On May 24, 2013, we reiterated our long-term recommendation on
) at Neutral based on its steady progress on both the organic and
inorganic front. However, we remain concerned about the mounting
operating expenses along with the company's wide exposure to
Why the Neutral Stance?
BB&T's first-quarter 2013 earnings came in at $0.69 per
share, marginally surpassing the Zacks Consensus Estimate of
$0.67. Results were primarily driven by top-line growth and lower
provision for credit losses. Moreover, overall credit quality and
capital ratios exhibited improvement.
The Zacks Consensus Estimate for 2013 fell by a penny to $2.87
per share over the last 30 days. For 2014, the Zacks Consensus
Estimate also went down by a penny to $3.08 per share over the
same time frame. Hence, the company currently has a Zacks Rank #3
BB&T has been actively engaged in making acquisitions over
the past few years. This is expected to enhance the company's
banking network, improve its top line and the client delivery
Moreover, BB&T is well poised from the capital perspective as
a result of its earnings power. The company's capital ratio
remains well above the regulatory requirement.
However, despite clearing the 2013 Stress test, the Federal
Reserve rejected BB&T's capital plan. Although the company
received permission to resubmit its capital plan, the initial
rejection might act as a setback. Alongside, BB&T's
profitability is expected to be adversely affected by various
financial reform laws due to increased costs and fee
Further, BB&T is significantly exposed to risks and
uncertainties related to its acquisitions. This could adversely
affect the operations or results of the company since it diverts
management's attention and resources.
Other Banks to
Some better performing banks include
Enterprise Financial Services Corp
Old Second Bancorp Inc
First Interstate Bancsystem Inc
). All these carry a Zacks Rank #1 (Strong Buy).
BB&T CORP (BBT): Free Stock Analysis
ENTERPRISE FINL (EFSC): Free Stock Analysis
FIRST INTST MT (FIBK): Free Stock Analysis
OLD SECOND BCP (OSBC): Free Stock Analysis
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