BB&T Corp. says bank’s top executives won’t receive 2008 bonuses

BB&T Corp., the Winston-Salem, N.C. bank, that has the third-largest market share in South Carolina, said Friday that its executives will not receive 2008 bonuses under the company’s short-term incentive plan.

Staff report
Published Feb. 2, 2009

With $152 billion in assets, BB&T Corp. is the nation's 12^th-largest financial holding company and operates more than 1,500 financial centers in 11 states and Washington, D.C.

BB&T’s statement issued Friday did not say why its executives would forego bonuses. It did state that the company earned $1.5 billion in net income in 2008.

But BB&T had earlier reported credit losses totaling $528 million in the fourth quarter of 2008, an increase of $344 million compared with the same quarter a year earlier. In explaining the losses, BB&T said in its earlier earnings statement:

“The increases in net charge-offs, nonperforming assets and the provision for credit losses were driven by continued deterioration in residential real estate markets and the overall economy with the largest concentration of credit issues occurring in Georgia, Florida and metro Washington, D.C.”

As a consequence of its bad real estate and mortgage loans, BB&T has received $3.1 billion in taxpayer funds as part of the U.S. Treasury’s bailout of the banking industry.

Also on Friday, President Obama and members of Congress slammed financial institutions that have paid a cumulative $18.4 billion in bonuses last year, despite the hundreds of billions of taxpayer funds poured into the banks and investment firms because of the mortgage lending crisis.

Senate Banking Committee Chairman Christopher Dodd said the bonuses were “unacceptable,” and Obama described them as “shameful.”

BB&T said it remains one of the strongest capitalized financial institutions in the industry.

“We have traditionally set very difficult goals, and although we are among the top performers in the financial industry in 2008, we did not earn a bonus based on our targets,” said Chief Executive Officer Kelly S. King in Friday’s statement. “This has been an extremely difficult economic environment, even for well-capitalized and profitable financial institutions.”

“BB&T's Tier I capital ratio, a measure of financial strength and soundness, is 12%, significantly higher than the government's safety threshold of 6%. BB&T's total capital ratio is 17.1%, notably higher than the government's minimum ratio to be well capitalized of 10%,” the bank statement said.

BB&T says it has increased loans and investments, as required by the terms of the Treasury’s purchase of shares in the bank.