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

7 Bank Stocks Loved by Deutsche Bank (Update 3)

Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player

Shares of BB&T Corp. (BBT - Get Report) of Winston-Salem, N.C., closed at $29.65 Wednesday, returning 19% year-to-date. Based on a quarterly payout of 16 cents, the shares have a dividend yield of 2.16%.

The company on Friday agreed to purchase the life and P&C insurance operating divisions of Roseland, N.J.-based Crump Group from J.C. Flowers for $570 million in cash, saying the deal would "add approximately $300 million in annual revenue."

BB&T also has a deal in place to purchase BankAtlantic Bancorp's (BBX) main thrift subsidiary for a premium of $301 million to pick up 3.3 billion in deposits, spread across 78 South Florida branches.

O'Connor's price target for BB&T is $30.00.

Among the positives he sees for BB&T, O'Connor growing its commercial and industrial loans, along with "niche areas within its specialized lending segment," while also "growing small ticket consumer, prime auto, and commercial leasing which are smaller in size, but provide more granularity/geographic diversification to its portfolio." Even without the Crump insurance business, BB&T derived "$1b or 31% of core noninterest income in 2011" from its insurance business.

O'Connor also expects BB&T's credit expenses to continue to decline, estimating 2012 earnings of $2.49 a share in 2012, followed by EPS of $2.78 in 2013.

On the negative side, risks for BB&T investors include continued pressure on the company's net interest margin, as the company "continues to run off higher-yielding Colonial assets," acquired when BB&T bought the failed Colonial Bank of Montgomery, Ala., from the Federal Deposit Insurance Corp. in September 2009.

O'Connor also thinks there "may be little upside" to BB&T's dividend this year, because of the company's preference to deploy capital through "organic growth."

Interested in more on BB&T? See TheStreet Ratings' report card for this stock.

2 of 8

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
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
C $52.90 0.00%
BAC $15.64 0.00%
BBT $37.78 0.00%
KEY $14.23 0.00%
JPM $62.60 0.00%

Markets

DOW 18,080.14 +21.45 0.12%
S&P 500 2,117.69 +4.76 0.23%
NASDAQ 5,092.0850 +36.0220 0.71%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs