This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Is It Safe? BB&T Doesn't Get Its Due

"Is It Safe?" is a feature by TheStreet.com Ratings that looks at a company's risk-and-reward potential. Find out if your stocks are safe Tuesday and Thursday mornings at 4.

BB&T Corp. (BBT - Get Report), one of 19 banks subjected to the Treasury's stress tests completed in May, is among the strongest of the large regional holding companies whose shares are set to soar when the economy rebounds.

Winston-Salem, N.C.-based BB&T, with $143 billion in total assets as of March 31, already repaid the Treasury its entire investment in preferred shares made under the Troubled Asset Relief Program, or TARP.

The other eight stress-tested companies that paid back the government include JPMorgan Chase (JPM - Get Report), Goldman Sachs (GS,), U.S. Bancorp (USB - Get Report), American Express (AXP - Get Report), Bank of New York Mellon (BK) and Capital One (COF).

BB&T on Friday will report earnings, which will reveal its capital ratios. The bank repaid $3.1 billion in TARP money and raised $1.7 billion in common equity in May. A charge of about $48 million related to the TARP repayment will torpedo profits.

As of March 31, BB&T's ratio of nonperforming assets to total assets was 2.12%, a significant increase from 1.55% the previous quarter, but lower than several other large holding companies. The annualized ratio of net charge-offs (actual loan losses) to average loans was 1.56% for the first quarter and 0.89% in 2008. The charge-off ratio for 2008 was particularly low when compared with other large regional holding companies subjected to the stress tests, such as Fifth Third Bancorp (FITB), which reported net charge-offs of 3.16% of average loans during 2008; Regions Financial (RF), with a net charge-off ratio of 1.58%; and even SunTrust (STI), at 1.2%.

BB&T's loan losses have been spread across its well-diversified portfolio. The company's earnings have held up over the past year, with returns on average assets ranging between 0.85% and 1.28%, and returns on average equity from 7.75% to 13.23%. That's impressive, considering the massive losses taken by so many large banks over the past year.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
AXP $76.06 0.00%
BAC $17.88 0.00%
BBT $40.27 0.00%
C $58.46 0.00%
GS $205.07 0.00%

Markets

Chart of I:DJI
DOW 17,689.86 -56.12 -0.32%
S&P 500 2,103.84 -4.79 -0.23%
NASDAQ 5,128.2810 -0.5040 -0.01%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs