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5 Bank Stocks Bernanke Can't Hurt Anymore

5. BB&T
Shares of BB&T Corp. (BBT) of Winston-Salem, N.C., closed at $33.57 Monday, returning 36% year-to-date, following a 2% decline during 2011.

The shares trade for 2.2 times tangible book value, according to Thomson Reuters Bank Insight, and for 11 times the consensus 2013 earnings estimate of $3.04 a share, among analysts polled by Thomson Reuters. The consensus 2012 EPS estimate is $2.76.

Based on a quarterly payout of 20 cents, the shares have a dividend yield of 2.38%.

BB&T reported second-quarter net income available to common shareholders of $510 million, or 72 cents a share, improving from $431 million, or 61 cents a share, in the first quarter, and $307 million, or 44 cents a share, during the second quarter of 2011.

The company's second-quarter ROA was 1.22%, improving from 1.03% the previous quarter, and 0.83% a year earlier. The second-quarter return on average common equity was 11.21%, increasing from 9.75% in the first quarter, and 7.25% in the second quarter of 2011.

BB&T's net interest margin was 3.95 during the second quarter, increasing from 3.93% the previous quarter, and 4.15% a year earlier.

During the third quarter, BB&T took some obvious steps in light of regulatory changes, that will help defend the net interest margin. The company on July 18 redeemed $2.475 billion in trust preferred and other capital securities, of which $1.525 billion had fixed coupons of 6.75% or higher. $350 million in enhanced trust securities had a coupon of 8.10% and $575 million paid 9.60%. The company then on July 25 issued $1 billion in noncumulative preferred shares, with a coupon of 5.625%. The move was done in part because under the Federal Reserve's rules proposed in June to implement the Basel III capital requirements, most trust preferred equity will be excluded from regulatory Tier 1 capital.

Mosby estimates that BB&T's net interest margin will contract by another 10 basis points from the second quarter of 2012 through the end of 2013.

The analyst has a neutral rating on BB&T, and on Monday raised his price target for the shares to $35 from $32, saying he expected the company "to earn around 17% on tangible common equity in 2013 with a cost of equity around 11%," and that "BBT's strong capital position and management approach should allow the bank to increase dividends, capture market share, and take advantage of opportunistic acquisitions."

"As a result of continued growth in earnings and dividends, we think BBT represents a good long-term investment that is currently fairly priced," he said.

BBT Chart BBT data by YCharts

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

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