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BB&T Corporation Message Board

  • wigginsrd wigginsrd Dec 5, 2008 1:48 PM Flag

    This Recession and History

    The 81-82 recession was the worst in terms of unemployment since the Great Depression at 10.8% The current rate of unemployment in November is 6.7%. This recession is a long one. Currently we are in the 12th month and the average length of recessions since the Second World War is 10 months. No one knows how long this recession will last and ultimately how deep it will be. No one knows how long it will take to recover. What we do know is we all appreciate our jobs more now. We have more money in our pockets due to the lower cost of gas and with every passing day it grows more apparent by the strength in the share price, BB&T was positioned perfectly for the bad economic times we are experiencing. Another increase in the dividend announcement next week will only continue the shareholder confidence. May you all experience the thrill to buy a tank of cheap gas this weekend and just drive.
    rd

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    • One should also note that the 25 year average unemployment rate is 6.8%. That said, the unenmpolyment rate right now is average. We were spoiled with the 4.5%. Even if it baloons to 9%, a good chance, it still means 91% are employed.

    • There will be no decision made inre the dividend until after first qtr of calender 2009. Dividend increases are not normally announced by BB&T this time of year so I am sure even management and the board of directors don't even know what that decision will be at this time.

      rd is just wrong in thinking that any announcement is forthcoming before then. At this time I have no idea whether they will announce some token increase 4-5 months from now. I am reasonably sure given a need to increase reserves the next couple of qtrs that earnings will be under some pressure.

      Hope you are enjoying the ACC championship game.

    • Do your due diligence by going to SEC.gov website and look at the BB&T Investor portion of their website.

      To clear up the dividend discussion, BB&T's board has historically announced dividend increases in August. They raised the dividend .01 cent in 8/08 (try googling BB&T raises dividend).

      Secondly if you look at the agreement that BB&T signed with the Treasury upon receiving the TARP/CPP money - $3,133,000.000 you will learn that the Treasury set a limitation on BB&T that it cannot pay a quarterly dividend in excess of .47 cents per quarter for the next 3 years. You can find that in the 8-K report filed on 11-19-08.

      The critical question that none of us know the answer to is will there be pressure to stop banks (even relatively healthy ones) from paying dividends. The banking industry is highly regulated and the FDIC, OCC and state regulators definitely have the power to force the suspension of dividends in the event loan losses rise. I am hopeful that BB&T's reserves and focus on expenses can allow them to weather through the next 12 months that appear to be tough going.

      Hope some of you that are posting about increases in the dividend will focus on this message and adjust your expectations based on the facts and environment that banks face.

      • 5 Replies to thedividendisyourfriend
      • buynwily@rocketmail.com buynwily Dec 9, 2008 6:32 AM Flag

        Finally someone well-informed. The rest are delusional!

      • "To clear up the dividend discussion, BB&T's board has historically announced dividend increases in August. They raised the dividend .01 cent in 8/08 (try googling BB&T raises dividend)."

        The payment is made in August. The 2008 announcement was made June 24th. http://www.bizjournals.com/triangle/stories/2008/06/23/daily25.html?ana=from_rss

      • Good post. I don't think many are talking about expecting an increase in the dividend (I know that poster mentioned an increase). I am hopeful of the continuation of "a" dividend. I think that will be proof of the health of the bank. I know it will happen!

      • Good post, I believe it becomes increasingly more difficult for BBT to maintain their dividend what with falling income and increasing loan loss reserves. The question is at what point will the board deem it fiscally irresponsible to maintain the dividend? After all, the health of the company outweighs the health of the dividend. It's a possibility that the dividend just gets cut, maybe in half, which would still give you a decent yield. But, even if it is only cut, the stock will probably sell off a bit.

        Something an investor can do is buy some puts as insurance against a decrease in share price. You can also write calls to get some premium back, of course you have the danger of your stock being called away.

        I don't believe people should blindly believe that the dividend is so safe. History is some guide, but we are in a period of time that is unique and I don't believe anyone knows what will truly happen. I can tell you, if it was my company and we were making less money and the economic outlook is uncertain, I wouldn't be paying my investors as much as in the past.

        I'm long, I like the stock, I love the dividend, but I do own puts as insurance and it helps me sleep at night.

      • Well said. The only thing you left out is the early repayment potential

    • They increase the dividend once a year and this is not the timeframe for that. Just announciing the regular dividend will be awesome!

    • Yes, but what a signal if they increase it. Even if by a penney.

    • rd,boater,

      i have given that lots of thought even before this post. the dividend history of bbt is very important to the company and its leaders. important as to the character of the leadership as well. i dont know the answer to the dividend question, part of me thinks no cut is a victory in and of itself based upon this market.

      bbt, will in my opinion, do what needs to be done in the interest of the comapny and the long term stockholder.

      thats about as good as i got on this one, hope you are well,


      wilson

    • 29.17 at the close. Share holders should sleep well this weekend knowing an announcment of a dividend increase will be announced next week!

    • There will be no dividend increase at this time. Writeoffs will be increased so earnings will decrease by about 20% compared to last year's final qtr.

    • Kudo's on your post! You are right. As a BBT shareholder who once was frustrated that the stock stayed around the same price ($36 - $40) year after year, I am now so very thankful that this bank was run by conservative management that knew how to prepare for tough times and focused on providing the dividend, year after year. Thank you BB&T.

    • I am just as shocked now as a year ago when I look at the meter after filling my gas tank. Thanks for the well written message.

 
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