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9 Critical Numbers About BB&T

By John Maxfield - Apr 2, 2013 at 12:24PM

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If you own or are thinking about buying shares of BB&T Bank, then at the very least you should know these nine critical numbers.

Given that you clicked on this article, it seems safe to assume you either own shares of BB&T Bank (TFC 1.49%) or are considering buying them in the near future. If so, you've come to the right place, as the table below reveals the nine most critical numbers that investors need to know about BB&T before deciding whether to buy, sell, or hold its stock.

But before getting to that, a brief introduction is in order. Tracing its roots back to 1872, BB&T has since transformed into one of the nation's largest regional banks. Based in Winston-Salem, North Carolina, it operates approximately 1,800 branches across 12 states and the District of Columbia. In addition, as of the end of 2012, it had $184 billion in assets on its balance sheet. As the bank notes on its website: "A Fortune 500 company, BB&T is consistently recognized for outstanding client satisfaction by J.D. Power and Associates, the U.S. Small Business Administration, Greenwich Associates and others."

As you can see in the table above, from a shareholder's perspective, BB&T exhibits a number of strengths. It's better at managing interest rate risk, as evidenced by its above average net interest margin. Its comparatively low non-performing loans ratio suggests it's similarly superior in terms of minimizing credit risk. And the bank's healthy fee-based income goes a long way toward hedging against low interest rate environments like the present. It's largely for these reasons, in turn, that BB&T's return on equity is roughly 230 basis points better than the average. And it's also for these reasons that the bank's shares trade for a dear 1.9 times tangible book value.

Alternatively, if one had to be picky, BB&T's biggest weakness is its relatively low payout ratio. As a general rule, I prefer banks that pay out no less than a third of their net income to shareholders via dividends. While BB&T comes in just below this benchmark, what's not captured here is the fact that the bank increased its quarterly distribution by 15% at the beginning of this year. Once that's factored in, it seems safe to say that the bank will more than satisfy this requirement, too.

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