helplessobserver

Earnings Preview: BB&T Corp.

If the recent stock price is any indicator this high quality regional bank is nearly back on its feet. Real estate in Washington DC is becoming less of a drag so the Atlanta and Florida commercial and residential burdens will be easier to bear. CEO Kelly King is still stunned by the huge loan loss reserves he has to authorize. At least he does not now have to pay interest on the TARP funds anymore. Progress is being made loan by loan.

20 Option Ideas to Protect and Profit: Financials

Very interesting, but why not buy FCS and sell an at the money strangle on FCX out to Jan10. Collect about 8 on the call and 8 on the put. If called you make about 28% in six months. Your down side protection is 15%. You can also use part of the $16 premium collected to buy put protection several points below your break even price. You need 2 puts per position first to protect your first 100 shares and another to protect against an assignment of 100 FCX stock in case of a market meltdown.

Fitch Lowers BB&T Corp.'s Ratings

BBT is now trading near book value. They are having loan trouble especially in the Atlanta area where fraud and speculation was rampant. According to our local media the Washington DC housing market is improving which should help. BBT will survive a battered but not broken bank.

BB&T Q2 Results Look Strong

The 2nd quarter results for BBT show the continuing pressure on regional banks as residential, commercial and lease loans continue to sour. Regional banks have a lot more of this slow torture to endure before it all ends. BBT will emerge a wounded winner when the torture ends.

Dividend Aristocrat BBT Suffers Under the TARP

I think it will be hard for BBT to earn its expected rate of return on the new 75 million shares. This is because loan losses are depleting earnings and qualified new borrowers are scarce so the steep yield curve is not much help. Until the dividend is increased this stock is in a long holding pattern.

Uneasy Silence About Regional Banks

I do not know about the others, but the only solvent large bank in the Southeastern US is BBT. Residents crushed by the losses taken by the mismanagement of Wacovia and Bank of America are moving to the only good bank around. Thousands of bank jobs have been lost and these ex employees are not staying with their previous employers. CEO Kelly King has managed to keep generating earnings while doing everything possible to work out troubled loans. If he needs capital he can cut the generous dividend.

Stress Tests: Where Do CDS Fit In?

One thing we must keep in mind is the purpose of banks holding all these CDS's. Regulators allow the upgrade of a loan say from tier II to tier l capital if it is insured by a CDS. European banks began massive CDS purchases, mostly from AIG, when they realized how low the credit value was on US issued CDOs they held as capital reserves. This is why the US taxpayer paid so much money to UK and other European banks. It made the $11 billion Marshall plan outlays look like chump change.

BBT Reports Better than Expected Earnings

You need to revise your last statement to read: As the only large solvent bank in the southeastern US with a strong capital structure and experienced and prudent management we maintain our Hold recommendation on the shares.

Earnings Preview: BB&T

I find it interesting that one of the best bank in America, BBT, gets kicked around by analysts while junk banks like Fifth Third get treated like slightly tarnished Knights in Shinning Armor. In 2008 the bank, after paying 28% taxes earned, repeat earned, $1.5 billion dollars. That is enough to write off all of its $1.04 billion of unpriced securities and $380 million of only partly collectable "sub prime consumer loans" it has on its books. 2009 earnings are pegged at $1.50 per share adding another $750 million of retained earnings to its already substantial cash hoard. I expect is $0.47 quarterly dividend will be cut by year end as CEO Kelly King observes the worst banking enviroment he has ever seen. They report tomorrow, maybe they will report $0.50 to cover the $0.47 dividend already declared.

BB&T Bank: Worth a Look, Despite S&P's Credit Rating Downgrade

CEO Kelly King is guiding BBT through the very difficult process of trying to get the most of the money back from construction, commercial and residential loans in Washington DC, Atlanta and Florida. None of these loans are sub-prime. Residential loans required 20% down or mortgage insurance. After this is all over the strongest bank in the SE will be BBT. BofA is a zombie with incompetent management and the stench of Wacovia has Wells Fargo execs gagging. I suspect BBT will eventually take over any good loans left on Wacovia's book.

Moody's Wakes Up, Whacks 23 Banks

I own BBT and was suprised to see them increase their dividend recently. At $1.88 it is very rich, near 13 to 14 % at the stock's low. Their troubled loans in Wash DC, Atlanta and Florida are well documented and CEO Kelly King is keeping a firm grip on them. Other businesses, retail banking and insurance are very profitable. Kelly is most concerned with is consumer loans with unemployment rising. BBT will survive and since I've been keeping score it has risen from the 14th largest bank to 11th. It and BAC will dominate banking the the SE USA.

Three Value Stocks

BBT also got a good tangible common equity ratio reading from Barron's this week. At over 5% it will easily pass the stress test. WOW increase a 11% yield, shows management sees a strong financial structure.

Rating the Top 12 U.S. Banks - From Hidden Gems to Zombies

I suspect BBT will cut its dividend to about 0.25 per share. This will inject a massive amount of capital into an already strong capital structure. On the earnings CC CEO King noted things are unusual in the banking sector and the bank has troubled assets in Washington DC, Atlanta and Florida they are focusing on. He is less worried about his builders as they are required to have "skin" in the game to qualify for construction loans. His larger worry is a higher unemployment rate and resulting larger losses in its credit card and other consumer loans books. BBT is hunkered down in a strong bunker and doing what good business is available.

Banks Stressing the System vs. Potential Winners of the TARP Repayment Race

Mr. Market says BBT will have to pare its dividend, now 10% to the 5-6% range. This will free up several hundred millions of dollars that can be added to bank capital and make a strong bank even stronger. CEO King is most worried about unemployment >10% and its damage to his credit card loan book. He is least worried about his builders as they have to put up significant personal collateral to get a loan package.

BB&T Bank: A Rose Amongst the Thorns

One of the worst worries for BBT, being a very solvent bank, is picking up the crap the FDIC will foist on it as it cleans up crummy insolvent banks. Another thing nobody seems to get straight. BANKS DO NOT LOAN OUT TARP FUNDS AS THEY ARE PUT IN THE BANKS CAPITAL ACCOUNT. Capital funds are bank loans and shareholder funds used to protect depositor's funds that ARE LENT OUT AS LOANS. When loan loss reserves are increased they come from the bank's capital accounts thus reducing shareholders equity.