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BB&T Corporation Message Board

  • legacy_triad legacy_triad May 28, 2004 1:50 AM Flag

    Whose team are you on?

    It is premature to talk about mergers at this point, because WFC and others are not willing to pay what it would take to get JAA to sign over his life's work. In a year or so, if pulling the levers does not produce at least 10% EPS growth, then BB&T may be looking at a deal with a stronger performer.

    The changes(pushing levers) currently under way are designed to get the growth moving.
    These include:
    1.)cutting cost in non-client contact areas
    2.)merging selective regions to improve efficiency and reduce overhead ("mini-mergers")
    3.)moving greater numbers of experienced people from the establish BB&T footprint to new areas to increase the rate of change
    4.)Increasing production goals and incentive hurdles for client contact areas.
    5.)Management changes to prepare the next group of upper level talent.
    Also, the economy has picked up in the footprint also.

    If these things do not change the rate of EPS growth as needed, then BBT will be sold, but only after these changes have run there course. (Unless WFC goes crazy and offers $50/share)

    For Stockholders, the point is this, either the performance improves and you win, or the valuable franchise is sold and you win. (This is JAA's genius as a builder)

    For Employees, There will be stress from the changes, with new managers, increased goals, generally higher pressure.
    The employee turnover has increased, which always happens with times of increased organizational stress. This can not be allowed to get out of hand! Working (hard) at BB&T is still better than what one would find at alternatives, It does matter who you work for! The key for the employees (Managers listen up!) is to not lose site of the customers(read "revenue") with the inward focus that comes with the current internal changes.

    BB&T has the team to pull this off, thay have to stay focused and reward the people that are doing the pulling.

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    • I don�t believe it�s premature at all. A look back at bank mergers has taught us to expect the unexpected.

      #1. Cost cutting is happening but its not enough and a lot of it is superficial. Do you really need of the redundant layers of regional management? You can still operate with a decentralized business model and not have the current high cost of doing so.
      #2. See my response to #1
      #3. BB&T has moved its legacy employees to new regions for years and has it really made an impact on employee or client attrition? The bank has moved/promoted so many of its legacy employees so frequently that the internal consensus is that many folks have been over-promoted.
      #4. Increased goals for client contact areas? Most of the line hasn�t been successful in obtaining previous goals. BB&T is largely a credit driven bank (its integrated relationship management concept revolves around it) and the line hasn�t been communicating effectively with credit. For a bank that prides itself on its sales culture the supporting cast members that offer the ancillary services (and related fee income) that are so important to the bank are not of the same caliber as the front line.


      JAA�s genius as a builder? Are you a delusional cool-aid drinker? The idea of perform and profit or sell and profit isn�t a �John Alison original.� Its survival of the fittest.

      Is working hard at BB&T better than the alternatives? Again another delusional statement. With the industry still placing a premium on the acquisition of smaller banks what�s is to say that the equity that frequently comes with a de novo might not be a very rewarding alternative? Additionally, the shelf life of another bank may be longer.

      Essentially your post reminds me of a regurgitated version of one of John Alison�s press releases from the BB&T web site.

      • 1 Reply to iagreewithtom
      • I think you have a tough argument that JAA is not an awesome leader, When he came to the Bank, it was an afterthought - soon to be left to the junk pile of NC bank consolidation. Instead, we grow to be one of the largest banks in the US, while staying highly profitable. His genius was not perform or sell, it was putting together an efficient franchise, that would be very marketable if sold, while still grounding the organization in a strong philosophy and training the employees well.

        I know there are many questioning whether BB&T is a better place to work or not. I have thought about this at length, but I think it is a better place to work. I am sure a community bank would love to have you, if that is your choice.

        As for item #4, This is a point well taken. The goals have been raised to a very high level, and I am not a fan of the incentive system as it stands. The higher goals are ok with me, as long as the employees are fairly compensated for the value that they deliver for the bank.

    • Could Legacy and Fan identify themselves so we know which part of the BB&T propaganda (excuse me, investor relations) department you work for?

    • Your points are well taken but buyers know of these savings and certainly can factor them into offers so it works out as a wash. Mergers occur for two reasons, money and money. If there isn't enough being made by the company and the holders aren't fed enough you get sold. If you don't preform and the market looses confidence, you get bought. It would seem to me that both scenarios are in play and JAA may not have a choice. His fiducary responsibilities outweigh any personal considerations he may have and if a viable offer hits the table he has no choice but to present it to the board and then ...who knows. I just don't think he has the time to pull of a restructure that will re-engage the employee base enough to produce the bank out of its current situation. I personally hope I am wrong because the history of this bank in North Carolina is storied, financially....I hope it sells tomorrow.

      All IMHO of course

    • That's a good post. I assume that your five points came directly from mgt? They have never been communicated to us. It would help if the peons knew what the strategy was. Instead of "Keep your head down and just do your job." People at all levels are a lot smarter than management thinks and can understand change if they just know what is going on.

    • Very well said; win/win either way

      Fan

 
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