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BB&T Corporation Message Board

  • ayscuew ayscuew Dec 1, 2010 5:59 PM Flag

    Where now??

    Kelly King will meet Goldman Sacs on Dec. 10th. In my opinion he will say about the same thing he said in the financial conference on September 14th.
    Fourth quarter is going to be good guys. Salaries and bonuses depend on it. TIME TO BUY!!!

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    • Norm I sold 10 Dec 26 puts several months ago for $1.98. Now you have me wondering whether I want the share price above that on strike date or not. Maybe it's better for me to pocket the 1.98, keep the shares, and watch them rise big time.

      You have been a supporter of BBT for quite a long time. The gist of your thesis is that write-offs will someday end and in some cases be reversed into income.

      When?

      I

    • The 4th qtr. will be a ditto of the 3rd qtr. Huge charge-offs driven by land, land development and lot loans. Loan growth will be good, probably 2 to 3% sequentially excluding adc runoff. Bad land loans are almost at the bottom of the barrel. I think the right size of the adc portfolio is about $2.5 billion so we only have another $1.3 billion to go and I look for a good chunk of this to be removed from the adc held for investment portfolio this quarter.

      Got a benchmark on excel spreadsheets at investor village now by quarter to measure Bbt performance and I'll be tracking it. Going to be interesting to see how much credit suisse will miss their estimate.

      I'm very interested in hearing King's comments next week. Overall I think he's done a nice job with the exception of the handling of bad land loans. He should have said at the
      start of this mess what the marks were on bad land loans. My guess is that initially bbt was taking an average mark on land loans of 35% and then had to bump it up to 60 to 70% to dispose of it, taking the additional marks largely through the valuation adjustment.

      I'm not faulting King on the higher marks. No one could have predicted that bad land loans with a 65% ltv would only bring 20 to 30% of the principal amount upon liquidation because of a dysfunctional real estate market. I am faulting him however on not be transparent and straight forward with shareholders on the subject of bad land loans. On the other hand, the way things worked out here - back loading charge-offs- minimized dilution to shareholders plus it has given shareholders a great opportunity to buy bbt shares at bargain prices late in the credit cycle where the risk has essentially already been defined.

      With the exception of land loans Bbt performance through this credit cycle has been excellent compared to competition. Significant improvement in nim. Successful acquisition of Colonial. Loan and deposit growth. Very good expense control. 85% performing tdrs. I'm going to give King a B plus.

 
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