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BB&T: Financial Winner

Stocks in this article: BBT I:BKX

NEW YORK ( TheStreet) -- BB&T (BBT) was the winner on Thursday among the largest U.S. banks, with shares rising 1.4% to close at $30.63.

The Dow Jones Industrial Average and S&P 500 (SPX.X) indices ended slightly higher, while the Nasdaq Composite ended with a 1% gain.

The Department of Labor reported initial unemployment claims for the week ended April 20 fell by 16,000 to 339,000, and that the four-week average for jobless claims declined by 4,500 to 357,000. Continuing unemployment insurance claims declined by 93,000 to 3 million. Economists polled by Thomson Reuters had expected new claims to come in at 351,000, with continuing claims of 3.06 million.

The KBW Bank Index (I:BKX) rose 0.5% to close at 56.73, with all but four of the 24 index components ending the session with gains.


Shares of BB&T of Winston-Salem, N.C., have returned 7% this year, following a 19% return during 2012. The shares trade for 1.7 times their reported March 31 tangible book value of $17.56, and for 9.9 times the consensus 2014 earnings estimate of $3.10 a share, among analysts polled by Thomson Reuters. The consensus 2013 EPS estimate is $2.89.

Based on a quarterly payout of 23 cents, the shares have a dividend yield of 3.00%.

BB&T on Thursday issued $450 million in noncumulative preferred stock, with a coupon of 5.20%. The depositary shares have a par value of $25, and each represent 1/1000th of the company's Series G preferred shares, with a par value of $25,000.

BB&T on April 18 reported first-quarter net income available to common shareholders of $210 million, or 29 cents a share, declining from $531 million, or 71 cents a share, in the fourth quarter, and $431 million, or 61 cents a share, in the first quarter of 2012.

The first-quarter results were lowered by a previously announced $281 million adjustment "recorded in connection with an unresolved disputed tax liability." The adjustment lopped off 40 cents a share in earnings, after tax.

BB&T's tax adjusted first-quarter net interest income was $1.459 million, declining from $1.513 million in the fourth quarter, and $1.472 million in the first quarter of 2012. The sequential decline was "primarily due to covered loan run-off," according to the company. The net interest margin (NIM) -- the spread between the average yield on loans and investments and the average cost for deposits and borrowings -- narrowed to a tax-adjusted 3.76% in the first quarter, from 3.84% the previous quarter, and 3.93% a year earlier.

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