Finally some good news with wording like aggressive acquisition strategy: "BB&T Corp., the North Carolina lender that took over 22 banks in 10 years, is hunting for more acquisitions in Texas and the Midwest, Chief Executive Officer Kelly King said.
“If I want to have a diversified bank, which I do, then I need to have a diversified marketplace,” King, 62, said in an interview last week. “Mergers are going to be an important part of our growth strategy going forward. We expect to be aggressive.”
Having a foothold in markets such as West Virginia and Kentucky helped BB&T stay afloat when housing markets slumped in Florida and Atlanta, King said. BB&T, based in Winston-Salem, reported a 12 percent increase in quarterly net income last week and stayed profitable through the financial crisis.
Banking analysts have been predicting a wave of consolidation among small and medium-sized banks amid slack demand for loans and rising costs from new regulations. King said he’s interested in high-growth markets as well as more slowly developing areas, where the “pace of life” breeds customer loyalty.
“We very much would like to have a good partner in Texas, particularly one that would give a larger branching network and better retail presence in the market,” King said.
BB&T already has 31,000 employees at 1,800 offices in regions that include North and South Carolina, Virginia, Georgia, Texas, Tennessee, Maryland, Indiana and Washington, D.C., according to the bank’s website.
The 22 previous takeovers included Federal Deposit Insurance Corp.-assisted purchases of Montgomery, Alabama-based Colonial Bank in 2009 and Haven Trust Bank in Duluth, Georgia, in 2008, according to the bank. That helped build deposits to $107.2 billion and assets to $157 billion by year-end, ranking BB&T ninth in both categories among U.S. commercial banks.
The stock closed yesterday on the New York Stock Exchange at $27.36 a share, or about 1.9 times tangible book value, compared with a ratio of 1.78 for the 24-company KBW Bank Index, according to Melissa Roberts, a quantitative research analyst at New York-based investment bank KBW Inc.
BB&T has the best profit and capital levels of any large bank in the South, according to Chris Gamaitoni, vice president of research at Compass Point Research & Trading LLC.
“They’ve been pretty vocal about wanting to acquire, and they’re in a good position to do it,” Gamaitoni said in an interview. The Texas economy is stable or improving, “and Texas credit has some more stability around it,” Gamaitoni said. He rates the shares “buy.”