BB&T Wins Federal Reserve Approval for 2013 Capital Plan

BB&T Corp., North Carolina’s second-biggest bank, won the Federal Reserve’s approval for a new 2013 capital plan after its original proposal was rejected in March.

BB&T will continue paying a 23-cent quarterly dividend, the Winston-Salem-based bank said today in a statement. The Fed didn’t object to its payment of preferred dividends, the firm said.

The lender’s initial capital plan was shot down based on a qualitative assessment, the central bank said at the time. In a statement today announcing its decision, the Fed didn’t provide information on how the new plan differed from the earlier one.

BB&T, led by Chief Executive Officer Kelly King, 64, changed how it calculates risk-weighted assets to conform with regulatory guidance, the Fed said when it objected to the plan on March 14. The adjustments increased those assets and triggered a drop in BB&T’s risk-based capital ratios, according to the Fed.

“In light of several factors, we approached the resubmission conservatively and did not request a further increase in capital deployment at this time,” King said in today’s statement.

BB&T’s shares slid 2.4 percent on March 15, the day after its initial plan was rejected. That was the biggest drop since Nov. 7, 2012. Standard & Poor’s changed its outlook on BB&T’s credit rating to negative from stable on March 18, citing “unanticipated weaknesses” in its risk-management processes.

Stress Tests

BB&T fell 0.6 percent to $35.69 at 12:09 p.m. in New York. The shares have climbed 23 percent this year through yesterday, compared with a 27 percent jump in the 24-company KBW Bank Index.

Regulators have run annual stress tests on the biggest U.S. banks to see how they would weather an economic shock, a strategy to prevent a repeat of the 2008 financial crisis. The banks submit capital plans, which are proposals of dividend payouts and share buybacks that were curtailed during the crisis.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE