Moody's went on to say that BB&T "remains a comparatively well-managed franchise," outperforming "most of its Southeastern and regional bank peers by reporting positive earnings throughout the past few years," and that the company has "consistently strong capital, and a healthy level of pre-provision income relative to risk-weighted assets."
Moody's has a long history on making stupid decisions. The recent downgrade is no exception. Imo, the rationale used to justify their downgrade in reality supports an upgrade. Here's Moody's logic:
First, the bank has drastically reduced its low margin (350 bsp) adc and commercial construction portfolio. Down almost 2/3 from the peak. The charge-offs have been out of sight. The bank is almost at the bottom of the barrel and in 2011 there will be a sharp reduction in the banks charge-offs.
Second, the bank has been growing its high margin business - specialized lending 1144 bsp, auto sales 600 bsp, and commerical and industrial porfolios 400 bsp. Loan losses on auto loans this year have averaged around 40 bsp.
Third, the bank has aggressively pursued new accounts and has significantly increased low interest checking and saving accounts. Principal reason why margins have expanded to around 400 bsp.