My crystal ball was clouded up all afternoon. All I could distinguish was get activity was taking place. I was very disappointed that the price did not move up to the $30 range. With a volume 6 times the normal daily volume, and good news, the price should have approached $30/share. Maybe tomorrow.
look at the 10K, BB&T has been increasing reserves and non-performing coverage. What this means is; assets are increasing, some of the new partners may have a lower reserve % than BB&T, and we're deep into the business cycle. There are no early warning signals from BB&T. BB&T is increasing the provision taken fron quarterly earnings for potential future losses, Wachovia was lowering the provision to prop up earnings and the analysts recognized it.
(Yeah, I know - he finaly agreed with me for twice, but I still think his observation is valid.) An earlier poster made a good point as well - BBT seems to build in a healthy loan loss as part of the purchase price of the banks bought. I was told they can do this by having the purchased bank write off any poor performing loans before the merger. It makes the premium over book higher since the actual Net Worth of the bank being bought is lower, but they can take this as a charge to earnings over a long period of time instead of in one year. I'm told that most banks (or other companies I suppose) do the same thing or something similer. Apparently, Centura screwed up and didn't catch all the crap that Triangle apparently had on the books until after the merger and had to take the hit all this year.
Fan - have I got this right? Sounds logical to me and smart, but I suppose it does hurt future earnings to some extent. I think I also heard that the end of pooling may affect this technique going forward.
Course, Wachovia doesn't have this excuse - just made some dumb loans. My, how the mighty have fallen.
BTW, is BBT bigger than WB now??
BTW2 - trading in mortgage backed bonds appeared to fuel the volume, but I'll be darned if I understand why. Maybe somebody else can fill us in if that was the real reason.
Havn't heard from Doc JJ - I fear the worst. Doc - if you're out there - check in.