regional consolidations, changes in job descriptions and titles for key sales positions, hiring freezes, lay offs, changes in check vendors, changes in frequency and format of sales campaigns, fervent denials of mergers followed by correspondence to employees stating MOE would be good for company, freezes on branch renovations . . . . folks, these are all signs of preparation for a merger. I know. I have been through this a couple of times before with large banks I have worked with. My prediction, MOE in name only. John, Kelly and crew will retire or have token board appointments. Merger partner will be bigger bank who is actually the acquirer. BB&T as a brand will cease to exist. This would be the best thing for the institution in order to remove the regional management structure that just does not work. Good for the employees, good for the shareholders, hope it is sooner than later. And yes, I am a former employee, not disgruntled in the least. Just a realist.
Oh how wrong you are. (The following is my opinion) 1st Virginia had much different clientele. 1a and 2a type of clients (with heavy, heavy deposits). Sophisticated Treasury Management and systems (probably the best in the industry). BBT thought they knew better, brought in inferior products, pushed out the "rain makers", including the President of the bank (Anzilotti) who took the "rain makers" with him and all those large corporate and institutional clients. How do I know? I was one of them. JA was fooled by good ole Barry Fitzpatrick. Barry never contributed anything to 1st Va, was hated by most there and positioned the bank for sale over a 5 year period. That transaction was all about Barry and Shirley Beavers and a couple board members. JA even gave a merger package to the daughter of a board member who worked in insurance. She was just a lowly nobody at the bank. The whole story would make a good text book example of arrogance and greed gone haywire and how the acquirer really didn't understand what he was buying and who the "real" players were at the acquired. Stupid Stupid Stupid. Of course, all my opinion and others I'm sure would feel differently, hehe.
the yield curve is definitely a part of the slowdown. but we have to keep in mind, all the non-bank lenders who are having lots of problems were trampling each other to write high-yield loans that beat the yield curve. no prudent invester, human or corporation, would lend 100% value mortgages to someone who walks into a loan office and says "i need a no verification loan."
What do you do for a living?
I work at target in housewares, my husband is out of work.
do you know your credit scores?
Have a seat!!
conservative banking tries to avoid these disasters waiting to happen. that's why its such a great investment. hopefully BBT doesn't have too many of these on the books. HSBC bought $billions of these liar loans. and is paying the price. As long as BBT doesn't chase crap loans like the example, I'm staying put. Short puts that is. It's cheap leverage on a company I'd be willing to buy.
Very good post.
With profits down for BBT and others it would seem a smart move of management to actually merge with a larger bank and pursue major consolidations of back office functions. Cost savings by using someone elses brand vs. trying to promote your own?
I still personally see a BBT and STI merger as one which makes very good sense. Blood enemies can sometime work things out? If you cannot beat them "join them"? If not a marriage of these two then it would have to be one of the much larger banks such as JPM, C, WFC?
Another interesting dance partner might be WM, this would be a stronger fit for STI perhaps as they are about 20% larger in terms of market cap as I understand the numbers, which is not anything of terrific insight.
The yield curve is referenced by many banks as being flat or negative therefore the only way to maintain profits is to cut expenses and a merger pulls the start cord in a serious way?
WFC has been a rumor for a long time. Actually, due to some very recent experience I have had I really and truly believe Citi is trying to open retain bank branching operations here in the south east. I think Citi is the prime predator out there now for BB&T. Just an opinion.
not necessarily. I am a bank employee (not BBT) and have watched my employer get bought out 3 times. my best guess is cost cutting measures. No bank needs extra people when the mortgage market is slowing and risk premiums are growing. hiring freezes make sense. if you think your margins are gettnig thinner, you tell the teams they are not getting that new conference room built. and as for the musical chairs and constant upgrades to the business cards, that is standard operating crap in corporate USA. who cares.
now from an investment standpoint, needing to freeze renovations means they are getting a little narrow on the profit line. that might not be a good thing here.
but i have to admit: A merger in any name would probably play pretty well on wall street. I'm an invester. don't really care who runs the joint. and 4% yield, low teens P/E bank stocks aren't too hard to come by. I'll take a spike and sell...happily
All makes sense, and with all the bad news in the sector in general, why not test for support and this is probably in a trading range until something spills, but they cant stay a regional forever. Just dont know if JA will give any more hints this announcement. So far from broken, but asleep it is.