BB&T Cuts Dividend To Repay TARP
- May 12, 2009
- Dividend News, Dividend Stocks
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BB&T (BBT: 29.42 -0.78%) announced yesterday that they are reducing their quarterly dividend by 68% to $.15 per share.
The dividend cut reduces BB&T’s current dividend yield from 7.7% to 2.5%.
“Our board carefully weighed many factors in making this decision,” said President and Chief Executive Officer Kelly S. King. “We have a long and proud history of paying dividends and understand how important the dividend is to our shareholders, so this decision to temporarily reduce the dividend was extremely difficult for the board and, for me personally, it marks the worst day in my 37 year career.
“In addition, our current earnings, while superior to our peers, are not likely to justify our $.47 dividend in the near term. When market conditions improve and our earnings provide for an increase in the dividend, we are committed to increasing it accordingly.”
The dividend reduction is expected to save BB&T approximately $725 million on an annual basis.
The dividend cut was made in conjunction with an announcement that BB&T would repay the TARP loans they received last year.
The dividend will be payable on August 3, 2009 to shareholders of record as of July 10, 2009.
Since the beginning of the year, BB&T’s shares have fallen 16% as they have underperformed the 4% decline in the Dow Jones industrial average.
