Federal Reserve Approves BB&T's Revised Capital Plan

NEW YORK ( TheStreet) -- The Federal Reserve on Friday announced it had approved BB&T's ( BBT) revised capital plan, covering capital deployments through the first quarter of 2014.

The Winston-Salem, N.C. lender's initial 2013 capital plan was rejected by the Fed in March, "based on a qualitative assessment," making it the only one of 17 publicly traded large U.S. banks to have its plan rejected outright. JPMorgan Chase ( JPM) and Goldman Sachs ( GS) received "conditional" approval for their capital plans, which for JPMorgan included approval of up to $6 billion in common stock buybacks through the first quarter of 2014.

All three companies submitted revised capital plans to the regulator.

The Fed on Friday said it had "not objected to a re-submitted capital plan from BB&T Corporation," and provided no further detail.

BB&T's shares closed at $35.91 Thursday. Based on the current quarterly payout of 23 cents, the shares have a dividend yield of 2.60%. The dividend was raised during the first quarter, from 20 cents.

BB&T in a statement said the revised capital plan didn't include buybacks or a dividend raise.

"We are pleased to have one of the highest dividend payout percentages and dividend yields of any of the top financial institutions in the country," said BB&T CEO Kelly King. "In light of several factors, we approached the resubmission conservatively and did not request a further increase in capital deployment at this time."

Oppenheimer analyst Terry McEvoy has a neutral rating on BB&T, estimating the company will earn $2.48 a share this year, with earnings rising to $3.05 a share in 2014. The analyst in a note on Thursday anticipated the Fed's announcement, writing "positive news could benefit the company's shares over the near-term and we note the stock's underperformance relative to peers year-to-date."

BB&T's shares were up 27% year-to-date through Thursday's close, which trailed the performance of many regional and money center banks, but matched the performance of the KBW Bank Index ( I:BKX).

Following the announcement, BB&T's shares were down 0.6% to $35.69 in early afternoon trading, while the KBW Bank Index was also down 0.6%, as banks showed weakness following a sharp decline in new home sales reported by the Census Bureau.

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

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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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