After Lehman, bbt share did trade as low as $11/share and there are some folks who believe the banks, including bbt, will retest their post Lehman lows.
Is this type of sentiment justified?
Loans - Without colonial, up 1% since 12/31/08 but this includes $12 billion of run off from big problem loan portfolios - adc, commercial development and land, nonprime mtg and lot loans. Excluding the runoff bbt loans are up 13%.
Deposits - Excluding cds, up 24% since 12/31/08.
NIM - Increased from 3.68% to 4.15% from 12/31/08 to 6/30/11 even though bbt has intentionally reduced the duration on most of their security portfolio - $22.5 billion of their securities only yield 1.69%. Excluding colonial, nim is around 3.90% but the intentional reduction by bbt management in duration on securities is worth 15 to 20 bsp.
Delinquencies - Greatly improved. 30 day delinquencies have been sliced in half dropping from $2 billion at 12/31/08 to $1 billion at 6/30/11. 90 day deliquencies still acrruing have dropped from $431 million to $203 million over the same period. Nonaccruals are still very high at $2.2 billion but the loan loss reserve has been increased to $2.4 billion.
As referenced above the big problem loan portfolios are just about gone vs. 12/31/08 - adc has dropped from $8 billion to $2.7 billion, commercial construction and land have dropped from $5.4 billion to $2.1 billion and nonprime mtg and lot loans have dropped from $7.4 billion to $4.0.
Tangible Book Value - Up to $15.95 at 6/30/11, up $2.02 vs. 12/31/08.
EPS - Last qtr was $.44 per share, unchanged vs. the 4th qtr. of 08. As referenced in bbt conference call, 2nd qtr. 2011 eps was depressed by excessive credit costs which should rapidly diminish going forward. Even though the loan loss provision dropped in the 2nd qtr. 2011, it still amounted to 133 bsp, almost double the normalized level. The valuation allowance and foreclosed property maintenance expense for the 2nd qtr 2011 equalled $145 million. And personal costs attributed to foreclosed properties were around $150 million for the quarter. So the excessive credit costs reduced eps by around $.47 share for the quarter (assumes 25% tax rate). If mortgage securities had been invested in average duration securities, eps for the qtr. under a normal credit cost scenario would have been $1 per share.
So is bbt going to retest $11? I don't think so.
But what do I know? I've been buying and will continue to buy if share price continues down.
Bbt has stated that their dividend payout ratio is 30 to 50% and with eps likely to increase to $1/qtr. the current yield of plus 3% should double over the next 12 months.
Think Kelly King has been getting a bad rap but so have vitually all ceos of good commercial banks.
Some here seem to respect all your efforts and fundamental analysis. The problem is, this market has not followed the fundamentals or technicals for that matter since 2007.
All this effort by posters on any/all of these message boards is a exercise in futility.
If you want an indicator as to when to get back into the banks and financials, simply monitor the BKX index and when it breaks above 50, you can begin to dip your toe back in, but not before.
A very astitute trader has said repeatedly; "as go the piggies, so goes the poke."...you'd all be well to heed that little ditty.
dude, after the rally into late-2011-early-2012... there is going to be the most awful crash, these BBTers have no idea what is coming...
...or you can listen to norm spout off how the stock has only gone down 50% in the last 13 years
Thanks for the clarify. I used the wrong share-count which will also change the PPTI/share figures I commented on upthread.
On rf and snv I still like them though I sold RF a while back and started re-buying last week. They aren't great but I think they are cheap and someone will want the deposit base eventually. But you probably get better return with Bac and C which I also was buying/adding last week and you commented on. I haven't looked at ffch. My thinking is that with such large banks so cheap its not worth moving into the smaller players.
"You'll have to show me the math on this one Norm."
Fair enough. Started following bbt in 2001. Reference their 10k for 2001. Gives 6 years history on page 57. In 1996, total shareholder equity is $3,624 million before any goodwill and intangibles. Common shares outstanding at end of 1996 were 447 million. Excluding goodwill/intangibles, common equity per share is $8.10 ($3,624 million divided by 447 million). Tangible book value per share at 6/30/11 is about $16.
Any opinion on snv or rf? I like ffch and have been buying in mid $5. Tbv is $11.83. Owes $65 million in tarp but will be paid off this year. ALL is adequate. Good mix between consumer and commercial loans. 75 branches on coastal carolina and hilton head - an area favored by retirees. Solid nim at 383 bsp. Decent noninterest income vs. expense. Delinquencies 30 to 90 day are about .9%. Took big provision in most recent qtr which help kill stock price - got burned by land loans and commercial construction. Used to earn $2 share. Believe it's likely they'll recover or get bought out. Leading deposit market share in many of their markets.
C, bac and ms share prices are rather amazing.
" their tangible book value per share has doubled even though they bought a bunch of banks and insurance businesses at premiums to tangible book value."
You'll have to show me the math on this one Norm.
In 1995 BV was 15.52$ Now there was +ve GW and -ve GW in that BV number back then and I didn't unpick it in detail but it seemed like a wash from the quick look -- so in this case BV and T-BV /sh seems reasonably close. If you show me the math where T-BV is materially lower in 1995 I'm happy to revisit.
For 2010 T-Bv sh $15.43
So over the 1995-2010 period (same period you used for your PPTI 12x comment upthread [vs actual of 108% per share]) seems flat to me.
You need this bank cheap - It hasn't got a good history and Kingster doesn't fill me with confidence.
3 years ago i left this BBT message board, told everyone to roll out of BBT and roll into AAPL
and even if you were late to the party, there was plenty to gain still left to jump on
nobank, you asked me about a year ago to come back to the BBT message board to help explain it to them all of why BBT was not the place to invest, but what concerns me is i have no idea why you even bother to joust with norm or any other BBT message board poster, it is completely pointless, the LONGS are so far off-base we can't even drink an entire beer without laughing... BBT is negative red chart since 1998 almost exactly 13 years to the day, and norm is gonna sit there and explain it off with all the excuses... and the shareholders that sit there and take that crap? they are the biggest stoopiest idiotoes to take that crap from the upper management, those shareholders are getting exactly what they deserve, a big red loss of money on their portfolio return holding BBT, and that beyond stoopid remark that the dividend is worth holding, please, don't insult yourselves anymore, it is getting embarrassing already...
...sounds like a scolding lecture to shareholders? you're right, cuz that is exactly what it is... and where my facts to prove my case? let's start with the stock price, shall we?
i don't just tell you where you shouldn't invest, i tell you where you can invest, and not many can say that
try to have a good next 13 years..hehe
regional banks, what a laugh
Sorry buddy, but the definition of insanity is doing or saying the same wrong thing over and over again hoping to get a different result. You need to drop the rose colored glasses. BB&T has been a loser for over a decade. Its credit model is antiquated, simplistic and poorly managed. You can go ahead and buy....you may be a holder from back in the 90s...you will be underwhelmed with returns for another decade, Keep thinking the street will see it your way. There is sooooo much wrong with this bank. I cannot post it all here,
I have always liked your postings. Believe that major concern for BB&T (and other banks) is still loan liabilities. If economy gets worse loan losses will go up. Some bank share prices are forecasting worst case (ie. BBT and WFC).
I have again started to repurchase and plan to average in either over the next six months or as share price declines. Will not sell till price gets back above $40. Might take a few years but I can wait.
Have been very outspoken about Kelly King. His 2010 pay package is criminal in my opinion. How do you think the employees who earned that money feel about his pay package?
Good luck to all
Not only the CEO of BBT but CEO's of all American corp are way over paid. I do believe there is collusion between B of D's and upper mgts. There is no logic what so ever that ANY CEO receive the kind of pay package they receive. The profits do not belong to the CEO, they belong to the share holders. If the exorbitant salaries were reduced to reasonable, the dividends could be higher. This is a problem that could be remedied by the stock holders if they were ever to wake up.
You will not sell until share price hits $40? When did this stock last have sustained trading at this level, and how long do you intend to hold? There is a cost in this strategy. The best trade here is volatility, not buy and hold. You could be looking at treasuries at 7% in a few years and you are stuck with a BB&T hold strategy that is paying 4% with no chance in hell of the price moving up to $40. You might be sitting on this investmenet for a decade. As for Norm, he often gets "paralysis by analysis". He goes to great ends to show the positive metrics of the company, but in reality, the street is not looking at these things and have not for many years. BB&T has no loan growth...zippo.... and they pay NOTHING for their deposits (thanks to the fed keeping rates at zero). This does not a bank make. You should stay away from financials for some time.