A paragraph Pinnacle doesn’t want associated with its earnings
Posted on October 19, 2009 at 1:47 pmSoutheast powerhouse BB&T today reported earnings that beat estimates, but Tiernan Ray at Barron’s says there are plenty of clouds still in the sky.
What’s troubling is that the company’s core business of writing new loans continues to slip even as its portfolio of existing loans deteriorates further. Fees on plain old deposits are just about the only thing to smile at, and even that is small comfort.
We’ll see tomorrow afternoon what comforts Pinnacle CEO Terry Turner has for his shareholders. Analysts expect the bank to post a loss of 9 cents per share.
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BB&T said to be Colonial buyer
Posted on August 14, 2009 at 1:47 pm
Bloomberg reports that Alabama’s floundering Colonial BancGroup is about to be snapped up by regional powerhouse BB&T (Ticker: BBT). With $26 billion in assets, Colonial’s expansion into Florida, Nevada and elsewhere may well turn out to be a case study in how banks got in over their heads during the housing boom.
Investors like the look of the deal, which — of course — comes with a loss-sharing guarantee from the FDIC.
BB&T may gain $830 million, or $1.28 per share, in the third quarter from the acquisition, analyst Chris Marinac of FIG Partners LLC in Atlanta said in a report today that assumes the FDIC will absorb 80 percent of Colonial’s loan losses. BB&T is likely to mark down Colonial’s loans by 12.5 percent to account for likely losses, Marinac said.
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More retail bank customers can’t get no satisfaction
Posted on May 19, 2009 at 3:38 pmThe latest study by J.D. Power on people’s happiness with their bank shows a not-surprising drop in comfort level due to the financial crisis. Barely a third of all respondents now say they are satisfied with their financial institution. Among banks active in the Nashville area, First Tennessee, First Citizens and BB&T lead the way.
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BB&T moves to pay back TARP
Posted on May 11, 2009 at 8:16 amThe Carolina-based bank, which is the Nashville area’s 13th-largest deposit-taker and the anchor tenant in The Gulch’s Terrazzo tower, will raise $1.5 billion and cut its dividend.
“We have a long and proud history of paying dividends and understand how important the dividend is to our shareholders, so this decision to temporarily reduce the dividend was extremely difficult for the board and, for me personally, it marks the worst day in my 37 year career.
However, we firmly believe this action is in the long-term best interests of our shareholders and our company because of the risk and uncertainty associated with being a TARP participant. In addition, our current earnings, while superior to our peers, are not likely to justify our $.47 dividend in the near term.”
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Dissecting the stress tests
Posted on May 7, 2009 at 10:14 pm
First, all the banks’ results neatly in a row. Among the banks with a notable presence in Nashville, only U.S. Bank and BB&T were deemed not to need new capital. BofA, Wells Fargo, Regions, SunTrust and Fifth Third must raise a combined $53 billion.
Then, from the AP comes a rundown of just how some of the affected players plan to raise the billions they need as well as word from those planning to repay TARP ASAP.
And via the Journal, a measured look at how the once-maligned concept of stress tests – Wells chief Dick Kovacevich not long ago called them ‘asinine’ – may actually come to be seen as the positive tipping point when we collectively caught our breath.
Investors fretted for weeks that the Treasury wanted to nationalize parts of the banking system, despite repeated efforts by Mr. Geithner and others to dispel that idea.
In retrospect, the tests were akin to hitting the pause button. The period allowed Mr. Geithner to buy time for the government’s evolving approach to the banking crisis, which had previously been ad hoc and heavily criticized.
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Local analyst: Banks’ book values have more to fall
Posted on April 16, 2009 at 1:21 pmNashville-based bank analyst Jeff Davis has begun covering most of the Southeast’s regional players with ‘hold’ ratings. His earnings estimates are generally below the investment community’s consensus numbers because he sees “migrating” credit issues. Those problems will eat at banks’ capital positions and push down book values until the end of 2010.
“Over the next few quarters, the industry should get closer to reality in that reserves will be much higher, more loans will have been written off and presumably the economy will be closer to basing, thereby creating a better risk-reward scenario for depository investors,” Davis wrote.
The government also will be in the banks’ corner to a certain extent, Davis said, though not necessarily on purpose. “Public policy for the large banks is such that these institutions are nearly too-big-to-fail… As a result, the government is unlikely to force draconian mark-to-distressed loan bids that create an immediate capital call if for no other reason than the government cannot seem to get organized to close small banks.”
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