Good post gg. In addition, the bank has diversified its revenue streams - doing much more cross selling and taking major market share from community banks - 6/8/12 wsj - "Small banks have been on the retreat for decades. The share of industry assets controlled by lenders with $1 billion or less in assets has fallen to a recent 10% from 31% in 1992, according to Federal Deposit Insurance Corp. data. Smaller banks had a lower return on assets, 1.22% for the first quarter, compared with 1.52% for those with more than $1 billion in assets, the FDIC data show."
I live in south carolina. My representatives - Tim Scott and Jim DeMint keep on talking about how increased regulation have stymied the housing recovery - banks will not make loans to home builders.
Nothing could be further from the truth. Adc loans are simply not financially justified.
I get a kick out of Tim Scott. Six weeks ago he was pumping gas at an exxon station west of the ashley telling his constituents that gas was going to $5 gallon and Obama has no energy policy. He should have been well aware at that time that gas demand was down by 5% while US production was up 6%. These stats were available to Tim Scott via US Energy Dep't but he was too busy bashing obama. Also oil/gas rigs have quadrupled since 09. Best energy policy is America is free market capitalism.
I wish I could take Tim Scott to the wood shed. Irony is that he criticizes europe but his policies would kill our economy.
1980 decontrol proves your "free market" point. In the floor debates Senator Ted Kennedy wheedled that if we decontrol oil poor people will not be able to buy gasoline.
When controls were lifted, a flood of exploration companies brought so many new producing oil and gas wells online that by 1985 some companies were going bankrupt from the competition.
No, actually a bad post, quite a bad post. Is BB&T a 60s bank...not really. It is a thrift. To say that they were wise not to get into so-called exotic transaction forms is a non sequiter. BB&T simply did not have the business or financial acumen to understand these products. And it is not that these products are or were bad, the exection was awful, as fee takers, borrowers, and lenders alike all abused the system (along with our govt.) So lucky, not wise. Now their luck has run out and they are hoping to get lucky again.
And Norm, as usual your data is copious, but immaterial. Small community banks as a % of market share in 1992 compared to today is not germane. They were all bought out by...you guessed it, banks like BB&T et al. Now, circa 2009-2013, new small community bank formation is on the rise, since the shake out...and they are the only banks making loans right now. The CEO of US Bank said his bank, and those like it (i.e. BB&T) are NOT making those loans, and are losing share, but it is not important, because "we do not have to make those loans." In other words, the larger banks are losing share , but are sitting on loads of cash, loads of reserves, and their balance sheets are bullet proof. They are waiting for the market to come to them, but it ain't going to happen, which is why they are losing share.
Since 2009 aggregate loans for small commercial banks are down around 16% or around $120 billion. Plus they now have to conform to basel 111 where their common equity has to exceed 4.5% of their risk adjusted assets plus they need a 2.5% buffer. That came as a big surprise today when the Fed made the announcement. I suppose the small guys can meet this over the next few year as their assets continue to shrink largely because they do not have products to cross sell.
But what do I know? I can't hold a candle to queenfooey, smarty, inlet and nobanker.
To suggest that BB&T was lucky due to the fact they lacked the knowledge or sophistication to participate in "exotic" investments is simply an uninformed and inaccurate statement. What I'd say is that it was precisely because they did understand the risks involved they chose to avoid these products. I worked for the company for 30 years and over that period observed John Allison, Henry Williamson, Ken Chalk, Scott Reed and Kelly King. Now I'll have to say toosmart that judging from your posts alone you don't impress me as one who could go toe to toe with John or Henry. BB&T has grown from a $350 million eastern NC agricultural bank to $175 billion multi-state franchise. Other than criticizing this organization, what have you accomplished?