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.