest spread




1,789,645


2.78 %




1,594,800


2.34 %

Net yield on earning assets






3.07 %






2.60 %














Total taxable equivalent adjustment




63,023






58,871
















Net interest income




$ 1,726,622






$ 1,535,929




[a] Excludes adjustment for market valuation.

[b] Beginning in the fourth quarter of 2016, interest bearing deposits with the Federal Reserve are included in earning assets. Previous to this change, these balances were included with cash and due from banks in the cash and cash equivalents line, consistent with the Condensed Consolidated Balance Sheet presentation. Prior periods have been reclassified to conform to current period presentation.

[c] Yield/rate reflects impact of balance sheet offsetting.

BBVA COMPASS BANCSHARES, INC.

(Unaudited)

(Dollars in Thousands)




















Nine Months




Three Months Ended



Ended September 30,


%


2017


2016



2017


2016


Change


September 30


June 30


March 31


December 31


September 30

NONINTEREST INCOME

















Service charges on deposit accounts


$ 166,040


$ 158,393


5


$ 55,953


$ 54,919


$ 55,168


$ 55,901


$ 55,047

Card and merchant processing fees


94,749


92,507


2


32,297


32,460


29,992


31,161


31,256

Retail investment sales


82,876


79,689


4


26,817


28,588


27,471


23,293


30,137

Investment banking and advisory fees


78,744


86,324


(9)


30,500


19,943


28,301


20,792


34,385

Money transfer income


77,408


75,960


2


24,881


27,330


25,197


28,632


25,058

Asset management fees


30,162


25,969


16


10,336


10,055


9,771


8,906


8,778

Corporate and correspondent investment sales


26,249


21,490


22


5,145


12,189


8,915


3,199


6,974

Mortgage banking


9,636


5,410


78


3,450


3,316


2,870


16,086


8,242

Bank owned life insurance


12,711


13,041


(3)


4,322


4,220


4,169


4,202


4,170

Other


167,198


206,396


(19)


61,060


53,305


52,833


68,881


59,718



745,773


765,179


(3)


254,761


246,325


244,687


261,053


263,765

Investment securities gains, net


3,033


30,037


(90)


3,033





Loss on prepayment of FHLB and other borrowings, net








(295)


Total noninterest income


$ 748,806


$ 795,216


(6)


$ 257,794


$ 246,325


$ 244,687


$ 260,758


$ 263,765


















NONINTEREST EXPENSE

















Salaries, benefits and commissions


$ 835,825


$ 836,067



$ 279,384


$ 288,426


$ 268,015


$ 283,609


$ 279,132

Professional services


187,422


178,396


5


64,775


64,840


57,807


63,810


63,628

Equipment


184,691


179,646


3


60,656


62,405


61,630


62,627


59,697

Net occupancy


125,568


120,881


4


42,227


41,240


42,101


40,116


41,610

Money transfer expense


50,069


50,048



15,938


17,807


16,324


17,426


16,680

Marketing


44,270


37,531


18


14,996


15,729


13,545


13,018


13,316

Communications


15,584


15,640



5,084


5,281


5,219


5,406


5,002

Amortization of intangibles


7,575


12,280


(38)


2,525


2,525


2,525


4,093


4,093

Goodwill impairment








59,901


Other


244,755


258,963


(5)


88,377


74,232


82,146


64,064


73,113

Total noninterest expense


$ 1,695,759


$ 1,689,452



$ 573,962


$ 572,485


$ 549,312


$ 614,070


$ 556,271


















NM = Not meaningful









BBVA COMPASS BANCSHARES, INC.

(Unaudited)

(Dollars in Thousands)












Three Months Ended September 30,


Nine Months Ended September 30,



2017


2016


2017


2016

NON-GAAP RECONCILIATION


















Computation of Operating Income:









Net interest income (GAAP)


$ 589,361


$ 514,809


$ 1,726,622


$ 1,535,929

Plus: noninterest income (GAAP)


257,794


263,765


748,806


795,216

Less: noninterest expense (GAAP)


573,962


556,271


1,695,759


1,689,452

Operating income (non-GAAP)


$ 273,193


$ 222,303


$ 779,669


$ 641,693




























Computation of Average Tangible Equity:









Total stockholder's equity (average)


$ 13,130,915


$ 12,810,740


$ 12,997,116


$ 12,763,461

Less: Goodwill and other intangibles (average)


5,041,385


5,101,819


5,045,419


5,108,852

Average tangible equity [B]


$ 8,089,530


$ 7,708,921


$ 7,951,697


$ 7,654,609

Net income [A]


$ 130,451


$ 120,351


$ 408,714


$ 282,120

Return on average tangible equity ([A]/[B], annualized)


6.40 %


6.21 %


6.87 %


4.92 %

BBVA COMPASS BANCSHARES, INC.

SUPPLEMENTAL LOAN PORTFOLIO INFORMATION (Unaudited)

(Dollars in Thousands)


















At or Quarter Ended September 30, 2017


30-59 Days Past Due


60-89 Days Past Due


90 Days or More

Past Due


Nonaccrual


Accruing TDRs


Not Past Due or

Impaired


Total


Net Charge Offs

(Recoveries)

















Commercial, financial and agricultural

$ 51,581


$ 6,351


$ 6,072


$ 324,071


$ 1,259


$ 24,702,608


$ 25,091,942


$ 14,695

Real estate – construction

661


94


2,955


1,877


106


2,241,451


2,247,144


(29)

Commercial real estate – mortgage

21,324


1,089


3,686


108,040


4,645


11,203,594


11,342,378


7,707

Residential real estate – mortgage

57,582


32,606


2,558


175,490


59,086


13,071,181


13,398,503


1,717

Equity lines of credit

11,118


4,824


2,179


34,416


237


2,564,538


2,617,312


179

Equity loans

3,470


1,798


840


11,305


30,574


335,389


383,376


(7)

Credit card

6,832


4,777


10,692


-


-


568,674


590,975


10,591

Consumer – direct

17,563


6,796


5,209


2,746


577


1,571,505


1,604,396


18,281

Consumer – indirect

81,534


23,070


8,858


8,867


-


2,916,849


3,039,178


18,133

Covered loans

-


-


-


-


-


-


-


-

Total loans

$ 251,665


$ 81,405


$ 43,049


$ 666,812


$ 96,484


$ 59,175,789


$ 60,315,204


$ 71,267

Loans held for sale

$ -


$ -


$ -


$ -


$ -


$ 77,783


$ 77,783


$ -


















At or Quarter Ended June 30, 2017


30-59 Days Past Due


60-89 Days Past Due


90 Days or More

Past Due


Nonaccrual


Accruing TDRs


Not Past Due or

Impaired


Total


Net Charge Offs

(Recoveries)

















Commercial, financial and agricultural

$ 32,398


$ 6,532


$ 4,770


$ 448,565


$ 766


$ 24,117,488


$ 24,610,519


$ 20,047

Real estate – construction

4,829


474


2,251


1,993


110


2,279,166


2,288,823


(797)

Commercial real estate – mortgage

8,966


10,138


3,617


117,893


4,725


11,375,494


11,520,833


(1,386)

Residential real estate – mortgage

54,911


31,227


3,043


141,482


59,490


12,789,171


13,079,324


1,404

Equity lines of credit

8,560


4,933


1,630


29,347


236


2,535,194


2,579,900


795

Equity loans

4,109


1,202


320


11,015


32,110


346,093


394,849


209

Credit card

5,446


4,015


11,738


-


-


555,621


576,820


10,678

Consumer – direct

16,134


6,032


4,187


706


620


1,419,967


1,447,646


16,899

Consumer – indirect

75,605


18,189


5,681


8,964


-


2,952,843


3,061,282


14,590

Covered loans

3,438


308


22,197


348


-


294,873


321,164


-

Total loans

$ 214,396


$ 83,050


$ 59,434


$ 760,313


$ 98,057


$ 58,665,910


$ 59,881,160


$ 62,439

Loans held for sale

$ -


$ -


$ -


$ -


$ -


$ 74,558


$ 74,558


$ -

















BBVA COMPASS BANCSHARES, INC.

SUPPLEMENTAL LOAN PORTFOLIO INFORMATION (Unaudited)

(Dollars in Thousands)






At or Quarter Ended March 31, 2017


30-59 Days Past Due


60-89 Days Past Due


90 Days or More
Past Due


Nonaccrual


Accruing TDRs


Not Past Due or
Impaired


Total


Net Charge Offs
(Recoveries)

















Commercial, financial and agricultural

$ 22,472


$ 11,804


$ 4,405


$ 540,407


$ 31,644


$ 24,049,936


$ 24,660,668


$ 39,411

Real estate – construction

487


25


3,640


1,028


114


2,222,111


2,227,405


(57)

Commercial real estate – mortgage

13,872


1,226


4,602


89,908


4,821


11,284,392


11,398,821


(741)

Residential real estate – mortgage

61,234


22,337


2,653


140,342


58,867


12,832,343


13,117,776


1,195

Equity lines of credit

9,144


3,619


1,478


32,675


-


2,513,579


2,560,495


1,166

Equity loans

5,105


1,592


376


12,626


33,635


367,028


420,362


848

Credit card

6,262


4,719


12,453


-


-


546,877


570,311


9,818

Consumer – direct

12,025


4,866


4,874


637


662


1,306,178


1,329,242


16,818

Consumer – indirect

68,851


16,161


7,463


7,955


-


2,978,318


3,078,748


15,899

Covered loans

6,448


3,479


23,673


410


-


307,929


341,939


(31)

Total loans

$ 205,900


$ 69,828


$ 65,617


$ 825,988


$ 129,743


$ 58,408,691


$ 59,705,767


$ 84,326

Loans held for sale

$ -


$ -


$ -


$ -


$ -


$ 74,741


$ 74,741


$ -


















At or Quarter Ended December 31, 2016


30-59 Days Past Due


60-89 Days Past Due


90 Days or More
Past Due


Nonaccrual


Accruing TDRs


Not Past Due or
Impaired


Total


Net Charge Offs
(Recoveries)

















Commercial, financial and agricultural

$ 23,788


$ 6,581


$ 2,891


$ 596,454


$ 8,726


$ 24,483,562


$ 25,122,002


$ 14,413

Real estate – construction

918


50


2,007


1,239


2,393


2,118,709


2,125,316


(383)

Commercial real estate – mortgage

3,791


3,474


-


71,921


4,860


11,126,614


11,210,660


280

Residential real estate – mortgage

57,359


28,450


3,356


140,303


59,893


12,970,633


13,259,994


1,044

Equity lines of credit

7,922


4,583


2,950


33,453


-


2,494,870


2,543,778


641

Equity loans

5,615


1,843


467


13,635


34,746


389,403


445,709


512

Credit card

6,411


5,042


10,954


-


-


582,474


604,881


9,680

Consumer – direct

13,338


4,563


4,482


789


704


1,230,765


1,254,641


15,343

Consumer – indirect

85,198


22,833


7,197


5,926


-


3,013,794


3,134,948


19,902

Covered loans

7,311


1,351


27,238


730


-


322,704


359,334


(81)

Total loans

$ 211,651


$ 78,770


$ 61,542


$ 864,450


$ 111,322


$ 58,733,528


$ 60,061,263


$ 61,351

Loans held for sale

$ -


$ -


$ -


$ 56,592


$ -


$ 105,257


$ 161,849


$ -

















BBVA COMPASS BANCSHARES, INC.

SUPPLEMENTAL LOAN PORTFOLIO INFORMATION (Unaudited)

(Dollars in Thousands)


















At or Quarter Ended September 30, 2016


30-59 Days Past Due


60-89 Days Past Due


90 Days or More
Past Due


Nonaccrual


Accruing TDRs


Not Past Due or
Impaired


Total


Net Charge Offs
(Recoveries)

















Commercial, financial and agricultural

$ 72,328


$ 4,400


$ 5,320


$ 850,075


$ 9,283


$ 23,897,662


$ 24,839,068


$ 8,936

Real estate – construction

522


1,062


2,782


1,214


3,315


2,206,377


2,215,272


(206)

Commercial real estate – mortgage

7,614


369


783


63,593


5,141


11,284,130


11,361,630


(372)

Residential real estate – mortgage

56,204


21,200


3,929


117,243


63,008


13,195,851


13,457,435


560

Equity lines of credit

8,173


4,477


2,417


32,642


-


2,446,759


2,494,468


601

Equity loans

5,567


1,694


353


13,198


36,053


422,510


479,375


18

Credit card

5,696


4,264


10,175


-


-


579,727


599,862


8,460

Consumer – direct

12,099


4,725


4,191


765


759


1,164,288


1,186,827


12,884

Consumer – indirect

73,045


20,165


7,070


7,019


-


3,088,936


3,196,235


15,197

Covered loans

4,075


3,844


28,505


269


-


344,418


381,111


-

Total loans

$ 245,323


$ 66,200


$ 65,525


$ 1,086,018


$ 117,559


$ 58,630,658


$ 60,211,283


$ 46,078

Loans held for sale

$ -


$ -


$ -


$ -


$ -


$ 101,843


$ 101,843


$ -

BBVA COMPASS BANCSHARES, INC.

BALANCE SHEET (Unaudited)

(Dollars in Thousands)












2017


2016


September 30


June 30


March 31


December 31


September 30

Assets:










Cash and due from banks

$ 1,145,745


$ 1,073,646


$ 1,093,797


$ 1,284,261


$ 1,130,610

Interest bearing funds with the Federal Reserve

2,400,533


2,120,285


2,669,135


1,830,078


2,923,813

Federal funds sold, securities purchased under agreements to resell and interest bearing deposits

188,380


182,215


197,000


137,447


372,268

Cash and cash equivalents

3,734,658


3,376,146


3,959,932


3,251,786


4,426,691

Trading account assets

572,104


2,651,083


2,892,254


3,144,600


4,051,461

Investment securities available for sale

12,268,309


12,142,844


11,846,618


11,665,055


11,516,885

Investment securities held to maturity

1,077,372


1,143,171


1,158,785


1,203,217


1,240,850

Loans held for sale

77,783


74,558


74,741


161,849


101,843

Loans

60,315,204


59,881,160


59,705,767


60,061,263


60,211,283

Allowance for loan losses

(849,119)


(816,952)


(834,106)


(838,293)


(862,080)

Net loans

59,466,085


59,064,208


58,871,661


59,222,970


59,349,203

Premises and equipment, net

1,226,747


1,253,516


1,273,226


1,300,054


1,287,457

Bank owned life insurance

720,693


718,938


715,883


711,939


712,422

Goodwill

4,983,296


4,983,296


4,983,296


4,983,296


5,043,197

Other assets

1,556,613


1,596,159


1,532,837


1,435,187


1,626,829

Total assets

$ 85,683,660


$ 87,003,919


$ 87,309,233


$ 87,079,953


$ 89,356,838

Liabilities:










Deposits:










Noninterest bearing

$ 21,094,235


$ 21,000,630


$ 21,476,890


$ 20,332,792


$ 20,585,598

Interest bearing

46,119,332


44,616,750


46,052,748


46,946,741


47,001,739

Total deposits

67,213,567


65,617,380


67,529,638


67,279,533


67,587,337

FHLB and other borrowings

3,956,041


4,789,494


2,993,222


3,001,551


3,671,861

Federal funds purchased and securities sold under agreements to repurchase

44,761


31,619


71,559


39,052


165,573

Other short-term borrowings

327,539


2,435,260


2,642,539


2,802,977


3,591,223

Accrued expenses and other liabilities

1,025,849


1,140,536


1,186,776


1,206,133


1,521,654

Total liabilities

72,567,757


74,014,289


74,423,734


74,329,246


76,537,648

Shareholder's Equity:










Preferred stock

229,475


229,475


229,475


229,475


229,475

Common stock — $0.01 par value

2,230


2,230


2,230


2,230


2,230

Surplus

14,912,412


14,916,198


14,982,125


14,985,673


15,020,937

Retained deficit

(1,920,184)


(2,050,051)


(2,207,060)


(2,327,440)


(2,416,402)

Accumulated other comprehensive loss

(137,583)


(137,131)


(150,781)


(168,252)


(46,644)

Total BBVA Compass Bancshares, Inc. shareholder's equity

13,086,350


12,960,721


12,855,989


12,721,686


12,789,596

Noncontrolling interests

29,553


28,909


29,510


29,021


29,594

Total shareholder's equity

13,115,903


12,989,630


12,885,499


12,750,707


12,819,190

Total liabilities and shareholder's equity

$ 85,683,660


$ 87,003,919


$ 87,309,233


$ 87,079,953


$ 89,356,838

BBVA COMPASS BANCSHARES, INC.

INCOME STATEMENT (Unaudited)

(Dollars in Thousands)












Three Months Ended


2017


2016


September 30


June 30


March 31


December 31


September 30

Interest income:










Interest and fees on loans

$ 623,884


$ 607,375


$ 574,712


$ 558,680


$ 557,996

Interest on investment securities available for sale

53,930


55,590


54,878


60,868


48,382

Interest on investment securities held to maturity

6,994


6,821


6,639


6,664


6,675

Interest on federal funds sold, securities purchased under agreements to resell and interest bearing deposits

11,557


12,049


9,262


7,664


4,563

Interest on trading account assets

6,247


9,805


10,297


13,150


12,926

Total interest income

702,612


691,640


655,788


647,026


630,542

Interest expense:










Interest on deposits

75,083


65,914


70,304


73,846


76,031

Interest on FHLB and other borrowings

29,904


22,450


19,068


23,825


21,315

Interest on federal funds purchased and securities sold under agreements to repurchase

4,623


6,942


4,897


4,640


4,934

Interest on other short-term borrowings

3,641


10,506


10,086


12,963


13,453

Total interest expense

113,251


105,812


104,355


115,274


115,733

Net interest income

589,361


585,828


551,433


531,752


514,809

Provision for loan losses

103,434


45,285


80,139


37,564


65,107

Net interest income after provision for loan losses

485,927


540,543


471,294


494,188


449,702

Noninterest income:










Service charges on deposit accounts

55,953


54,919


55,168


55,901


55,047

Card and merchant processing fees

32,297


32,460


29,992


31,161


31,256

Retail investment sales

26,817


28,588


27,471


23,293


30,137

Investment banking and advisory fees

30,500


19,943


28,301


20,792


34,385

Money transfer income

24,881


27,330


25,197


28,632


25,058

Asset management fees

10,336


10,055


9,771


8,906


8,778

Corporate and correspondent investment sales

5,145


12,189


8,915


3,199


6,974

Mortgage banking

3,450


3,316


2,870


16,086


8,242

Bank owned life insurance

4,322


4,220


4,169


4,202


4,170

Investment securities gains, net

3,033





Loss on prepayment of FHLB and other borrowings




(295)


Other

61,060


53,305


52,833


68,881


59,718

Total noninterest income

257,794


246,325


244,687


260,758


263,765

Noninterest expense:










Salaries, benefits and commissions

279,384


288,426


268,015


283,609


279,132

Professional services

64,775


64,840


57,807


63,810


63,628

Equipment

60,656


62,405


61,630


62,627


59,697

Net occupancy

42,227


41,240


42,101


40,116


41,610

Money transfer expense

15,938


17,807


16,324


17,426


16,680

Marketing

14,996


15,729


13,545


13,018


13,316

Communications

5,084


5,281


5,219


5,406


5,002

Amortization of intangibles

2,525


2,525


2,525


4,093


4,093

Goodwill impairment


59,901


Other

88,377


74,232


82,146


64,064


73,113

Total noninterest expense

573,962


572,485


549,312


614,070


556,271

Net income before income tax expense

169,759


214,383


166,669


140,876


157,196

Income tax expense

39,308


56,943


45,846


51,473


36,845

Net income

130,451


157,440


120,823


89,403


120,351

Less: net income attributable to noncontrolling interests

584


431


443


441


523

Net income attributable to BBVA Compass Bancshares, Inc.

$ 129,867


$ 157,009


$ 120,380


$ 88,962


$ 119,828

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SOURCE BBVA Compass