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  • dotcomdisplaced dotcomdisplaced Nov 12, 2004 12:45 AM Flag

    BBT future

    >> Their regional structure is expense. The larger they grow the more difficult it will be to remain "regionalized."
    The community banking model, with 37 community bank regions, is outdated. Have already consolidated six regional offices, including a pair in the Triad.

    >> Their internal HR and recruiters leave much to be desired in terms of professionalism and their ability to source talent. They would rather pay headhunter fees than actually recruit people on their own.
    This has always been a crutch for HR. Firms like AKA Associates and Coleman Lew & Associates feed off HR's incompetence. Why hasn't the "internal revenue enhancement task force" identified eliminating external recruiters for expense savings?

    >> The GA bank disapopints becasue they don't have the skill to compete in ATL.
    Lars Anderson has been a failure in building the brand in Georgia. Core deposits down in Atlanta, Gainesville, Macon.

    >> The incentive program is laughable.
    Capped merit-based raises at ~ 1%. Many have already posted the affect on morale and productivity. Read post 9025 by didiwah2112 for a good summary on this.

    Current operational issues can be directly traced to the pace and price of their merger strategy. They have overpaid for acquisitions since 1999 when compared to median price-to-book values. Prominent examples include First Liberty, F&M, and Century South at 350%, 295%, and 271% and Community First and First Virginia at 331% and 270%, respectively. Median ratios for these deals normally range 1.9x-2.3x per SNL. Management also underestimated the merger and integration challenges which resultingly have not produced the promised synergies. Allison now induced into slicing costs wherever possible, with employees being forced to sacrifice to compensate for five years of management mistakes.

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    • Here's my prespective on the regional network. Is it expensive? Yes. Should there be more consolidation? Probably. But Outdated. No. It is the very linchpin to BB&T's success. You don't forsake the game plan because you had a tough 18 months. The community banking concept is what separates and distinguishes BB&T from the bigger banks. Earlier this year, the national consulting firm Forrester Resrach Inc. named BB&T Corp as the top financial services company in the nation based on "customer advocacy." In a nutsheel that means that BB&T customers ranked BB&T above all other financial institutions in the U.S. for offering products and services that are best for the customer rather than its own bottom line. The community banking concept allows lenders more automony than its competition and moves the decision closer to the client. That's not corporate speak. That's reality.

      Yes, BB&T is not doing as well in Atlanta as management had hope. But you can hardly blame Lars Anderson. He just arrived in Atlanta eight weeks ago from Knoxville where he was the regional president there. BB&T's biggest problems in Atlanta have been bad loans it inherited through acquisitions and lack of market share. BB&T's branch network in Atlanta metro is small and sparse. That is why BB&T recently committed to opening several de novo branches in the Atlanta area. It's difficult to develop a brand when you basically have no presence. That said, the region has actually been turning around the past two years. Chris Henson, who is now a member of executive management in Winson-Salem, worked hard to clean up the loan porfolio. Lars is expected to carry on the momentum generated by Chris.

      The incentive program may be laughable. I don't know. But I'm fairly sure that it was the salary base that was capped at 1 percent, not merit raises. And so no one doesn't get the wrong idea, big companies use headhunters. BB&T is not an exception. Headhunters are more connected and in synch with the employement scene. Finally, I do have to agree that the company's appetite for mergers the past several years negatively impacted the bottom line. Whether they overpaid or not will depend on the eventual returns. However, it appears the company has turned the corner. BB&T exceeded analysts estimates the past two quarters and the stock price has responded extraordinarily well. It has hit several 52-week highs in the past two weeks.

      A few words to XSOTR. The majority of BB&T's upper level management team is located in Winston-Salem, not New Bern. Two members are in Wilson. BB&T's name is among the most recognized of all companies in the Carolinas. This is not true of course in the new markets. But BB&T's brand in the Carolinas is one of the most recognizable. I thought you might appreciate my bringing this to your attention since you are not an employee, do not own our stock and have only had limited dealings with the bank as a customer.

      • 2 Replies to wilsonbbt1872
      • Excellent reply!

      • Customer Advocacy and customer service are 2 different animals. BB & T trails in the latter. They sell service but can't deliver the promise because they are hamstrung with processes and systems that are outdated and couter productive to relationship management.

        While I realize that many companies use headhunters....its a problem at BB & T. The HR function at the company is horrible. They could do a much much better job on their own of recognizing talent and recruiting but they choose not too. Most likley because they lack the skill and sense of urgency. Don't even get me started on the ridiculous tests they put people through so that some other company they are paying to evaluate prospective employees can tell them if they will be a good hire. RIDICULOUS! I aced the thing and still think it is just a waist of time and shareholder $

        THe regional structure is archaic and should be scrapped. It adds to expense that is passed on to consumers. Being close to the client has little to do with being organized into 37+ fiefdoms.

        I maintain that the BB&T brand is weak. It may be known in the Carolinas by virtue of its long presence here but big deal. Throughout the rest of the markets the brand has little notoriety or respect. If they ever decide to do a merger of equals with a larger more established bank in another region I can promise the BB&T name is history.

        In regard to New Bern, I simply stated that all of the management has taken a turn through that city. I did not say they were located there. It kind of reaks of a good ole boy training camp.

    • You are so full of yourself. Investors, this guy doesn't have a clue. The only point he makes that has some validity is HR. How can you tell a college grad with no experience they are going to go into a training program and come out in 6 months and be a lender. It just isn't that easy and rarely works out. Plus, HR is focusing on grades and involvement and pay little attention to curriculum (i.e. if you are going to be a business banker or commercial banker you have to have a minimum of 9 hours in accounting to be able to figure out of financial statement). Outside the HR comment his/her spewing is total BS

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