Why doesn't BBK augment their deposit gathering
efforts by getting aggressive in an internet bank. They
can pay higher rates and draw significant deposits.
Look at NTBK and the other internet banks. The
internet banks are having trouble making enough loans to
sustain profitability. BBK could generate the deposits
online and make the loans through their branch
Thanks Doc - I knew you'd say that! And you're
right, more branches usually do equal better service.
The problem facing BBK and some others is how many do
you really need to give better service? If your
overhead structure is such that you can't be competitive
in pricing loans, then you have a big problem. If
you meet competition on loan pricing, and you want to
survive with excellent EPS, etc., you must save $
somewhere else. Where do you think they should get the
additional savings? That's not a trick question, it's the
reality that BBK and others like them have to face. Stop
Y2K programing? No - can't do that! Cut back on
advertising? Maybe, but what about those new markets who think
BB&T means ......? I know, cut back on credit people!
Yea, BBK's number are great! That's a great idea isn't
See what I mean? I'm sure I don't have the best
answer, but I still think they have too many branches for
their market share. If you got a better answer, I'm all
ears, but I really don't think they can continue to do
nothing. Watch 3rd quarter operating ratio for key. If no
lasting improvement (which has been slowing, but still
there), they have hit the wall. Low loan loss alocations
can not save the day for ever (take a look) and the
clock towards a tough economy is ticking.
still long BBK, but I'm still here for the takeover. If
they can move quickly on expenses, I'll stick, because
at that point they really will have become the mgt.
that Doc JJ seems to think they are! Let's keep our
is an ongoing debate throughout all of banking.
While its true and proven that we are all going to our
banks less and less, most people will initially make
their very first bank selection based upon location of
a branch (close to home, school, work, or on the
way to any of the above).
rub...need a good location to rope them in, need adequate
service and facilites (i.e. branches, ATM, net) to keep
I don't buy the theory that our children will never
set foot in a bank, but I know for a fact that they
will go to the bank less than we do (in case your
wondering, my child is the most beautiful 15 month old girl
in the whole wide world!)
I think for BBK to
expand into new markets, they will need the bricks and
mortar, once they are established, they can trim
FYI, for another interesting regional bank play, look
at Popular (BPOP)...despite PR's terrible economy,
they have put together some decent numbers and are
really expanding down here. They already have the
largest share of deposits in the USVI.
Does BBK need all those branches?
The answer is an unequivacble (i wish I could spell),
One of the biggest problems with acqusitions is that
they always closed down some branches (if the new bank
is in the area already). And you wanna hear whats
funny? According to all my friends, it always THERE
branch thgat closes! And then they have to start going
to another bank that s miles away, and its more of
an inconveniance. In truth, BBT did that in hampton
roads in Virginia and its hard for folks to get used to
a new branch.
Small town banks succeed
because they are close by, friendly, and they provide
personal service to their customers. Thats why they are
cropping up all over again.
Enter BBK (no I don''t
work for them). Maybe other banks can close down
branches improving all those funny ratios you guys post on
this board, but BBT serves its customers with friendly
people, in convenient locations, with local management.
In time, they will get a heavier reward.
kills me. FUNB has a phone in its branches to dial
charlotte for loan assistance. What a crock. My BBT banker
can approve a loan in front of me!!!!!
am now taking off my rose colored glasses. Its just
a good bank.
I think we're all in agreement about the
risk/reward vs. pricing and terms issues. I guess we'll see
how it all works out.
My point about an uptick
in interest rates being a sell indicator is based on
my belief that this is a precurser for inflation and
Fed. tightening. I agree that higher rates would be
better for banks in general, if that means spreads are
improving AND the Fed is staying out of the market. My
concern is that inflation signs will return and the Fed
will go nuts. They have shown great restraint over the
last decade - really quite good performance compared
to the 70's and some of the 80's - so I guess I
don't expect them to over react, but I still remember
the 70's & 80's.
I wish I had Yankee's
confidence in BBK as a "wise" player. WB has long been able
to price loans cheap because fees drove their
marginal profits so well. NB and FTU were also strong. STI
? I'm not so sure but all that Coke stock can't
hurt. Where does that leave BBK? Playing catch-up, I
think. They now have over 500 branches. Do they need
that many? FTU and NB are closing branches left and
right (I know Doc JJ - BBK gives better service with
all those branches) and I think BBK must look harder
at expenses if they are to continue to meet
projected earnings. I think they are increasing
securitization, but they don't have the machine like a WB, FTU,
or NB. What does all this mean? I'm not sure, but I
think it means that the size banks "on the bubble"
could also include a BBK, ASO, etc.
enjoyed everybody's posts the last few days and learned
stuff. Thanks and keep it up!
While it is well established that regulators
don't know their you know what from their elbow, they
are picking up on the fact that margins are thin and
risks are growing long. A number of banks are trying to
implement profitability models to help them determine which
credits are worth more over the life of the loan. Once
they're identified, a bank can price these loans more
competitively so they can hold them in their portfolio. What
happens, however, is some banks without a great deal of
expertise, are trying to price these loans so competitively
that they are overexposed to credit and interest rate
risk. These are the banks that the Fed and everyone
else are screaming about. The thin pricing is very
real and stems from the 'BigBoys' access to amssive
amounts of cheap funds. On the credit side, however,
these banks are still able to meet their margin and
maintain their risk exposure. The smaller banks, those
local yocal and almost-regional banks are trying to be
so agressive to fend off the big boys that they are
in grave risk of collapsing in the next downturn or
interest rate hike. Banks like BBK, WB FTU, NB, STI,etc.
will come out fine. Your First Citizens, Triangle's
and other "on the bubble" banks have been pricing
thinner and taking more risk...a deadly combination.
Anyone remember banking in New England in the early
nineties? I do, it wasn't pretty! It will repeat itself if
this keeps up!
I understand some of your concerns regarding
interest rates and bank performance, however, the two
aren't always directly linked, and may be so in an
inverse way if they are.
Most banks would actually
benefit from a steep increase in long term rates giving
us a stiff yield curve. Most banks can reprice their
loans within 12 months, deposits may need to be done
sooner, but not as high. Other costs remain somewhat
As a banker, I would prefer higher longer term rates
instead of the current climate.
There is also a
growing contency made up be some people whom I respect
that feel rates might even drop from here...imagine
If you like banks as investments, I encourage you to
all take a look at Fannie Mae, FNM,.....a first class
operation in every sense and a worthy investment.
I am concerned about my BB&T stock (bank shares)
BB&T Growth and Income Fund. Should we
sell? The Growth
and Income has really gone down. I
am thinking about transfering
the remaining money
from the Growth and Income to Bank shares
are not stable either. I am a novice investor
I need some advice from some seasoned investors.
Your worries over BB&T shouldn't be any greater
than the market in general. Everything is off! it's
only a matter of time until all the "profit takers"
need something to reinvest in. Market will be up in
Oct., only to have another sell off after Thanksgiving
(Wall Street has developed a habit of swinging the
market to make their own firm's returns better). It's
tough being the little guy! Also, banks got hammered
(just ask JP Morgan) over the asia situation. It's only
a matter of time before investors realize BBK has
absoutly no interest tied to the asian economy, directly
or indirectly. It'll still outperform the industry.
Sure you may feel like your losing money and you
may, this year. However, if you hold on for the long
haul it will pay off. BB&T is a great stock, but the
BB&T Gowth and Income Fund isn't so great. I would
suggest asking your portfolio manager or doing as most of
us do, read, read, read. Look at these funds
carefully and make sure that they have good long term
profits. (5,10, 15, 20 year returns)
Riggs doesn't have many branches and most of them
are located in DC. There are only a hand full of
Riggs branches outside of DC. Riggs will not sell. The
largest stockholder in Riggs has made it clear that he
will not sell his shares. This person is also on the
board. He owns almost 50 % of the stock. I'm not sure of
his name. The Washington Post had an article on Riggs
about 6 months ago. FVB and PBKS would be with out a
doubt the best purchases for BBK. There wouldn't be
much overlap in these 2 banks. FVB is strong in VA and
most of Marlyand. It has a small presence in
Tennessee. Where FVB lacts exposure is in the Baltimore
region of Maryland, coincidentally this is where pbks
would fill that gap nicely. Mercantile is also based in
Baltimore and is a better and much bigger bank than PBKS,
but there would be several overlapping branches with
FVB. Mercantile is about 7.5 billion. If BBK wants to
get into VA, FVB is the only big bank left in VA.
It's assets are 9.3 billion. The next largest bank is
around the 2 billion range. Mercantile is the biggest
bank in Maryland.