Is BB&T's Stock a Big Opportunity for Investors?

In the wake of the financial crisis, there are a lot of banks trying to put a feel-good spin on their business. For Winston-Salem, North Carolina's BB&T  (NYSE: BBT  ) though, "feel good" is business as usual.

That may sound touchy-feely, but it may also be good business and good for investors. In the wake of a banking meltdown which was predicated -- at least in part -- by banks ignoring what it meant to successfully conduct traditional banking, BB&T's long-held commitment to doing just that may be a winning formula for investors.

The big opportunity
Although its size may align it with the "too big to fail" banks, BB&T likes to hold itself out as the prototypical community bank. It goes as far as to start its mission statement with the words, "To make the world a better place to live." The statement goes on to pledge allegiance to customers, employees, communities, and shareholders.

That type of idealistic language isn't surprising to hear from a bank. Even the most notoriously flawed bankers out there claim to be Jimmy Stewart in It's a Wonderful Life. What is surprising is that BB&T appears to live up to its ideals.

In BB&T, we see a long-term focused, win-win culture that's far from Wall Street's face-ripping culture. In fact, it borders on the conscious capitalism espoused by Whole Foods (NASDAQ: WFM  ) and others.

As an example of its dedication to its customers and community, BB&T folks like to dig back in the bank's 140-year history and tell tales from the Great Depression. As panicked runs were taking place, BB&T boasts of never refusing a withdrawal and never failing to pay a dividend on its stock. It's accompanied by the story of a Brinks truck rolling up with a million of BB&T's dollars as a show of strength. The result was a run... of customers depositing more cash.

Supplement those historical stories with BB&T's numerous quality and service awards, its employee volunteer program, and its decentralized, community-oriented structure, and the narrative gets richer.

On the employee side, BB&T's conservatism allowed it to avoid large layoffs or benefit cuts during our recent financial crisis. Raises were continued, and benefits were maintained.

Since nearly half of BB&T's shareholders are individuals (as opposed to institutions), many of these customers, community members, and employees have more than deposits and jobs at stake. What we see on the shareholder side is consistency and conservatism. The financial crisis wasn't a parade for any bank, but BB&T fared better than most. It never came close to losing money on a quarterly basis, generating $150 million in profit at its worst. Its non-performing loan rate peaked at 2.6% of loans (a rate many banks are still north of). Its dividend, while cut significantly, stayed material. And it's managed to grow assets smartly by about 50% versus 2006. For this stable history, BB&T traditionally trades at a well-deserved premium to its peers.

Critics could say BB&T is just doing its job as a bank, but that's notable given the goings-on at its larger competitors.

The above is a preview of The Motley Fool's new premium research report on BB&T. Does the opportunity available for those in the business of good, old-fashioned banking make BB&T a buy today? In the full report we explore the biggest risks the bank faces and offer three reasons why the stock is a buy right now. Click here now for instant access.


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