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  • matollionequay matollionequay Feb 11, 2009 3:53 PM Flag

    BB&T Analysts Conference Call

    Was there any meaningful discussion of the commercial real estate loan portfolio?

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    • Conference call is almost 7 hrs in duration.

      Only had about 1/2 hr. so I flipped through Kelly King presentation. Some of the highlights are:

      1. 2009 net charge-offs were projected at $1.4 to $1.5 billion. King said that based on everything he knows today he's comfortable with this projection and said Kendall Clark would go into detail later in day. He said net chargeoffs were projected to drop off in second half of 09.

      This is very good news considering that 4th qtr. provision was $528 million and destroys the credibility of Dick Bove's forecast.

      2. Dividend - Assuming bbt does not bomb out on net chargeoffs, the dividend is safe according to King. Imo, I think there's a good chance that come the second qtr they may actually increase it modestly if net chargeoffs are still projected at $1.5 billion for the year.

      3. CCP Money - King wants to be the first to give the Treasury back their $3.1 billion. Said that the bank reluctantly accepted the funds. However, the funds can not be paid back until year 3 otherwise the transaction is dilutive to shareholder equity (gov't gets warrants and common stock). This is great news because bbt will be earning an additional $450 million thanks to ccp money.

      4. King said bbt should be coining money left and right once net chargeoffs tail off. Pretax earning before provison was been growing at a compound rate of 22.4% over last 10 or 20 years.

      5. Pricing has improved significantly, up 125 bsp. King expects pricing will continue to improve with another 175 bsp to be realized in subsequent years. New loans are being written with floors and customers have offered little resistance.

    • Yes there was.

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