I expect bbt to increase their dividend in the 2nd qtr. 2012. The stress test results will be announced in March. I think bbt has 1 more qtr. of very high credit costs and in 2012 we're going to see a major reduction.
Suggest you read Kelly King 12/6/11 presentation made at goldman sachs financial conference. Found on bbt website. Nice presentation. Note the positives: loan growth for the 4th qtr net of runoff in the 5 to 6% range (annualized); deposits growth continues to be strong, credit continues to improve, bbx acquisition is accretive. Also, note $700 million reduction in credit costs - after tax that's worth $.19 per qtr.
I look for bbt to earn in 2012 15% return on their book value ($3.50 to $4 per share). Major drivers are 80 bsp provision, $700 million reduction in credit costs and solid loan growth.
On the subject of the dividend I think once bbt retires the $3.2 billion of trups in 2013, I think we'll see a higher payout ratio than 30%.
My opinion - do you own due diligence.
I get the feeling that things are starting to break BBT's way - management and potential of recent acquisitions, deposit growth, good conservative management thru prolonged downturn, etc. However, the macro economic factors still heavily influence how BBT's share price will move, but otherwise BBT is getting some good remarks recently in the business media.
I am not a critic of just this bank, I am critical of all corporations where upper mgt receives outrageous salary and benefits.
Many try to make the argument that it is justified to pay our upper mgt/board outrageous benefits because other corps pay theirs these benefits.
As Mr. Spock would say, "This is illogical".
Norm, I too want to thank you for your very informative post about BB&T. I have been a stock holder of BB&T for over thirty years. Your post normally are very close to 100% on the money. Since I do not understand the stock market and am to old now to learn I trust your thoughts. Have a MERRY CHRISTMAS!
As Ronald Reagan said..."Well, there you go again!".
Norm, you are a gem, I must give you that. You make this Board entertaining at least.
you do know that restricted stock granted to Mgmt is usually unduly large, so optically, the grantor (meaning the BofD) can say it is really not liquid compensation like cash, but "restricted" compensation. What all restricted stock grants have is a change of control vesting mechanism (actually there a lot of vesting mechanisms), which is the ultimate liquidity event for grant recipients. In some cases, crafty stock grants are pegged to a dolar value at time of issuance, so if the stock is at $10 on the date of the grant, but the company sells for $5, the recipient gets an equivalent $10 value, meaning even more shares (sort of like an expanding parachute). I dont know if King's grants are stucutred like this, probably not.
But the point is, the grants are real, and there is always a liquidity event. It is a lot of money, that is why the SEC requires it to be included in the proxy. He makes $10M.