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  • spin.vestor spin.vestor Oct 19, 2012 2:23 PM Flag

    Norm - What do you think?

    "I read the transcripts of jpm, wfc, usb and pnc. Think I understand. Then, I read bbt transcript. I'm confused. The transparency is not there particularly the reports provided by Clark Starnes, their chief risk officer."

    Come on Norm - BBT has always played shell games with there accounting to hide the poor economics. Transparency has never been there.

    Oh wait... This explanation from King should help:
    "Matthew D. O'Connor - Deutsche Bank AG, Research Division
    Yes, I guess I'm still a little confused. I mean, so the purchase accounting accretion
    will be coming down from this level going forward as it has been. And then, I mean --
    is that $90 million? I guess -- I know there's some puts and takes, but I assume that
    should be coming down...

    Kelly S. King -
    Say, Matthew, let me hit it because it's always been confusing to me. But basically, so
    think about it this way. The revenue is coming down, but the negative FDIC hit is coming
    down also. So in other words, you get a negative end, so revenue is coming down, but you
    got a positive and that the negative FDIC charges is reducing. The FDIC charge is not going
    up, it's going down, that's the positive benefit."
    -BBT Q3-2012

    Spin

    • Contrary to what Mr. King says, the fdic charge increased during the quarter even though the covered loan net interest income ramped down as expected. An obvious contradiction to the question.

      I'm not clairvoyant and certainly did not expect adc land to become almost worthless so I gave bbt management the benefit of the doubt. However, in April of 2011 I asked Mr. King directly at a shareholder meeting about the $1.2 billion charges to foreclosed property expense with most of it valuation allowance. Response to my question - worst is over. Well that did not happen. Bbt has charged an additional $.9 billion to foreclosed property expense. I've lost track of the mark on foreclosed property but its got to be 85%.

      I don't know what's going on here but with only $139 million in foreclosed property expense which has been written down mucho and real estate values starting to raise, it is unacceptable to see a continuation of significant foreclosed property expense. How come virtually every big bank in America has not had anywhere close to the foreclosed property expense reported by bbt??

      Yes, it has been a shell game to preserve shareholder value but it's time to play it straight up with respect to some of the questions I've raised.

 
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