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(Bloomberg) -- BB&T pares earlier decline of as much as 0.9%; analysts say agreement to consent order with FDIC, state regulators (and soon with the Fed), requiring "corrective actions and enhancements" to address "deficiencies” within Bank Secrecy Act/Anti-Money Laundering (BSA/AML) compliance program, may not increase costs.

• Order limits M&A potential, analysts say
• Separately, on Dec. 20, BBT boosted 2016-2017 share buybacks by $200m

WELLS FARGO (Matt Burnell)

• Notes no criminal activity identified, BBT will pay no financial penalty
  • Order probably won’t materially increase operating expense as BBT may have been aware of possibility for some time, had already begun to invest in process/systems upgrades, hire BSA/AML-specific staff
• May prohibit BBT from pursuing "meaningful" M&A for the next 1-2 years
• Regulatory approval of capital action suggests order doesn’t materially threaten expected capital return actions in 2017 capital planning cycle
• Reiterates outperform

SANDLER O’NEILL (Stephen Scouten)

• While "obviously not a great optic," and will keep BBT out of M&A for "even longer" than many may have expected, doesn’t see material impact on forward earnings
• Reiterates hold
• Also previews BBT 4Q, updates assumptions to reflect steepening yield curve, potential for lower corporate tax rate environment in 2018; raises PT to $48 from $40

EVERCORE ISI (John Pancari)

• Evercore ISI remains "somewhat cautious" even though, on follow- up call, mgmt indicated it doesn’t expect material impact on expenses from consent order, BBT has been building out BSA/AML compliance over past couple of years, most related expenses are already in run rate 
• Reiterates buy, raises PT to $51 from $49; says solid EPS growth, above-peer profitability, and solid credit to present incremental upside to relative valuation over time

DATA

• BBT has 11 buys, 19 holds, 3 sells, avg. PT $46: Bloomberg data
• Short interest 1.7% of shares outstanding as of Dec. 20: Markit 
• BBT up 22% since Nov. 8 vs S&P 500 financials (S5FINL) +18%

RELATED

• Dec. 20, BB&T Cut to Neutral at Hilliard Lyons, PT $50
• Dec. 15, 2017 Bank Outlook Bullish on Growth, Rates, Taxes, Rules: RBC

To contact the reporter on this story: Felice Maranz in New York at fmaranz@bloomberg.net To contact the editors responsible for this story: Arie Shapira at ashapira3@bloomberg.net Beth Mellor