Stock Wrap: The Real Story, June 9: Stocks in New York were slightly higher in the final hour of trading, with the Dow flirting with positive territory for the year, as oil climbed to $70 a barrel and investors mulled news that some banks are cleared to return taxpayer aid.
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BB&T (BBT) was another winner after shares were upgraded at Keefe Bruyette & Woods to market perform from underperform after the bank's capital raise and dividend cut. Read more here.

Second on the list was BB&T (BBT), a bank that raised capital even when it didn't need to, and is now ready for serious acquisitions of smaller, failed banks.

Anxious to pay back uncle sam the $3.1 billion it got under the Troubled Asset Relief Program, BB&T last Monday slashed its dividend by 68%. That broke a 37-year string of consecutive payout enrichments. BB&T (BBT) is one of nine big banks to pass the Treasury's stress test and therefore was deemed not to need more capital (10 other big banks must raise a combined $75 billion). Wednesday, it applied to get out of TARP. BB&T, North Carolina's No. 1 bank, based on deposits, will pay a quarterly common disbursement of 15 cents a share, down from 47 cents. In addition, it has launched a $1.5 billion stock offering; a handful of other large lenders have also made offerings to help them exit TARP. "We have a long and proud history of paying dividends [since 1903] and understand how important the dividend is to our shareholders," declared CEO Kelly S. King. He added that the decision marked "the worst day in my 37-year career." But King said "we firmly believe this action is in the long-term best interests of our shareholders and our company because of the risk and uncertainty associated with being a TARP participant." He also said that while BB&T's current earnings are superior to its peers', they probably don't justify a 47-cent dividend in the near term. When market conditions and BB&T's earnings improve, however, the bank is "committed" to enhancing payouts accordingly. King said the bank, which has $143.4 billion in assets, doesn't need the approximately $725 million in annual savings from the dividend cut to repay its TARP indebtedness but took the action to bolster its finances. Besides the $1.5 billion from the stock offering, it raised $796 million via the sale of senior debt notes due in 2014 and 2019. The remainder will come from cash on hand. COO Christopher L. Henson said that with fresh capital in place and even after the TARP repayment, BB&T would end up with a Tier 1 common capital ratio "north of 8%," double the minimum requirement set by the government's stress test. The new quarterly is payable Aug. 3 to holders of record July 10. The stock goes ex-dividend July 8. Yield: 2.79%. BB&T shares, which trade on the Big Board, have been in the low 20s, on anticipation of a dividend cut, plus concern about its commercial real-estate portfolio. The stock's 52-week range is 45.31 to 12.90.

I am agnostic right here. We are still overbought, we have some gloom, but not enough to kill the secondary supply movement, and we all can read the list of TARP takers and know that there are more ahead. So why not be just negative? Because of the propensity to miss the BB&T (BBT) and to miss the opening in a PNC (PNC), and because the tech article in today's Journal -- positive!

BB&T Corp. (BBT) is a conservative bank that stumbled right at the end, right at the top, moving out of traditional markets to ones that turned down fast. But it didn't destroy its franchise, and I think that low $20s is a win.

"If Wells Fargo went up 6, isn't it reasonable to presume that Bank of New York Mellon (BK), KeyCorp (KEY), Capital One (COF), BB&T (BBT) and no doubt all of the others, would do the same?" ("A Bevy of Bank Offerings," 5-12-09)

finance

For Peltier's take, click here.

Growth

commercial real estate

where are the write downs?

Boring