Jan. 7, 2014, 2:47 PM
- Fairly lukewarm on the large cap regional banking sector (KRE +0.7%) amid pricey valuations and the likelihood 2014 estimates are set to be trimmed after Q4 earnings reports, Citi's Keith Horowitz does have a favorite ...
- BB&T Corporation (BBT +1.4%) deserves a premium multiple, says Horowitz, thanks to its above-average returns and quality of the management team.
- The rest? Wells Fargo (WFC -0.1%) is likely to beat Q4 estimates due to lower expenses (the bank has been busy cutting mortgage staff), but Horowitz is Neutral on the name. U.S. Bancorp (USB +1%) is Neutral as well thanks to its premium valuation. Also not meriting a Buy rating are Fifth Third (FITB +0.4%), M&T (MTB +0.8%), and PNC Financial (PNC +0.9%).
- JPMorgan today upgrades BB&T to a Buy with $42 price target.
Dec. 18, 2013, 11:10 AM
- BB&T(BBT +0.1%) is set to acquire 21 Citibank branches in Texas, including all of Citibank's retail branches in Austin and San Antonio.
- After the deal, BBT will have 81 financial centers in the state with $2.8B in deposits and $2.1B in loans.
- BBT is paying a 4.25% premium (~$36M) to book for the core deposits. (PR)
Nov. 13, 2013, 7:25 AM| Comment!
Oct. 22, 2013, 2:30 PM
Oct. 17, 2013, 1:47 PM
- Earnings season is just getting underway, but D.C. is proving a nice excuse for slowing business at banks last quarter and maybe for a weak Q4. Goldman CFO Schwartz (GS -2.6%) is guardedly optimistic, but says executives may just turn their gaze to the next deadline 3 months from now. "It's much easier to do nothing that it is to do something."
- Earlier: Goldman earnings coverage, conference call transcript.
- Closer to Main Street, BB&T (BBT -0.5%) chief Kelly KIng is sees a boom if D.C. can put together a decent policy mix. The business leaders he talks to haven't invested at the margin in years and are eager to do so once they feel a sense of confidence returning. "You’ll see a lot of planned expansions, equipment renewals, rolling stock replacements.”
- Earlier: BB&T earnings coverage, conference call transcript.
- Bank ETFs: KBE, KBWB, KRE.
Oct. 17, 2013, 8:17 AM
- Net interest income of $1.45B is flat from a year ago, with net interest margin falling a big 26 basis points to 3.68% (but off just 2 bps from last quarter).
- Noninterest income of $905M fell 13.5% Y/Y, led by a 44.5% decline in mortgage banking income. Noninterest expense of $1.5B fell 3.8% during the quarter.
- Credit metrics continue to improve: Nonperforming asset ratio falls to 0.65% from 0.71% last quarter and 0.97% a year ago. Net charge-off percentage falls to 0.49% from 0.75% in Q2 and 1.08% a year ago.
- Q3 results, press release.
- Conference call is underway.
- BBT unchanged premarket.
Oct. 17, 2013, 6:06 AM
Oct. 17, 2013, 12:05 AM
Oct. 16, 2013, 5:30 PM
Oct. 9, 2013, 12:04 PM
- The banking sector overall - at 12-15x 2014 EPS and 1.5-.19x book value - is "fairly valued," says Oppenheimer's Terry McEvoy, but he finds some undervalued names headed into Q3 earnings.
- Four top regional bank picks are BBT, KEY, FMER, and SBNY.
- BB&T, says McEvoy has averaged a 12.5x forward P-E multiple vs. the 10.6x it's at now.
- KeyCorp trades at just 11.3x earnings vs. its peer group at 13.
- FirstMerit has had a big run and trades at 13.9x estimates, but it's a growth play - 12% organic loan growth this year along with reasonably-priced acquisitions - and deserves this multiple, says McEvoy.
- At 18x consensus, Signature Bank is also a growth play deserving of a big multiple - net loans and leases were up 13% Y/Y in Q2.
- Relevant ETFs: KBE, KBWB, KRE.
Oct. 1, 2013, 7:33 AM
Sep. 22, 2013, 3:43 AM
- A U.S. Court of Federal claims has rejected BB&T's (BBT) request to recover at least $688M in taxes and fines over an elaborate tax-avoidance scheme called STARS that was set up with Barclays.
- Calling the conduct of the participants "nothing short of reprehensible," Judge Thomas Wheeler described STARS as "an economically meaningless tax shelter" that was "rife with...conflicts of interest, (and) questionable pro forma legal and accounting opinions."
- As a result of the verdict, BB&T expects to book a $250M charge this quarter, adding to the $281M that the company provisioned in February.
Sep. 19, 2013, 3:05 PM
- Regional banks have fallen and can't get up following yesterday afternoon's non-taper announcement. The SPDR Regional Banking ETF (KRE -1.7%) is off about 3% from where it stood prior to 2 PM ET yesterday.
- The sector sliced right through the bond market tumble this summer as higher rates were expected to boost profitability for the lenders, and investors are using the excuse of the taper delay to cash in some chips (as they are with another higher-rate beneficiary, the insurance sector).
- Individual names of note: Huntington (HBAN -2%), Regions (RF -3.7%), SunTrust (STI -3.1%), First NIagara (FNFG -2.8%), Synovus (SNV -1.8%), KeyCorp (KEY -3.9%), ZIons (ZION -3.1%), Flagstar (FBC -2.3%).
- Perhaps a little less asset-sensitive and performing better: U.S. Bancorp (USB -0.4%), BB&T (BBT -0.3%), PNC Financial (PNC -0.5%), Hudson CIty (HCBK -0.9%), Fifth Third (FITB -1%).
- Other ETFs: KBE, KBWB.
Sep. 17, 2013, 8:36 AM
- Included in Goldman's moves in the regional banking sector is the removal of a Sell rating on Comerica (CMA) with price target hiked to $42 from $38. "The market has shown willingness to price the shares at a premium based on CMA’s absolute rate upside, which we do not expect to change much over time," says Goldman.
- The stock, however, doesn't yet merit a Buy rating, with Goldman cautioning about near-term expectations given declining loans this quarter.
- Earlier: Goldman raises BB&T (BBT) to a Buy and cuts Fifth Third (FITB) to Hold.
Sep. 17, 2013, 7:30 AM
- Goldman has a pair trade in the regional banking sector, upgrading BB&T (BBT) to Buy with price target of $39, and downgrading Fifth Third Bank (FITB) to Hold with $20 price target.
- Interest rates are one factor, and rising ones should help the relatively asset sensitive BB&T, but not Fifth Third, which is more reliant on mortgage banking revenue.
- BB&T should also benefit from improving credit losses and a commercial real estate market showing signs of bottoming.
Sep. 11, 2013, 8:23 AM
- Stung in one area of their business by rising rates as refinance business evaporates, regional banks are overall pleased with the steeper yield curve. Presenting at various conferences yesterday, players like FITB, BBT, MTB, and RF say they can now reinvest money at those higher rates.
- Fifth Third transcript and presentation slides.
- "Our forecast doesn't show short rates moving until at least the latter part of 2014 and probably into 2015," says Regions CFO David Turner (presentation slides). "We do benefit from the steepening of the curve."
- ETFs: KRE, KBE, KBWB.
BBT vs. ETF Alternatives
BB&T Corporation is a financial holding company, which through its subsidiary, Branch Banking and Trust Company provides a range of banking services to individuals and businesses, and offers loans to businesses and consumers.
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