BB&T (BBT) has done okay over the last quarter, slightly outperforming the regional banking averages since the first quarter. BB&T’s strong fee-generating businesses are increasingly valuable as net interest margin compression looks to intensify, and the bank’s merger with SunTrust (STI) appears on track for a Q3/Q4 close. Unfortunately, while the merits of the deal still look quite sound on a long-term basis, both banks have exposure to tightening spreads over the next year.
Factoring in the impact of rate cuts, tempered in part by loan growth and fee-based income growth,