I have been a long-term investor in BBT, but I am concerned about the ramifications of taking bailout money. In particular, I was reading a recent SEC filing and noticed that they cannot
raise their dividend or buy back their own stock (without fed approval) until 2011. I have been a bit surprised that I have not heard much on this board about this issue. Did I misinterpret the document, or is this something that is well known and thus not worthy of discussion??
As I understand it they are talking Alt-A (no doc or low doc) mortgages which are due to reset starting in January - if you are referring to 60 minutes expose.
This was not new news, I recall this being discussed at least 6 months ago. I believe it was decided after discussion here BBT has little exposure to this type of reset mortgage. Second, in case you have not noticed interest rates (ie LIBOR peg) are down and resets could well be lower not higher next year (positive for these loans?).
Dirt cheap acquisitions are a plus for BB&T. I think they will stick to doing these in their current 11 state area of business. They will attempt to increase density in areas where they are not #1 or #2 in banking (should allow for more efficient and profitable operations).
As to Commerical loans - I'll take a swing at that also. Many commerical loans are have reset features. Now for the most part commerical loans are self paying (income from commerce more than pays the mortgage costs).
The supposition is that loss of tenants etc may drive this income below what is required to cover mortgage payments. Guess what, many commerical loans are not structured like home mortgages. For example it may be a 5 year mortgage with a balloon, a Joint Venture loan (multiple responsible borrowers). Generally such loans are variable rate and get reset so any loss of tenants and income could be offset by lower interest expenses.
Finally, management seems confident that it is a managable issue. Let's see how this qtr turns out and then we will have a clearer picture on CRE.
Six months - still muddling?
One year - problem loans and write offs on the decline and stock price up?
Five years - BBT is operating in 20 states, and doing great!!!
Now how is that for a crystal ball. Hehehe
Come on...Inlet or anyone else here... please dig that crystal ball out of the trash, start looking into it and tell us what the future holds. Is the second wave of foreclosures discussed by the talking heads all weekend going to negatively or positively affect BB&T? What effect will these dirt cheap acquisitions have on share holder value? Finally, when the wave of commercial foreclosures hits how big will that be? Where where the share price be 6 months from now, 12 months, 5 years? Inquiring minds want to know.
I for one am a believer in BBT having been a long time investor and having participated in this message board.
Inlet's comments and insights helped in converting a doubting "Thomas" to a true believer, especially on CRE.
TARP participation is a twist to the banking industry.
The interview with JA was illuminating.
I believe this was discussed here in some detail.
Sorry to diasppoint you.
I'm not sure it has been discussed very thoroughly. Of the 20-something threads on the link you provided, only three seemed to understand that there will be no dividend increases or stock buybacks for the next three years. So I guess my question is this: How does the fact that there will be no dividend increases or stock buybacks for the next three years affect the value of the stock to the folks on this discussion board?