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BB&T Corporation Message Board

  • STKPICKR STKPICKR Apr 14, 2009 1:56 PM Flag

    A Perfect Storm - Goldman has BBT on Conviction Sell List

    Goldman Sachs added BB&T Corp (BBT.N) to its "conviction sell list," citing high exposure to residential construction and expectation of further reserve building due to economic deterioration in the Southeast.

    BB&T's nonperforming assets (NPA) continue to accelerate and its residential construction, which is well above average exposure, will remain a major concern, Goldman Sachs said in a note to clients.

    "We expect a 'perfect storm' for NPA formation in the first half of 2009 with both deteriorating house prices and rising unemployment leading to the fastest rate of NPA formation since the start of the crisis," Goldman said.

    The brokerage also cut its price target on the Southeast regional bank by $3 to $14 and lowered its 2009 earnings view to $1.10 from $1.25 on the bank.

    Goldman added that BB&T has been the least aggressive in writing off legacy construction loans as it has taken charge-offs equal to 22 percent of its seriously delinquent and non-performing construction loans compared with 34 percent for peers.

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