BBT must act now...buy or be bought. The big boys
are closing in on them. If they don't continue to
grow, they could be left behind as a second-thought,
has-been, fill-in, pick-me-up for a larger institution at a
I have been a holder of BBK for eight or night
years and have watched it grow from under 6 Bil in
assets to over 30. It has split a number of times and
has increased its dividend regularly. The total
return has been 15% plus and it has been a very good
investment. I like smaller regional banks and own quite a
number (SNB HBAN OLDB). This is a good one, too.
Alas, my contacts say you are right about BB&T
losing emloyees. Not only are $$ an issue, the fear of
being bought is real and a compelling reason to leave,
provided it's to a much smaller bank or much larger one.
Let's face it, bank's BBK's size are fighting to stay
alive. Of course, as investors, what do we care?
The discussion around BBK's management is another
matter. A major issue is the community bank concept vs.
cost. Yes, Dr. JJ, it makes for excellent customer
service, but it seems to come at a price. An examination
of the operating ratio at BBK and others is very
enlightening. BB&T's improvements in efficiency which were
impressive for a while have slowed dramatically. I grant you
that it gets harder the farther you go, but others
(5th 3rd for example) seem to have figured how to drop
below 50%. If Y2K expenses are a problem (& I think
more and more banks and other companies will restate
those costs as tyhe year goes by), then it will be more
and more difficult to achieve sub 50% levels. I
understand that the old Southern National was really tough
on expenses. BB&T may be too, but my contacts tell
me they talk a good game, but are weak on delivery.
It sems to me that their numbers have been pretty
good so far (aside from my observation on slowing
improvement), but my contact is adament that expense controls
are "lax." (She was an old SNB'er)
the 3rd quarter will tell alot. Don't count on a
teriffic operating ratio. It is because of this that I
predict that BBK will anounce anotrher merger/acquisition
by then to cloud future earnings.
I agree with your assessment of employees. And
they are being called weekly by headhunters with
offers of 20-40% salary increases to go to other banks.
Volume and small spreads will hurt only if you have a
lot of unhedged fixed rate loans. Acquirers of all
sizes have been doing welll..NB, FUNB, ONE, and yes
BB&T. I also agree with your assessment of BB&T re
location and track record. They're good....and nobody is
I attended the Graduate School of banking at the
University of Wisconsin...had long been a BB&T shareholder,
since 1991...and was impressed by the quality of
students (lower management) sent to the school by
If you have paid close attention to the bank
industry, on a nationwide basis, the very big banks,
and/or, the buyer banks overall returns have fallen well
behind the regionals and small banks. There are a number
of reasons for this, and I also feel that if the
economy falters and interest rates rise dramatically, the
bigger banks will be hurt more than their smaller
brethern (banking on volume with small spreads can prove
fatal if rates move against you).
There are few
banks in the country situated as well as BB&T to
provide ongoing steady returns to its shareholders AND
Don't those rose colored glasses get a little
difficult to see through? BB&T is a good bank with lots of
good people, but the market is changing very quickly.
The quality of employees necessary to meet the market
demands is also increasing almost daily. At the same time
the bank infrastructure is getting flatter creating
less opportunity for career growth. You can't demand
better and brighter and harder working employees without
creating a better working environment and at minimum,
market rates of compensation. The difference in a $10BB
bank and a $30BB bank is the number and quality of
employees....and the effect of all managemnt decisions has a
broader, more far reaching effect (good and bad). Anyone
not in the banking industry for the past 10-15 years
would have a hard time understanding the change in the
marketplace and the demands on bankers. This is not a
criticism...just an observation!
You forgot to mention that ASO has excellent
management. They are split about 50:50 between "old" ASO
folks and "new" folks from major regionals like First
Union, Mellon, and others. This would certainly add
breadth to BBK's management group, provided that a deal
could be struck that would finally incorporate the
best, not just BBK, management. Both groups would help
the other, but a true team would have to be formed. I
don't agree with the earlier post that BBK's management
is weak, but they are inexperienced with a 30 BB
bank to run. I completely agree with the excellent
analysis of technical weakness (compter type - not
financial analysis type) that was posted earlier. I think
this is the true dilema that BBK faces. My earlier
comments on Y2K stand. ASO could greatly enhance BBK's
position here. Finally, ASO has a tremendous amount of
momentum going for them. I agree that their markets are
only OK, but what energy they demonstrate! These two
would be an excellent match.
Having said all the
above, I doubt this deal will happen. BBK isn't looking
and ASO's momentum will fool them into thinking they
can survive. Pity...
AmSouth Bank based in Birmingham is one of the
four major B-Ham banks. Solid portfolio good yields
(excellent stock performance as of late)overall great second
qtr. truly outperforming all expectations. Market is
stretched thin, third in AL,with about 3% mkt. share in
Fla., a small presence in southwest Ga., and growing
mkt share in Tennessee (most notably in Chattanooga).
All in all, well run, upper-level turnover seems to
have paid big benefits. Size is around $20B, a little
big for BBK but certainly doable. Would place BBK in
desirable markets, good strategic move that could lead to
big windfalls in Tennessee and Alabama(The onyly
So.East states with multiple "swallowable" banks for
BBK). BBK's NC market share is tapped out, as evidenced
by a couple of dissenters in their acqusition of
UCB. Alabama and Tenn. are wide open and a ASO BBK
merger could give BBK a heck of an advantage in grabbing
market share where it is still available.
Thank you my good man.
I'm going to get
lots of hate posters, but BBT will kick Wach any day
with customer service. That means alot in banking
today. Especially with these mergers. But I see your
Excuse my ignorance, but tell me more about ASO and why
it would be good for BBT?
Right on my good man.
especially when the divisions are decentralized. A big boy
is no differen than the little one.
I have a
good story for you young whippersnappers. FUNB is
advertising banking by phone and the PC. Its no big deal to
me, but lots of OLDER americans hate the crap. They
hate ATM's. They call FU and they get transferred to
Charlotte. I call BBT I get my branch, I see my bank people.
None of those STUPID phone systems. (don't believe me,
call fu and BBT)
Whats my point?
people have lots of money. We like banking where we are
treated as people in our towns. Like BBT.