BB&TShares 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.
"We expect the pressure on the core NIM to continue given today's low rate environment; as such, we believe that it will be difficult for BB&T to continue to grow earnings outside of acquisitions, and with a premium valuation relative to peers, shares will likely remain range-bound in the near term until a more apparent catalyst for growth is visible." Miller estimates the company will earn $2.44 a share for all of 2013, with EPS rising to $3.05 a share in 2014. BBT data by YCharts
Interested in more on BB&T? See TheStreet Ratings' report card for this stock. -- Written by Philip van Doorn in Jupiter, Fla. >Contact by Email. Follow @PhilipvanDoorn