Inlet -- I was just reading last week's mail yesterday. JA's Q3 report was in there, and I was pretty impressed with what I saw there. The charge-offs remain low, and the loan loss provisions seem healthy is relation to that. Also, the deposit base continues to grow (and I bet it will grow more -- I think BBT is poised to take a lot of Wachovia's clients in the SE). Did you read the report? Did you see any numbers there that concerned you...?
Final note: The emphasis from the telebears (viz, KF) has been on the residential-construction side of BBT's books. I think that argument has been crushed now by this week's actions by Treasury in the mortgage market. Now all the talk is turning to retail/hotel/etc commercial leases. I have no idea how much exposure we have there. Do you have any insights on that?
With any stock there are always numbers to be concerned about. The question is how transparent and true are the numbers.
BB&T has a lot of commerical loans. I do not know how much is commerical property financing vs inventory financing and other comerical purposes such as equipment purchases. If we believe management all commerical loans are conserative and well backed with asset liens. So even though you may see an increase in losses it seems to me BB&T has increased (and will increase) loan reserves sufficiently to cover any such losses. As a result earnings will be flat to down the next 2-4 qtrs as more money is allocated to reserves (tier 2 capital). All IMO of course.
Honesty and transparency are key. Unfortunately, they are best judged in retrospect. In BBT's favor is that historically their honesty appears to be upheld. Their claims of "No problems" proved substantially true while other banks' similar claims proved to be lies. I suspect that they clung to their conservative loan bias in all arenas and that bad loans will be identified but not at the rate that other banks will suffer.
For me the big question is less about what BBT has done but what it will do. Can BBT continue to make money at a pace sufficient to maintain or grow the dividend over the nest 18 - 24 months?