Does anyone know if BBT will do a press release or have any articles about what happened at the shareholder meeting? Just wondering if they will do a press release or have information posted somewhere on what happened and any follow up on the things discussed at the meeting.
On the BB&T website, you can see the slides they showed at the meeting which is all BB&T propaganda. But that is it--nothing about the votes, what was approved, disapproved, who got elected, etc. Very poor investor relations for a big company. I realize that they were embarassed by the strength of the vote on Proposal 6,the votes against the directors, etc. But they should do a better job of informing their shareholders, particularly when the meeting is held outside of North Carolina.
2nd part of article on my next post Artlcle to large for one post.
From the April 30, 2004 print edition
Critics take swipes at BB&T's earnings, governance policies
The Business Journal Serving the Greater Triad Area
WINSTON-SALEM -- BB&T Corp., already battling a stagnant stock price and what it calls a 15-month performance "blip," is now facing a corporate-governance challenge from the nation's largest public pension fund in addition to calls from analysts to take more aggressive steps to improve the bank's bottom line.
In the past week, BB&T has been criticized openly by the California Public Employees' Retirement System, or Calpers, for allowing auditor PricewaterhouseCoopers to perform nonauditing tasks such as tax planning and providing tax advice.
Calpers said it would withhold support to re-elect committee members to BB&T's board of directors, a position the fund is taking with several companies including Wachovia and Citigroup.
Calpers' efforts, though unsuccessful at BB&T's annual meeting this week, still demonstrate that more challenges are building around BB&T and that some groups want changes made at the bank.
Several analysts, meanwhile, say the bank must take more aggressive action to improve performance and return to the blue-chip reputation it enjoyed just two years ago.
Last year, BB&T earnings totaled $1.1 billion, down 21 percent from prior-year levels. In the first quarter of 2004, BB&T saw net income of $328.5 million, up slightly from the prior year.
"They need to find efficiencies in their organization," said Jason Goldberg, an analyst at Lehman Brothers in New York. "They had been doing a lot of deals and were never fully getting their culture engrained (at purchased banks). They need to regroup."
Various options suggested
Those who follow the banking industry have a variety of suggestions for BB&T.
Tony Plath, banking professor at UNC-Charlotte, is among those offering the most ambitious proposal, suggesting that BB&T scrap its community-banking model. The model has more than 20 regions, and it is designed to push decision-making authority out into the bank's branches.
Plath said BB&T, which is approaching $100 billion in assets, has gotten so large that it is inefficient to use such a decentralized process. He said it will become more difficult for BB&T to buy and improve underperforming banks as it grows with this model.
In addition, Plath said BB&T's current model includes higher personnel costs because of the salaries of regional bank executives and other administrative employees. He said those higher costs limit the bank's ability to offer competitive rates on loans and other products.
Plath said BB&T should reorganize to focus on business lines, creating more division executives reporting to the corporate office. He also suggested changing how BB&T approaches reporting and incentive requirements for employees.
"BB&T is struggling," he said. "Experience says you've got to change that ... business model. You can only deny that you're a big bank for so long."
Most analysts said it is unlikely BB&T will scrap a model long espoused by Chairman and CEO John Allison IV, suggesting other changes.
Dick Bov�, an analyst in the St. Petersburg, Fla., office of Hoefer & Arnett, said BB&T should undertake a thorough review of all products and services, eliminating underperforming offerings.
Though they say large-scale layoffs are unlikely, some analysts see opportunities for BB&T to pare back its 26,000-employee work force. They say likely areas could include mortgage operations, as well as branch closings and consolidating tasks at various operations centers.
"I'm sure (layoffs) are something that BB&T will be looking at continually," said Gary Townsend, an analyst at Friedman Billings & Ramsey in Arlington, Va. "If t
bb&t has been doing all these things for awhile. these things take time to become effective folks, so dont get yer pants in a wad. have ya ever noticed how long it takes tax cuts on the fed level to show results? its like a marathon, the first 20 is what you hafta go thru to get to the last 6. during that first 20 you have many doubts as well as many hopes, so look ahead to the last mile. its gonna happen.
Critics question accounting policy
Calpers and Plath, meanwhile, aren't the only industry observers who want to see major changes at BB&T on a corporate level.
Bov�, at Hoefer & Arnett, suggested that BB&T hire a consulting firm to examine ways to become more efficient.
Bov� also was critical of BB&T's accounting policies. He said BB&T relies too much on cash-basis accounting, which differs from generally accepted accounting principals, or GAAP, by downplaying the impact of goodwill, or the price for the intangible assets tied to the deals, on earnings.
There are significant differences in the results from the accounting methods.
Using cash-basis accounting, BB&T had operating earnings of $355 million in the first quarter, up 6 percent from a year ago. With GAAP accounting, operating earnings totaled $334.6 million, up just 1.2 percent from a year ago, and net income was virtually flat at $328.5 million compared to a year earlier, according to BB&T's first-quarter filings with the Securities & Exchange Commission.
"To suggest that we don't use GAAP accounting is ludicrous," responded bank spokesman Bob Denham. "All of our filings start with GAAP reporting, but we use other appropriate measures as well. People have to see (our results) from all sides."
Addressing Calpers' issues with BB&T's auditing firm, Denham said the work performed by PricewaterhouseCoopers is permitted under the Sarbanes-Oxley Act and by the New York Stock Exchange and the SEC. He said BB&T has no plans to change what it sees as "an efficient model."
That response could lead to more action by Calpers, which said it could step up efforts next year if BB&T refuses to change. The fund said its efforts could include submitting shareholder proposals or looking to nominate a new slate of directors.
So far, BB&T has restructured its training programs in recent months in an attempt to improve lending and cross-selling efforts at banks it has acquired in recent years.
The changes include revamping the bank's lending curriculum to cross train commercial and small-business lenders and training younger bankers on how to improve performance during an economic downtown.
BB&T also changed how it trains retail employees, who were in Winston-Salem and then sent to any one of a number of markets. BB&T now trains prospects at offices in each worker's hometown, then allowing those employees to stay there once they finish their coursework.
Denham said more changes could be in the works. There is a team within BB&T University -- the name of the inhouse training facility in Winston-Salem -- that is looking at other ways to improve efficiency at the bank.
In response to the suggestion from Bov� that BB&T review its product lines, Denham said the bank already performs such evaluations on an annual basis.
part 3 (this should be all)
In regards to layoffs, he said BB&T could "ratchet down" the number of temporary and contract workers in its mortgage operations based on loan demand. But he said there are no plans to displace salaried workers in those operations.
And Denham emphatically dismissed the notion that BB&T would implement such a "radical" change as scrapping its community-banking model.
"Our model gives our bankers a lot more autonomy and brings them much closer to the client," he said. "It's the linchpin of our success. It's at the core of who we are."
Denham expects the educational changes, combined with an improved economy, will prove the skeptics wrong. He said loan volume and fee income both grew substantially in the first quarter and expenses were held in check.
"We're not where we want to be right now, but our performance is stronger than where we have been," he said. "Internal growth already has started to take place ... and there is a lot of potential in our newer markets."