A trio of regional banking heavyweights is set to hold annual meetings on Tuesday, with say on pay serving as the main attraction.
SunTrust Banks (STI), BB&T (BBT) and PNC (PNC) will all gather shareholders together in their respective hometowns. PNC and SunTrust are scheduled to webcast their meetings.
BB&T is holding its annual meeting at the Embassy Suites in downtown Winston-Salem, N.C. PNC shareholders will gather at the August Wilson Center for African American Culture in Pittsburgh. SunTrust will host investors at the SunTrust Plaza Garden Offices in Atlanta.
Tuesday will mark the first annual meeting for William H. Rogers Jr. as chairman and chief executive of $178 billion-asset SunTrust. Rogers, who succeeded James Wells 3rd last year, leads a company that has been plagued by credit problems in its mortgage portfolio in recent years.
SunTrust has been hammered by its exposure to the battered Florida real estate market. In the fourth quarter, the company's provision to cover potential repurchase requests on mortgages jumped 84% from a quarter earlier, to about $215 million. The company warned in January that repurchase requests are likely to continue to cause pain in future quarters.
Still, the company showed resilience in the first quarter. On Monday it may have caught a break after reporting a strong first quarter, with earnings jumping 39% from a year earlier, to $245 million, on solid revenue growth and a big decrease in the loan-loss provision.
Shareholders are apt to ask Rogers to outline plans for sustainable growth. Management should also expect questions about March's stress test results. The Federal Reserve determined that SunTrust would barely fall short of a 5% capital minimum under a hypothetical scenario in which the economy experienced a nosedive.
Kelly King, the chairman and CEO at BB&T, isn't likely to face that kind of pressure. He inherited one of the few regional banking companies that remained profitable during the recession and financial crisis, orchestrated the purchase of the failed Colonial Bank, and had consistently expressed an interest in conservatively expanding in corporate lending and states such as Texas and Florida.
Last week, the $176 billion-asset company reported that its earnings rose 10% from the fourth quarter and nearly doubled from a year earlier, to $431 million. The company also raised its dividend after passing the latest round of governmental stress tests.
Shareholders could grill King about acquisitions, particularly in Florida. The company has a pending deal to buy BankAtlantic and confirmed that it had flirted with buying BankUnited before that company's board decided against selling.
PNC has changed considerably since the last annual meeting.
In the past year it struck and completed two deals that expanded its presence in the Southeast: a $3.45 billion agreement for RBC Bank (USA) and a $42 million agreement for 27 Flagstar Bancorp branches in Atlanta. The RBC deal added 900,000 customers and more than 400 branches in six states including Georgia and the Carolinas.
Profits fell 2.5% in the first quarter thanks largely to integration-related costs, but executives stressed that the RBC acquisition will begin to pay off quickly.
Votes will be held on three matters: say on pay, reelection of its entire 15-member board and renewal of the company's independent auditor.
PNC has held advisory votes on say on pay the last three years. More than 90% of shareholders have voted in favor all three times, including a 96% approval last year, PNC said in its proxy statement.
PNC plans to raise the pay for most of its top executives, but not as much as it did last year as a result of a competitive analysis done by its compensation committee. For example, Chairman and Chief Executive James Rohr is to be paid $8 million in 2011, including salary and other incentives. That's 13% lower than a year earlier, and 34% lower taking into account a special award granted executives last year that will be withheld this year. Overall, his pay package is valued at $16.6 million, including stock awards and other long-term compensation.
Though 2011 was a strong year, the compensation committee "believed that PNC's performance in 2011 against the measures selected to help benchmark our relative performance was not as strong as our relative performance in 2010," the proxy said.
PNC ranked 10th in earnings-per-share growth and sixth in return on common equity last year among a peer group of 12 large banks that included Bank of America (BAC), JPMorgan Chase (JPM) and BB&T.
A number of other, smaller banking companies also have annual meetings set for Tuesday, including Associated Banc-Corp (ASBC) in Green Bay, Wis.; BOK Financial (BOKF) in Tulsa, Okla.; Comerica (CMA) in Dallas; and Union First Market Bankshares (UBSH) in Richmond, Va.