BB&T Financial in Wilson, N.C., toils in the long shadows of much bigger rivals, which may explain why the share price still is considered a good buy for a high-quality bank.

"One thing that appeals to me about this bank is that relative to other high-return banks, the share price-performance has been quite good," said Tucker Andersen, a managing partner with Cumberland Associates, a New York money management company.

As investors have poured money into rebounding banks this year, those strong banks that never tripped over their bad loans have largely been ignored. And based on its financial performance over the past five years, BB&T qualifies as one of the stronger banks.

Investors, however, seem to have shunted the bank into the recovering category along with others in the region and have given the share price a fair ride this year.

Average Increase

The stock has risen 27% this year, the average increase for a southeastern bank, according to Keefe, Bruyette & Woods.

The share price hit a high of $30 in July. Since then it has fallen, brought down by the widespread selloff among investors and a rumor that BB&T was going to announce a bank acquisition - a departure from its successful strategy of buying thrifts and converting them to banks. The stock was selling for $27.75 on Friday.

At 138% of book value, the shares are cheap considering the bank's excellent performance and prospects.

BB&T Financial, with $6.3 billion in assets, reported a return on assets at the quarter end of 1.23% and return on equity of 15.14%, slightly above where those performance measures have been for the previous five years.

Nonperformers Kept Low

BB&T has kept a tight rein on credit quality by lending locally in North Carolina and South Carolina, where it owns a bank. Consequently, nonperforming assets account for a low 1.6% of total loans and foreclosed real estate.

The bank's consistent, double-digit growth in earnings is likely to continue over the next two years, even though its chairman is forecasting light demand for loans. The bank has several sizable fee-based businesses, including a state-chartered insurance company.

"We think we can grow these businesses 18% to 20% a year," said John A. Allison, the backing company's chairman.

Impact of Competition

The presence of the giant rivals - Nationsbank, First Union Corp., and Wachovia Corp. - is a mixed blessing for BB&T's share price.

The trio's dominance of North Carolina has made it a |rational' market, said Mr. Andersen. The three banks tend to price their services and loans competitively but still within reason. So BB&T has not had to offer loans at cutthroat rates.

Still, BB&T's share price might benefit more if it was in another market. In some southeastern states, share prices of struggling banks have risen because investors see them as takeover targets. That's particularly true in Virginia, where there are a plethora of small and mid-size banks and no dominant player. But it isn't true in North Carolina, where the three big banks have pretty much carved up the state.

Bank stocks were generally up on Friday, as the Dow Jones Industrial Average closed up 15.67 points, to close at 3328.94.

Leading the charge were shares of Firstar, which rose $2, to $58.50. The banking company is buying back its shares in preparation for an announced acquisition, which may have contributed to the price increase. Another factor may have been a resurgence of takeover rumors.

Fifth Third's share price jumped $1.25, to close at a new high of $52.75. More than 262 million shares changed hands, about four times the normal daily trading volume of the Cincinnati-based bank. Analysts were unable to explain the rise in price.

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