Fox-Pitt Kelton Raises Estimates For BB&T

CHARLOTTE, N.C. (AP) — A Fox-Pitt Kelton analyst raised his earnings estimates on BB&T Corp., saying the bank operator should benefit from its recent acquisition of Colonial BancGroup Inc.

Analyst Albert Savastano wrote in a research note that Winston-Salem, N.C.-based BB&T built up its operations through acquiring community banks, and the Colonial deal provides further penetration into Florida and Alabama, as well as entry into Texas.

"We expect earnings will benefit for the longer-term as BB&T engages in more cross-sell of products with Colonial's branches," Savastano wrote.

Last week, the Federal Deposit Insurance Corp. shut down Colonial BancGroup, a real estate lender based in Montgomery, Ala., and approved the sale of $20 billion in deposits and $22 billion in assets to BB&T. Colonial is the largest of the 77 banks that have failed so far this year.

BB&T operates throughout the Southeast and is considered among the nation's stronger regional banks. BB&T said the deal, the biggest acquisition in its history, creates the nation's eighth-largest financial holding company by deposits.

On Monday, BB&T said it would sell $750 million in stock, and use the proceeds for general corporate purposes.

Savastano raised his 2009 earnings estimates for the bank to $1.02 per share from 93 cents per share, to account for the Colonial deal and capital raise. Analysts surveyed by Thomson Reuters expect 2009 earnings of $1.18 per share.

Shares of BB&T rose $1.38, or 5.3 percent, to $27.81 in afternoon trading.