It has taken a while, but BB&T (BBT) continues to show signs of improvement and close some of the performance gap with peers like PNC Financial (PNC), Fifth Third (FITB), Comerica (CMA), Key (KEY), and U.S. Bancorp (USB) that built up over the past few years. Although lower loan growth is a disappointment, a low deposit beta and rising interest sensitivity offset it somewhat, and management is doing well on expenses and credit quality.
When it comes to valuation, I think the market has it more or less right at this point (which hasn’t often been the case). U.S. Bancorp and Wells Fargo(WFC) are cheaper (for good reasons) and PNC arguably offers better quality today for a similar level of expected return, but I believe BB&T has more self-improvement potential and more potential for higher/better earnings revisions over the next few years.
