Wow...did you see the news on the $200 million in new trust preferred securities being issued? I can't remember the last time BBT issued preferred securities. I wonder where they will price?
Common capital ratios
Tier 1 capital ratio = Tier 1 capital / Risk-adjusted assets >=6%
Total capital (Tier 1 and Tier 2) ratio = Total capital (Tier 1 and Tier 2) / Risk-adjusted assets >=10%
Leverage ratio = Tier 1 capital / Average total consolidated assets >=5%
Like I told you doofus - it is simple math ratios. To expand deposits (a non tier asset) beyond certain limits you have to increase your tier capital. You do the arithmetic if you are capable Mr Bundy.
I knew you failed basic arithmetic. Not real strong language skills either.
Deposits are not capital. Capital is funds raised by selling securities and retained earnings. So try and get it it through that marble head of yours. Regulations require a bank have a certain level of capital referred to as tiers to support loans made with demand deposits. It is a simple arithmetic ratio you math challenged doofus.
I can show you a bunch of REITs that own stable real assets, rather than rsiky financial ssets, and isssued preferred stock and common, both of which are better deals than this preferred. If as you, say, you want to just hold on...........
Simple yes...for you very complicated. You stll dont get it...oh well. its too hot to fish, so I am may as well keep illustrating the obvious. besides the fact YOU ARE RETARDED, about 30% of BB&Ts liabilities were in demand-type deposits costing about 2.5% per annum. that is the cheapest form of capital they have. That comes first on the wish list, (see previous posts addressed to numbnuts Inlet Moron for more). Tier I capital is NEVER on the wish list unless they HAVE to raise it. They do not raise it for any reason, let alone growth, unless they must. So if they are raising it now they are (a) telling you they have to, or (b) think they will have to. Now over the past 3 years, the asset base has increased a little over $20b, while all interest bearing debt has increased the same amount, and equity is little changed. Net interest margin has dropped from 4% to about 3.5% (a deacres of over 10%). HMMM can you say "leverage"....I knew you could.
Is it sinking in yet....no? OK, I'll keep going. Let's discuss the NEED for regulaloty capital right now, vs. the desire for same. It is never desired...so why do it, because (a)...see above. Also see previous posts from 123Mikes about the dividend and this issuance and then add in the net margin trends....hmmm....sinking in yet...No?
Can't help you anymore, lighweight, except for this hint, remeber when BB&T grew real fast in the 90s? And then didn't return anything to shareholders who bought after 1998? How do you think they increased their CAPITAL (as you call it).....they exchanged over-valued BB&T shares as currency. Can't really do that now, eh?
So, how to grow? Can't raise any more deposits w/o causing an Inlet MORON Capital problem, cant use stock as currency...hmmmm. More to come numbnuts.
I can see it all now, numbie under the rock with fweeqie at his feet, waaaaaaaaaaaaaa waaaaaaaaaaaa waaaaaaaaaaaaa no one is listening to me. I am important arent I fweeq, why wont JA and KK do what I saw, waaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaa, now now numbie its ok ole fweeq is here I'll listen now dry those eyes
Poor you, flunked basic arithmetic in high school I bet.
You cannot expand demand deposits exponentially and loan them out without a supporting CAPITAL base - regulations do not allow it. But since you are denser than granite I won't try and pound in the basic arithmetic of this. But, suffice it to say even if BBT does not do a deal and instead just increased deposits at some point they would need to raise capital to maintain requlatory levels of capital.
It is simple arithmetic doofus.
I must admit, I am usually not privy to complete and utter abject supidity, but once in a great while, someone as dumb as you comes along. I like people like you, though, because it makes the bell curve that much sweeter for the rest of us.
I think the former CFO's remarks were exactly on. What you fail to understand is that CFOs of large banks don't wake up every morning thinking their demand deposits are going to evaporate, and therefore they cannot be "counted" in the capital "picture." Quite the opposite bullwinkle, they DO count and banks want more more more of them, as that capital is, as the CFO said, free. Ask any executive if they would like to quadruple their demand deposits and would that impact their growth....they would laugh at you for even asking the question. "oh but that capital is not permannent, it may vanish tomorrow....the sky is falling!!!. You Nimrod, then why have demand deposits at all.....duh.
God you are dumb.
Mr Bundy, stick to selling shoes.
You said why didn't they just collect deposits if they wanted to expand? Then I pointed out to you there is a difference between demand deposits (it can leave whenever the depositot chooses) and capital which cannot. If you are preparing to expand say by acquisition of failed "good bank" assets from the FDIC then you need the tier capital base to support that expansion.
Clearly you are out of you depth trying to discuss bank finances.
Precisely, and what investments right now yield 9+%, plus A&G, plus a spread? Very few. This was cushion capital, as I said, and it protends something on the horizon. It is not "growth" capital for the reasons you mentioned and also because the issuance is too small.
As for Inlet Turd, what he fails to understand is if a bank is within Tier I Regulatory standards and they want to raise capital, they raise the cheapest form of capital they can, hence the dialogue I referred to with the former CFO. If they are not within regulatory guidelines, or feel their current levels are in jeopardy, then they go raise the expensive capital, which is what they just did.