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Aiming to strengthen its capital base following the sizable acquisition of Colonial Bank, BB&T Corp. (BBT) said Monday it plans to issue $750 million in common stock.

The Winston-Salem, N.C., bank also disclosed more details on the loss-sharing agreement it reached with the Federal Deposit Insurance Corp. for Colonial's troubled loan book, and said it plans to cut $170 million, or 30%, of the purchased bank's expenses. It said that integrating Colonial will cost $245 million.

Bank regulators took control of Colonial BancGroup Inc. late Thursday and sold the Montgomery, Ala., company's main banking unit to BB&T.

BB&T has been an active acquirer of banks and insurance brokers for years, and Colonial bolstered BB&T's already strong position in the South with a bigger market share in Florida and a sizable presence in Alabama. The acquisition raises BB&T to the eighth-largest U.S. bank by deposits from the eleventh spot.

On Monday, BB&T started to price a secondary stock offering to replenish its capital base. Regulators keep a keen eye on capital, and the $750 million stock offering, along with $575 million of trust preferred securities issued in July, will lift BB&T's Tier 1 common capital ratio to 8.6%, from 8.4% on June 30.

In June, the bank was among the first to pay back $3.1 billion it had received from the Treasury Department's Troubled Asset Relief Program.

BB&T's shares rallied almost 10% Friday with news of the Colonial deal. The stock was down 4.5% in early afternoon trading Monday, to $26.90, amid a broader stock market decline.

Colonial collapsed under the weight of souring residential construction loans in troubled markets like Florida and Georgia. BB&T, which acquired about $22 billion of Colonial's $25 billion of assets, said the FDIC covers 80% up to $5 billion in losses related to loans it cannot collect, and 95% for further losses up to $14.3 billion. Assets not covered by the loss-sharing agreement include securities and a small portfolio of consumer loans.

Albert Savastano of Fox-Pitt Kelton Cochran Caronia Waller upgraded BB&T's shares to "in line" from "underperform" on Monday. In his research report, he wrote BB&T "is still behind peers in terms of recognizing credit losses" but "the Colonial acquisition boosts the near term and long-term earnings prospects."

Dick Bove of Rochdale Securities LLC was skeptical about the value of the deal for BB&T after it was announced, and, upon reviewing the new details disclosed Monday morning, said in an interview that "the deal looks worse" - in part because he had not anticipated the capital raise. Bove said BB&T might be able to issue the new stock at around $25, and advises clients to short the shares.

He said the loss-sharing agreement could still end up costing BB&T $1.5 billion. Colonial might dilute BB&T's earnings for three years, he said.

Like several analysts, he expects Colonial deposits to run off because BB&T is unlikely to pay interest rates as high as Colonial. Bove estimated that a minimum of 15% and as much as 25% of the acquired $20 billion of deposits could leave BB&T. "Colonial's image was damaged," and there is danger that the damage could spill over to impact BB&T, Bove said.

BB&T's chief financial officer, Daryl Bible, said in an interview late Friday that he expects some deposit attrition, but that BB&T has proven this year that it can steal market share away from competitors by offering better service, and the bank intends to use the same skills at Colonial.

According to Bible, the acquisition is "strategically and financially compelling," and the loss sharing agreement leaves BB&T with "minimal risk."

BB&T is expanding in markets such as Florida, which Bible conceded is troubled at the moment but attractive longer term.

-By Matthias Rieker, Dow Jones Newswires; 212-416-2471; matthias.rieker@dowjones.com