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Citigroup: Bernanke's Money Printing Winner

BB&T's third-quarter 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 only one basis point from the previous quarter, but company estimated that the margin would narrow ""to the mid-3.70s% range in 4Q12."

O'Connor said that "earlier this month, BBT noted 4Q's NIM was coming in slightly better than expected--at around 3.80%. However, low rates and run off of purchase accounting accretion is likely to put additional pressure on NIM in 2013/beyond."

Today's announcement by the Fed won't do anything to ease BB&T's net interest margin pressure, but the continued monetary stimulus could help the company achieve its expected loan growth of 5% to 7% in 2013.

O'Connor estimates that BB&T will earn $2.90 a share in 2013. The analyst said that "it's tempting to get more positive" on the shares because of a valuation to forward earnings estimates that is only slightly above peers, with expectations for above average loan growth, "driven by good business/geographic mix and execution." On the other hand, his firm still sees "modest downside to 2013 consensus estimates (of 2-4%) and our 2014 estimate of $3.00 is 6% below consensus (with additional downside if interest rates don't rise)."

BBT Chart BBT data by YCharts

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

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-- Written by Philip van Doorn in Jupiter, Fla.

>Contact by Email.

Philip W. van Doorn is a member of TheStreet's banking and finance team, commenting on industry and regulatory trends. He previously served as the senior analyst for TheStreet.com Ratings, responsible for assigning financial strength ratings to banks and savings and loan institutions. Mr. van Doorn previously served as a loan operations officer at Riverside National Bank in Fort Pierce, Fla., and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a bachelor of science in business administration from Long Island University.
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