) announced its plans of expanding in Texas by focusing entirely
on developing small and commercial business lending operations in
the region. The company plans to open nearly 30 new branches,
mostly through 2013, in the key cities of the state, subject to
BB&T CORP (BBT): Free Stock Analysis
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In 2009, BB&T entered the Texas banking region by acquiring
Colonial Bank along with 22 of its branches. In a span of three
years, the company witnessed widespread growth in the region.
Presently, it has 27 branches in the state (more two to open this
month) along with $1.3 billion in deposits and $1.65 billion in
loans. In addition, the company has nearly 1,200 strong workforce
in the region.
BB&T anticipates opening nearly 11 branches in each Dallas/
Forth Worth and Houston, whereas it plans to open four in each
Austin and San Antonio. This will result in investments exceeding
$40 million and will create approximately 150 jobs in these
cities. Instead of new constructions for setting up these
branches, the company is looking for vacated properties such as
former bank branches and office locations.
Apart from banking branches, BB&T's auto-loan subsidiary -
Regional Acceptance Corporation - operates a major call center in
Arlington and has offices in Plano, Houston and San Antonio.
Similarly, the company's wholesale and specialty insurance
division manages eight offices in the state.
McGriff, Seibels & Williams, Inc - one of BB&T's
insurance subsidiaries - BB&T Capital Markets division as
well as BB&T Corporate Banking and Investments division have
offices located in Houston. BB&T Wealth Management division
has an office in Dallas. Also, BB&T's wholly-owned
subsidiary, Grandbridge Real Estate Capital LLC, has presence in
the state with offices situated in both Dallas and Houston.
Earlier in July this year, BB&T expanded its footprint in the
coveted region of Florida with the acquisition of 78 branches of
BankAtlantic - the wholly-owned subsidiary of
BankAtlantic Bancorp, Inc
). The deal was announced in November 2011, but unexpected
contingencies delayed it.
BB&T's expansion strategy is going to push its expenses to
the north. As of September 30, 2012, BB&T's operating
expenses stood at $4.3 billion, rising nearly 3.7% over the same
period in 2011. However, it must be noted that though expenses
will rise, top line would be positively impacted by the growth
initiatives going forward. Further, loans and deposit balances
will witness substantial improvements. All these should boost
overall development at BB&T.
BB&T currently retains a Zacks #3 Rank, which translates into
a short-term Hold rating. Considering the fundamentals, we also
maintain a long-term Neutral recommendation on the shares.