At 6/30/11 bbt had about $19 billion of investment securities available for sale. Vast majority was mbs gse stuff.
Prices on these securities increased significantly during the 3rd qtr of 2011 - probably 4% from beginning of qtr to the peak. The yield at the peak was less than 1% per year.
Bbt had no excuse for not selling the bulk of these securities during the qtr. and realizing huge gains for their shareholders who have suffered huge financial losses since 2008.. I guarantee you that the 3rd qtr 2011 provided bbt with maximum prices on these securities over the remainder of their respective maturities
Let's assume they sold $15 billion at average price increase of say 3% - $450 million pretax gain. After tax that would equate to a gain of $.50 per share. That's big.
If King took advantage of this, he's worth $10 million per year. He should of and history suggests he did. Last year bbt realized gains on securities of almost $700 million. If not, I will have difficulty understanding why the $19 billion were classified as securities available and the bank failed to take advantage of maximum price levels. That would be really stupid. We'll find our next week.
PS - This must be a comforting thought for bbt shorts. Huge investment gain, potential for significant reduction in the allowance for loan losses, growing loans, favorable loan mix of higher gross margin loans and booming deposits. Plus the economy is ok. Almost all the indicators show ok growth. Railroad ton-miles in last month have been trending up nicely from last year - as I recall the % change for the last 4 weeks was (.2), 1.7, 5.9, 3.9. Today retail sales for September were better than expectation.
What a lot of nothing...nobody buys a bank on whether it is managing a fixed income portfolio well or not. Let's see them lend the money out, then investors who invest in bank shares (not a bond portfolio) will determine if the resulting loan assets warrant a higher stock price or not.
You have way too much free time on your hands. I dont need BBT to be my bond fund manager, I can hire someone else to do that.
"What a lot of nothing...nobody buys a bank on whether it is managing a fixed income portfolio well or not. Let's see them lend the money out, then investors who invest in bank shares (not a bond portfolio) will determine if the resulting loan assets warrant a higher stock price or not. "
Just out of curiosity what do you do for a living?