BB&T Corporation reported record earnings for the first quarter of 2018. Net income available to common shareholders was $745 million. Earnings per diluted common share were $0.94 for the first quarter of 2018, up from $0.77 last quarter. Results for the first quarter produced an annualized return on average assets of 1.45 percent and an annualized return on common shareholders' equity of 11.43 percent.

Excluding pre-tax merger-related and restructuring charges of $28 million ($22 million after-tax), net income available to common shareholders was $767 million, or $0.97 per diluted share.

Net income available to common shareholders was $614 million ($0.77 per diluted share) for the fourth quarter of 2017 and $378 million ($0.46 per diluted share) for the first quarter of 2017.

"We had a record quarter with strong expense control and lower tax expense," said Chairman and Chief Executive Officer Kelly S. King. "Our returns on average assets and average common shareholders' equity were the highest they have been since before the credit crisis.

"Total noninterest expenses for the quarter were $1.69 billion, down $169 million from the prior quarter. Excluding merger-related and restructuring charges and one-time expenses in the prior quarter related to the passage of tax reform, noninterest expense was down $39 million reflecting strong expense control and continued progress from our optimization efforts," King said.

"During the first quarter we were pleased to announce a 13.6 percent increase in our common stock dividend to share tax reform benefits with our shareholders. This follows actions taken in December of last year when we made additional investments in our associates and communities. We also increased our minimum hourly pay rate from $12 to $15 per hour.

"Earlier this month, we announced plans to acquire Regions Insurance. The acquisition will be a great strategic fit and increase our retail insurance network in core BB&T markets across the Southeast and newer markets in Texas, Louisiana and Indiana," said King.

First Quarter 2018 Performance Highlights

• Earnings per diluted common share were $0.94, up $0.17 compared to fourth quarter of 2017

• Earnings per diluted common share were $0.97, excluding merger-related and restructuring charges

• Return on average assets was 1.45 percent

• Return on average common shareholders' equity was 11.43 percent

• Return on average tangible common shareholders' equity was 19.36 percent

• Taxable-equivalent revenues were $2.84 billion, down $71 million from the fourth quarter of 2017

• Net interest margin was 3.44 percent, up one basis point from the prior quarter

• Taxable-equivalent adjustment declined $15 million, primarily due to lower tax rates

• Noninterest income was down $45 million primarily due to decreases in services charges on deposits and other income

• Fee income ratio was 41.9 percent, compared to 42.7 percent for the prior quarter

• Noninterest expense was $1.69 billion, down $169 million compared to the fourth quarter of 2017

• GAAP efficiency ratio was 60.0 percent, compared to 64.7 percent for the prior quarter

• Adjusted efficiency ratio was 57.3 percent, compared to 57.2 percent for the prior quarter

•  Average loans and leases held for investment were $142.9 billion, up $194 million, or 0.6 percent annualized compared to the fourth quarter of 2017

• Average commercial and industrial loans increased $149 million, or 1.0 percent annualized

• Average CRE loans increased $400 million, or 7.7 percent annualized

• Average residential mortgage loans increased $265 million, or 3.8 percent annualized

• Average indirect loans decreased $512 million, or 11.9 percent annualized

• Average deposits were $157.1 billion compared to $158.0 billion for the fourth quarter of 2017

• Average noninterest-bearing deposits decreased $892 million, or 6.7 percent annualized

• Average noninterest-bearing deposits represent 34.0 percent of total deposits, compared to 34.4 percent in the prior quarter

• Average interest-bearing deposits increased $71 million and costs were 0.46 percent, up six basis points compared to the prior quarter

• Asset quality remains strong

• Nonperforming loans were 0.42 percent of loans held for investment, up two basis points

• Loans 90 days or more past due and still accruing were 0.34 percent of loans held for investment, compared to 0.38 percent in the prior quarter

• The allowance for loan loss coverage ratio was 2.49 times nonperforming loans held for investment, versus 2.62 times in the prior quarter

• The allowance for loan and lease losses was 1.05 percent of loans held for investment, up one basis point compared to the prior quarter

• Capital levels remained strong across the board

• Common equity tier 1 to risk-weighted assets was 10.2 percent

• Tier 1 risk-based capital was 12.0 percent

• Total capital was 14.0 percent

• Leverage capital was 9.9 percent

First Quarter 2018 compared to Fourth Quarter 2017

Total taxable-equivalent revenues were $2.84 billion for the first quarter of 2018, a decrease of $71 million compared to the prior quarter, which reflects a decrease of $26 million in taxable-equivalent net interest income ($15 million of the decrease was due to the taxable-equivalent adjustment as a result of a lower tax rate), and a decrease of $45 million in noninterest income. First quarter results were negatively impacted by fee waivers and other costs associated with our system outage in February, which resulted in lost revenue of approximately $15 million and incremental noninterest expenses of approximately $5 million.

The net interest margin was 3.44 percent for the first quarter, up one basis point compared to the prior quarter (up three basis points adjusted for impact of tax reform). Average earning assets decreased $775 million, which reflects a decrease in average trading securities primarily due to lower balances related to client supporting activities. Average interest-bearing liabilities increased $244 million, primarily due to an increase of $1.0 billion in average long-term debt, which was partially offset by a decrease of $865 million in average short-term borrowings.

The annualized yield on the total loan portfolio for the first quarter was 4.57 percent, up seven basis points, reflecting the impact of rate increases. The annualized taxable-equivalent yield on the average securities portfolio for the first quarter was 2.44 percent, up two basis points compared to the prior quarter.

The average annualized cost of interest-bearing deposits was 0.46 percent, up six basis points compared to the prior quarter. The average annualized rate on long-term debt was 2.54 percent, up 18 basis points compared to the prior quarter. The average annualized rate on short-term borrowings was 1.43 percent, up 30 basis points compared to the prior quarter. The higher rates on interest-bearing liabilities reflect the impact of rate increases.

The provision for credit losses was $150 million, and net charge-offs were $145 million for the first quarter, compared to $138 million and $130 million, respectively, for the prior quarter.

Noninterest income was $1.18 billion, a decrease of $45 million compared to the prior quarter primarily due to decreases in service charges on deposits and other income, partially offset by an increase in insurance income.

Noninterest expense was $1.69 billion for the first quarter, down $169 million compared to the prior quarter. This decrease was primarily due to actions taken in the prior quarter in connection with the passage of the tax reform legislation, which included a contribution of $100 million to BB&T's philanthropic fund and $36 million for a one-time bonus paid to associates who do not generally receive incentives or commissions. Excluding these items and merger-related and restructuring charges, noninterest expenses were down $39 million as a result of tight expense control.

The provision for income taxes was $186 million for the first quarter, compared to $209 million for the prior quarter. The effective tax rate for the first quarter was 19.0 percent, compared to 23.9 percent for the prior quarter. The provision for income taxes for the current quarter reflects the new lower federal tax rate and $18 million in excess tax benefits from equity-based compensation plans, whereas the fourth quarter effective tax rate reflected a net tax benefit of $43 million related to the impact of tax reform.

First Quarter 2018 compared to First Quarter 2017

Total taxable-equivalent revenues were $2.84 billion for the first quarter of 2018, an increase of $16 million compared to the earlier quarter, which reflects an increase of $7 million in taxable-equivalent net interest income and an increase of $9 million in noninterest income.

Net interest margin was 3.44 percent, down two basis points compared to the earlier quarter. Average earning assets increased $2.0 billion. The increase in average earnings assets reflects a $3.8 billion increase in average securities, partially offset by a $2.0 billion decrease in other earning assets. Average interest-bearing liabilities decreased $254 million compared to the earlier quarter, as the growth in earning assets was funded by noninterest-bearing deposits, which increased $2.3 billion compared to the earlier quarter. Average interest-bearing deposits decreased $6.5 billion, which was partially offset by increases of $2.9 billion in average long-term debt and $3.4 billion in average short-term borrowings. The annualized yield on the total loan portfolio for the first quarter of 2018 was 4.57 percent, up 27 basis points compared to the earlier quarter. The annualized taxable-equivalent yield on the average securities portfolio was 2.44 percent, up two basis points compared to the earlier period.

The average annualized cost of interest-bearing deposits was 0.46 percent, up 20 basis points compared to the earlier quarter. The average annualized rate on long-term debt was 2.54 percent, up 71 basis points compared to the earlier quarter. The average annualized rate on short-term borrowings was 1.43 percent, up 100 basis points compared to the earlier quarter. The higher rates on interest-bearing liabilities reflect the impact of rate increases.

The provision for credit losses was $150 million compared to $148 million in the earlier quarter. Net charge-offs for the first quarter of 2018 totaled $145 million compared to $148 million for the earlier quarter.

Noninterest income was $1.18 billion, an increase of $9 million from the earlier quarter. Noninterest expense for the first quarter of 2018 was $1.69 billion, down $416 million compared to the earlier quarter. This decrease was primarily driven by a loss of $392 million on the early extinguishment of debt in the earlier period. Excluding this item and merger-related and restructuring charges, noninterest expense was down $16 million due to tight expense control.

The provision for income taxes was $186 million for the first quarter of 2018, compared to $104 million for the earlier quarter. This produced an effective tax rate for the first quarter of 2018 of 19.0 percent, compared to 19.6 percent for the earlier quarter. The provision for income taxes for the current quarter reflects the new lower federal tax rate, whereas the earlier period includes the tax benefits associated with using the marginal income tax rate for the loss on the early extinguishment of debt. The current quarter also reflects $18 million in excess tax benefits from equity-based compensation plans compared to $35 million in the earlier quarter.

First Quarter 2018 compared to Fourth Quarter 2017

Noninterest income was $1.18 billion for the first quarter, down $45 million compared to the prior quarter primarily due to decreases in service charges on deposit driven by the system outage and other income, partially offset by an increase in insurance income.

Insurance income increased $18 million primarily due to seasonality. Service charges on deposits decreased $18 million primarily due to fee waivers associated with the system outage. Other income decreased $40 million primarily due to a decrease of $27 million in income from SBIC private equity investments and $25 million due to income related to assets for certain post-employment benefits, which is primarily offset in other income/expense categories. Partially offsetting these decreases in other income were smaller increases in various sundry items.

First Quarter 2018 compared to First Quarter 2017

Noninterest income for the first quarter of 2018 was up $9 million compared to the earlier quarter.

Investment banking and brokerage fees and commissions increased $22 million due to higher managed account fees and higher investment banking income. Insurance income decreased $22 million compared to the earlier quarter primarily due to lower performance-based commissions. Service charges on deposits was essentially flat, but was negatively impacted due to fee waivers associated with the system outage as previously mentioned. Other income was essentially flat, as increases from various sundry items were more than offset by a $22 million decrease in income related to assets for certain post-employment benefits, which is primarily offset in other income/expense categories.

First Quarter 2018 compared to Fourth Quarter 2017

Noninterest expense was $1.69 billion for the first quarter, down $169 million compared to the prior quarter. This decrease was primarily due to actions taken in the prior quarter in connection with the passage of the tax reform legislation. That included a contribution of $100 million to BB&T's philanthropic fund and $36 million for a one-time bonus paid to associates who do not generally receive incentives or commissions. Excluding these items and merger-related and restructuring charges, noninterest expenses were down $39 million as a result of tight expense control.

Personnel expense decreased $33 million compared to the prior quarter and FTEs decreased 576. This includes decreases of $36 million for the one-time bonus mentioned above and $40 million in incentives resulting from lower current quarter performance relative to targets. These decreases were partially offset by increases of $25 million for payroll taxes primarily due to the annual reset of social security taxes as well as higher pension expense and increased equity-based compensation related to retirement eligible associates.

Merger-related and restructuring charges were $28 million for the first quarter and primarily reflect charges associated with facilities optimization activities.

Other expense decreased $127 million primarily due to the $100 million charitable contribution mentioned above. In addition, the expected return on pension assets increased $15 million due to higher plan assets.

First Quarter 2018 compared to First Quarter 2017

Noninterest expense for the first quarter of 2018 was down $416 million compared to the earlier quarter primarily driven by a loss of $392 million on the early extinguishment of debt in the earlier period. Excluding this item and merger-related and restructuring charges, noninterest expense was down $16 million due to tight expense control.

Personnel expense was essentially flat compared to the earlier quarter as lower salaries expense driven by approximately 1,500 fewer FTEs was largely offset by higher pension service cost. Outside IT services decreased $17 million compared to the earlier quarter due to lower project-related expenses. Other expense decreased $14 million compared to the earlier quarter, primarily due to an increase in the expected return on pension plan assets due to higher plan assets.

Average loans held for investment for the first quarter of 2018 were $142.9 billion, up $194 million, or 0.6 percent annualized compared to the fourth quarter of 2017.

Average commercial and industrial loans increased $149 million, as production late in the prior quarter led to higher average balances. This was partially offset by a seasonal decline in average mortgage warehouse loans. Average CRE increased $400 million due to growth in loans for income producing properties. In addition, average residential mortgage loans increased $265 million due to a change to retain a portion of the conforming mortgage production rather than selling substantially all such production.

Average indirect retail loans decreased $512 million, primarily due to seasonality, strategic optimization and directing investments toward higher-yielding assets.

Average deposits for the first quarter were $157.1 billion, down $821 million compared to the prior quarter. Average noninterest-bearing deposits decreased $892 million, reflecting seasonality and driven by decreases in commercial balances, partially offset by increases in personal and public funds balances.

Average interest checking increased $524 million primarily due to increases in commercial and public funds balances. Average time deposits increased $103 million primarily due to increases in commercial balances. Average foreign office deposits decreased $553 million due to changes in the overall funding mix.

Noninterest-bearing deposits represented 34.0 percent of total average deposits for the first quarter, compared to 34.4 percent for the prior quarter and 31.7 percent a year ago. The cost of interest-bearing deposits was 0.46 percent for the first quarter, up six basis points compared to the prior quarter.

First Quarter 2018 compared to Fourth Quarter 2017

Community Banking Retail and Consumer Finance ("CB-Retail")

CB-Retail serves retail clients by offering a variety of loan and deposit products, payment services, bankcard products and other financial services by connecting clients to a wide range of financial products and services. CB-Retail includes Dealer Retail Services, which originates loans on an indirect basis to consumers for the purchase of automobiles, boats and recreational vehicles. Additionally, CB-Retail includes specialty finance lending, small equipment leasing and other products for consumers. CB-Retail also includes Residential Mortgage Banking, which originates and purchases mortgage loans to either hold for investment or sell to third parties. BB&T generally retains the servicing rights to loans sold. Mortgage products include fixed and adjustable-rate government guaranteed and conventional loans used for the purpose of constructing, purchasing or refinancing residential properties. Substantially all of the properties are owner-occupied. Residential Mortgage Banking also includes Mortgage Warehouse Lending, which provides short-term lending solutions to finance first-lien residential mortgages held-for-sale by independent mortgage companies.

CB-Retail net income was $324 million for the first quarter of 2018, an increase of $61 million compared to the prior quarter. Segment net interest income decreased primarily due to fewer days in the current quarter, partially offset by higher funding spreads on deposits. Noninterest income decreased $19 million primarily due to a decline in service charges on deposits largely resulting from fee waivers associated with the February system outage. The allocated provision for credit losses decreased due to a decline in loss estimates and a seasonal decline in bankcard loans. Noninterest expense decreased $22 million primarily due to a one-time bonus in the prior quarter to associates who do not generally receive incentives or commissions, partially offset by an increase in allocated corporate expenses. The provision for income taxes declined $51 million due to a lower tax rate in the current quarter.

CB-Retail average loans and leases held for investment decreased $777 million, or 5.0 percent on an annualized basis, compared to the prior quarter primarily due to seasonality, strategic optimization and directing investments to higher yielding assets. The decline was driven by decreases in indirect, mortgage warehouse and direct loans, partially offset by an increase in average residential mortgage loans.

CB-Retail average total deposits increased $420 million, or 2.2 percent on an annualized basis, compared to the prior quarter. Average noninterest-bearing deposits increased $290 million, or 7.4 percent annualized, and average money market and savings accounts increased $158 million, or 1.8 percent annualized.

Community Banking Commercial ("CB-Commercial")

CB-Commercial serves large, medium and small business clients by offering a variety of loan and deposit products and by connecting clients to the combined organization's broad array of financial services. CB-Commercial includes CRE lending, commercial and industrial lending, corporate banking, asset-based lending, dealer inventory financing, tax exempt financing, cash management and treasury services, and commercial deposit products.

CB-Commercial net income was $270 million for the first quarter of 2018, an increase of $36 million compared to the prior quarter. Segment net interest income decreased primarily due to lower credit spreads on loans and fewer days in the current quarter, partially offset by higher funding spreads on deposits. The allocated provision for credit losses increased due to higher net charge-offs and an increase in loss estimates. Noninterest expense decreased $19 million primarily due to lower allocated corporate expenses. The provision for income taxes declined $47 million primarily due to a lower tax rate in the current period.

CB-Commercial average loans and leases held for investment increased $642 million, or 5.0 percent on an annualized basis. Compared to the prior quarter, average commercial and industrial loans increased $474 million, or 6.0 percent annualized, and average commercial real estate loans increased $198 million, or 4.1 percent annualized.

CB-Commercial average total deposits decreased $737 million, or 5.0 percent on an annualized basis, driven by a seasonal decline in average noninterest-bearing deposits of $920 million, or 10.5 percent annualized.

Financial Services and Commercial Finance ("FS&CF")

FS&CF provides personal trust administration, estate planning, investment counseling, wealth management, asset management, corporate retirement services, capital markets and corporate banking services, specialty finance and corporate trust services to individuals, corporations, institutions, foundations and government entities. In addition, the segment includes BB&T Securities, a full-service brokerage and investment banking firm, which offers clients a variety of investment services, including discount brokerage services, equities, annuities, mutual funds and government bonds. The Corporate Banking Division originates and services large corporate relationships, syndicated lending relationships and client derivatives while the specialty finance products offered by FS&CF include equipment finance, tax-exempt financing for local governments and special-purpose entities, and full-service commercial mortgage banking lending.

FS&CF net income was $144 million for the first quarter of 2018, an increase of $8 million compared to the prior quarter. Noninterest income decreased primarily due to lower gains on trading securities and a seasonal decline in commercial mortgage banking income. The provision for income taxes declined $26 million due to a lower tax rate and a decline in pre-tax earnings.

Corporate Banking's average loans held for investment increased $20 million, or an annualized 0.5 percent, compared to the prior quarter, while BB&T Wealth's average loans held for investment increased $60 million, or an annualized 13.7 percent. Average loans held for investment at Governmental Finance increased $183 million, or an annualized 14.8 percent, compared to the prior quarter and increased 49.6 percent and 7.6 percent, respectively, for Grandbridge and Equipment Finance.

FS&CF average total deposits decreased $91 million, or 1.3 percent annualized, driven by a decline in average total deposits for Grandbridge and Corporate Banking, partially offset by an increase in average total deposits for BB&T Wealth.

Insurance Holdings and Premium Finance ("IH&PF")

BB&T's insurance agency / brokerage network is the fifth largest in the world. IH&PF provides property and casualty, employee benefits and life insurance to businesses and individuals. It also provides small business and corporate services, such as workers compensation and professional liability, as well as surety coverage and title insurance.

Additionally, IH&PF includes commercial and retail insurance premium finance.

IH&PF net income was $62 million for the first quarter of 2018, an increase of $29 million compared to the prior quarter. Noninterest income increased primarily due to seasonality. Noninterest expense decreased primarily due to a one-time bonus in the prior period to associates who do not generally receive incentives or commissions.

Other, Treasury & Corporate ("OT&C")

Net income in OT&C can vary due to the changing needs of the Corporation, including the size of the investment portfolio, the need for wholesale funding and income received from derivatives used to hedge the balance sheet.

OT&C generated a net loss of $9 million for the first quarter of 2018, compared to net income of $1 million for the prior quarter. Segment net interest income increased due to fewer days in the current quarter impacting the net funding credit to the other operating segments. Noninterest income decreased $23 million due to a decline in income from SBIC private equity investments and lower income related to assets for certain post-employment benefits. Noninterest expense decreased $104 million primarily due to a $100 million charitable contribution to BB&T's philanthropic fund in the prior quarter. The benefit for income taxes decreased $101 million due to a decline in pre-tax loss and a net tax benefit of $43 million recorded in the prior quarter related to the impact of tax reform partially offset by excess tax benefits from equity-based compensation plans in the current quarter.

First Quarter 2018 compared to First Quarter 2017

Community Banking Retail and Consumer Finance

CB-Retail net income was $324 million for the first quarter of 2018, an increase of $70 million compared to the earlier quarter. Segment net interest income increased due to higher funding spreads on deposits and a change in mix to higher yielding loans, partially offset by lower credit spreads on loans. Noninterest income increased primarily due to higher bankcard fees and merchant discounts. The provision for income taxes declined $45 million due to a lower tax rate compared to the earlier quarter.

Community Banking Commercial

CB-Commercial net income was $270 million for the first quarter of 2018, an increase of $75 million compared to the earlier quarter. Segment net interest income increased $27 million driven primarily by higher funding spreads on deposits, average noninterest-bearing deposit growth and average loan growth, partially offset by lower credit spreads on loans. The allocated provision for credit losses increased $33 million primarily due to a normalization in loss estimates and higher net charge-offs. Noninterest expense decreased $53 million driven primarily by a decline in personnel expense due to a third quarter of 2017 change in approach for allocating capitalized loan origination costs, as well as lower allocated corporate expenses. The provision for income taxes declined $25 million compared to the earlier quarter due to a lower tax rate.

Financial Services and Commercial Finance

FS&CF net income was $144 million for the first quarter of 2018, an increase of $35 million compared to the earlier quarter. Noninterest income increased $21 million due to higher investment banking and brokerage fees and commissions, primarily driven by higher managed account fees and higher investment banking income. The allocated provision for credit losses decreased due to a decline in net charge-offs. Noninterest expense increased due to higher personnel expense primarily resulting from increased incentive expense. The provision for income taxes declined primarily due to a lower tax rate.

Insurance Holdings and Premium Finance

IH&PF net income was $62 million for the first quarter of 2018, an increase of $12 million compared to the earlier quarter. Noninterest income decreased $24 million primarily due to lower performance-based commissions. Noninterest expense decreased $25 million primarily due to declines in business referral expense, merger-related and restructuring charges and personnel expense. The provision for income taxes decreased compared to the earlier quarter due to a lower tax rate.

Other, Treasury & Corporate

OT&C generated a net loss of $9 million in the first quarter of 2018, compared to a net loss of $182 million in the earlier quarter. Segment net interest income decreased $21 million primarily due to an increase in the rate and average balances for long-term debt. The allocated provision for credit losses decreased due to a decline in the provision for PCI loans and a decrease in the provision for unfunded lending commitments. Noninterest expense decreased $352 million due to a $392 million loss on the early extinguishment of debt in the earlier period, partially offset by an increase in personnel expense due to a third quarter of 2017 change in approach for allocating capitalized loan origination costs. The benefit for income taxes fell $171 million primarily due to a decline in pre-tax loss and lower excess tax benefits from equity-based compensation plans.

Capital levels remained strong at March 31, 2018. BB&T declared common dividends of $0.375 per share (up 13.6 percent from the fourth quarter) during the first quarter of 2018, which resulted in a dividend payout ratio of 39.2 percent. BB&T completed $320 million of share repurchases during the first quarter in accordance with the capital plan. The total payout ratio for the first quarter of 2018 was 82.1 percent.

BB&T's liquidity coverage ratio was approximately 144 percent at March 31, 2018, compared to the regulatory minimum of 100 percent. In addition, the liquid asset buffer, which is defined as high quality unencumbered liquid assets as a percentage of total assets, was 15.1 percent at March 31, 2018.

Nonperforming assets totaled $669 million at March 31, 2018, up $42 million compared to December 31, 2017. Nonperforming loans and leases represented 0.42 percent of loans and leases held for investment, a slight increase compared to December 31, 2017. The increase in nonperforming assets was primarily related to CRE lending and leasing, as well as an increase in foreclosed properties.

Performing TDRs were essentially flat during the first quarter, as the commercial and industrial and CRE portfolios were down while government guaranteed residential mortgage loans increased.

Loans 90 days or more past due and still accruing totaled $490 million at March 31, 2018, down $58 million compared to the prior quarter, primarily due to a decrease in residential mortgage loans. The ratio of loans 90 days or more past due and still accruing as a percentage of loans and leases was 0.34 percent at March 31, 2018, compared to 0.38 percent for the prior quarter. Excluding government guaranteed and PCI loans, the ratio of loans 90 days or more past due and still accruing as a percentage of loans and leases was 0.04 percent at March 31, 2018, an improvement of one basis point from the prior quarter.

Loans 30-89 days past due and still accruing totaled $814 million at March 31, 2018, down $238 million compared to the prior quarter. The decrease was primarily due to expected seasonality in indirect lending and residential mortgage.

Net charge-offs during the first quarter totaled $145 million, up $15 million compared to the prior quarter. As a percentage of average loans and leases, annualized net charge-offs were 0.41 percent, up five basis points compared to the prior quarter.

The allowance for loan and lease losses, excluding the allowance for PCI loans, was $1.5 billion, up $11 million compared to the prior quarter. As of March 31, 2018, the total allowance for loan and lease losses was 1.05 percent of loans and leases held for investment, up slightly compared to December 31, 2017.

The allowance for loan and lease losses was 2.49 times nonperforming loans and leases held for investment, compared to 2.62 times at December 31, 2017. At March 31, 2018, the allowance for loan and lease losses was 2.55 times annualized net charge-offs, compared to 2.89 times at December 31, 2017.