Is Long-Term Loyalty in BB&T's Leaders Enough?

There's no denying the fact that a good management team can make or break a bank. In our special premium research reports on key banks in the industry, we look at management as a component of success or, in some cases, failure. This is an excerpt from our in-depth report on BB&T  (NYSE: BBT  ) .

When we look at upper management at BB&T, we see a group that is long on banking experience in general and long on experience at BB&T in specific.

Chairman and CEO Kelly King took over both roles from John Allison, who led BB&T for two decades before handing over the CEO role to King in 2009. Allison remains on the board.

It's not ideal to have the same person as both chairman and CEO. That said, the single chairman-CEO structure is nothing new for BB&T, and historical returns on equity speak well of management. Statements like this one from King show the kind of mentality management has: "Still, our [dividend] reduction to $0.15 per share in 2009 was my most painful decision as CEO because I know any reduction has financial consequences for individual shareholders who depend on our dividends."

Although King and much of the management team have only had their current roles since 2009, the amount of experience they have at BB&T is noteworthy. King has been at the company for four decades (since 1972). His COO has been with BB&T since 1985, the president of community banking since 1977, and the chief risk officer since 1982. CFO Daryl Bible is a relative newcomer with a 2008 start date. However, he was at kindred spirit US Bank  (NYSE: USB  ) for 24 years before that.

When a bank claims to be run for the long-term interests of its shareholders, it's reassuring to see that management has been in it for the long haul as well.

Dedicated leadership can go a long way, but when considering whether BB&T is a buy today, you’ll want to look at a lot more than just management. The Motley Fool’s new research report on BB&T helps you dig in further by offering a closer look at the risks facing the bank as well as clear reasons why now is a good time to buy. Click here now for instant access to that report.


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  • Report this Comment On December 14, 2012, at 12:05 PM, pl2358 wrote:

    Management experience is only one thing when looking at an investment, but for a bank, the experience that BBT's management has brings a couple of things to the table that most banks don't have:

    1. The senior members of management were in banking management in the early 1980s when the US was coming out of the economic funk that started in the mid 1960s. Other than interest rates being at the level they are today, that situation is eerily similar to where our economy is now, and this management team knows EXACTLY what to do to grow earnings in this situation.

    2. By being in BBT for a number of years, the company philosophy has been ingrained in their minds. They live it each day and also make sure that their subordinates live it and teach it to their subordinates. This makes BBT the community bank that they strive to be, even though they have a larger market cap.

    Other things need to be looked at, like earnings growth potential and how that is being managed, but having this strong of a management team is a necessity for a bank like this to succeed, and by living the bank's philosophy, the chances of the successors to these leaders being of the same mold is much greater.

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