BB&T's third-quarter net interest income was a tax-adjusted $1.52 billion, increasing slightly from the previous quarter, and from $$1.45 billion a year earlier. The company's net interest margin net interest margin (NIM) -- the difference between the average yield on loans and investments and the average cost for deposits and borrowings -- was 3.94%, declining from from 3.95% in the second quarter, and 4.09% during the third quarter of 2011.
Most banks are facing pressure on their net interest margins, with the Federal Reserve keeping its target federal funds rate in a range of zero to 0.25% since the end of 2008, while the central bank in September significantly increased its purchases of long-term mortgage-backed securities, in an effort to keep long-term rates at historically low levels.
While BB&T's third-quarter margin held up nicely, what probably caused the most alarm for investors was the company's guidance, that the margin would fall "to the mid-70s% range in 4Q12," because of lower rates being earned on new assets, higher long-term debit cost, and the runoff of assets covered by Federal Deposit Insurance Corp. loss-share agreements.
BB&T's shares have now returned 22% year-to-date, following a 2% decline during 2011.The shares trade for 1.8 times their reported Sept. 30 tangible book value of $17.02, and for 10 times the consensus 2013 EPS estimate of $3.05. Based on a quarterly payout of 20 cents, the shares have a dividend yield of 2.67%. C data by YCharts
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