I've heard from three sources that BBT, ASO are both bidding for FATN. Who, by the way, just sucked up 5 small banks in TN in just 2 months. Their ripe for the picking. I think the stretch toward MD may not be the case. Go west young man.
I think that the chances of BBK buying someone else is very high. But - They must strike now while stock is high (maybe I was hasty in predicting that it would not reach $70, but I don't think so unless market in general goes nuts). They (and others) have significant pressure on earnings - many mergers, Y2K, slowing loan growth, etc. I do think that the "talent" they may be losing is not the heads of the banks/S&L's they are buying. These former exec.s don't know today's banking (that's why they had to sell!) and they are very expensive to keep around. Better to pension off for big bucks that then are finite and buried in the goodwill of the merger. The real cost is in their slow reactions and BBK can not afford that now. These are good guys (Aston was really good guy), but not the right guys! Finally, will Allison allow another really good, up to date banker into his mgt. team?? He hasn't so far - the power still resides with long time BB&T'ers. That's not the end of the world, but they have limited experience in running an operation the size BBK has become - and it shows. Keep an eye on the next quarter's efficiency ratio. It may tell what's coming. I bet it isn't any better and that will have a negative impact on the stock!
Finally, they have lost some strong middle management bankers recently. Aston and Morgan don't count because of their large salaries and rain makers status. These sre folks that have grown up at BBK. Not many (any?) SNB folks left. Why?? These were the folks in the trenches doing deals, adding accounts, and selling fee services.
Better to confuse the issue with a merger now - come on John - go for a merger of equals. Stock splits are nice and dividend increases are real, but I want to see BBK soar. Do something!
While I share your greedy desire to see maximum upside quickly on BBK shares, I remind you that the stock has indeed soared since 1990. Ninety percent of my net worth is tied up in these shares, and while I am nervous about this, I am still holding and waiting for signs of things to come. I would hate to see the end of the run in bank stocks and high PEs come before BBK gets acquired at say 4x BV. One more merger (BBK gets acquired) sets me for life. What a crap shoot. But, not fair to slam management for the job its done up to now. Lets see.
You seem to have been around SNB and BBT for a long time. Very thoughtful and insightful analysis. I enjoy your post.
This Aston deal has me thinking. I cannot understand why they let him go. I understand your rationale about salary, but its got to be deeper than that. He was really respected in Virginia I am told. The incremental differences in salry was not enough to justify letting an excellent banker go. Can it be because he did not agree with some new philosophy?
In Virginia, if they could only merge with crestar, that would lock Virginia up. Tennessee? Great thought and idea. Gotta think some of the big boys are looking at a heavy duty acquisition now that bank america and nations announced. Somebody wants a piece of md, va, nc, sc.
I keep saying, buy buy buy, this won't dissapoint you.
Given overall management picture within BBK, and looking at industry consolidation, I'd give 3:1 odds they will be receptive to buyout offer within next 12-18 months.
They have significant exposure should(when) the economy takes a turn south with default on loans.....enough to get in way of continued growth. 1Q growth was 20%. Staying in 12-15% net growth = challenge.
I own BBK stock. I'm closely watching (technical and empirical analysis) for a negative signal. Hope I don't find and they continue to double my shares every 3-4 years.