We believe that BB&T is a good buy for the following reasons:
BB&T is selling at an attractive forward earnings multiple of 9.6 times 2013 projected consensus earnings.
BB&T has a solid balance sheet with $5.44 billion in cash.
BB&T has a very attractive 3.00% dividend yield and a history of consistent dividend increases with the latest dividend increase of 15.0% earlier this year.
S&P has a Strong Buy rating on the stock (5 out of 5 stars) and a 12-month price target of $35.00 per share, which is 16.0% above today's price
Imo, this bank has a big credibility problem. I think the Fed shares my opinion. The reo valuation adjustment is just one example. Shareholders over the last several years have been bombarded with about $2 billion of charges via the valuation adjustment for additional marks. No other bank in America has reported relative charges anywhere close to this magnitude. Yes, I understand estimating adc liquidation values is very subjective but the transparency showed by bbt in this area is very fuzzy at best. In April of 2011 at the annual meeting - q&a session- I asked Mr. King directly about the valuation adjustment. His response proved to be inaccurate.
Their bonuses should be clawed back since they flunked the Fed capital plan. Expanding the BOD is not the answer - we need better management and increasing emphasis on wealth management, particularly discount brokerage, an area where bbt is not competitive. Expanding in Texas is fine but how about consolidating some in their core areas. Mobile banking will become more important - branches are losing importance. About 2300 branches shutdown in 2012 (nationwide), about 2.5% of the banking sector and an estimated additional 15000 branches will shutdown over the next decade. How many branches did bbt shutdown or will shutdown?
PS - S&P downgraded bbt but left their rating at 5 stars. Credit Suisse prepares much better and comprehensive reports than s&p.
Good luck. Bbt 1st qtr. results will not be too exciting assuming no accounting manipulations.