BB&T Shares Fall as Fed Rejects Bank’s Capital Plan

<a href="news:linkid=MJO0E26TTDS9">BB&T Corp. (BBT)</a>, North Carolina’s second-biggest bank, slid as much as 3.3 percent in New York trading after the <a href="news:linkid=MJO9526KLVR6">Federal Reserve</a> objected to the company’s capital plan, blocking any rise in dividends or share buybacks.

The lender fell 2.8 percent to $30.84 at 9:43 a.m. today after the Winston-Salem-based company said in a <a href="news:linkid=MJO5G66KLVR6">statement</a> yesterday its quarterly <a href="news:linkid=MJO9526KLVR5">dividend</a> will remain at 23 cents. BB&T will resubmit its plan “as soon as feasible.”

“BB&T’s capital plan was objected to based on a qualitative assessment,” the Fed said yesterday in a report detailing the results of its annual stress tests on the 18 biggest <a href="news:linkid=MJO9526KLVR7">U.S. banks</a>. Qualitative failures could include faulty corporate governance or risk management, inadequate assumptions about the capital plan, an unsafe capital distribution or unresolved supervisory issues.

BB&T, led by Chief Executive Officer <a href="news:linkid=MJO0E16TTDWF">Kelly King</a>, 64, changed how it calculates risk-weighted assets to meet regulatory guidance, the Fed said. The adjustments increased those assets and triggered a drop in BB&T’s risk-based capital ratios, according to the Fed.

The lender had climbed 9 percent this year through the close of regular trading yesterday, trailing the 12 percent advance for the <a href="news:linkid=MJO9526KLVR8">KBW Bank Index</a> of 24 U.S. lenders.

To contact the reporters on this story: <a href="bloomberg:%3CF%23%3E1%3CBBDP%3E %3CGO%3E" title="Bloomberg Profile">Laura Marcinek</a> in New York at lmarcinek3@bloomberg.net; <a href="bloomberg:%3CF%23%3E1%3CBBDP%3E %3CGO%3E" title="Bloomberg Profile">Elizabeth Bunn</a> in New York at ebunn1@bloomberg.net

To contact the editor responsible for this story: David Scheer at dscheer@bloomberg.net