BB&T Profit Tops Views Despite Rising Loan Losses

Net income applicable to common shareholders fell to $271 million, or 48 cents per share, from $428 million, or 78 cents a share, a year earlier, the Winston-Salem, North Carolina-based company said on Friday.

Analysts on average had forecast profit of 32 cents per share, according to Reuters Estimates.

Excluding preferred stock dividends, profit fell 26 percent to $318 million.

"Earnings were relatively strong given the higher loan losses and additional loan loss reserves," Chief Executive Kelly King said in a statement. The bank is benefiting from record mortgage banking activity as rates slide, as well as growth in commercial loans and low-cost deposits, he said.

BB&T said it set aside $676 million for credit losses, triple the year-earlier level, while net charge-offs were $388 million. Credit weakness was driven by housing-related losses, especially in Florida, Georgia and the Washington, D.C., area.

The bank has taken $3.1 billion from the government's Troubled Asset Relief Program. It said its ratio of tangible common equity to tangible assets was 5.7 percent as of March 31, higher than most of its large rivals.

BB&T is one of the few large U.S. banks not to cut its common stock dividend since the credit crisis began. King said the board will evaluate the 47 cents per share quarterly payout with the goals of remaining "well capitalized in these uncertain economic times" and repaying the government.

The bank ended March with $143.4 billion of assets. It operates 1,504 branches in 11 states and Washington, D.C.

Shares of BB&T closed Thursday at $21.07 on the New York Stock Exchange. The shares have fallen 23 percent this year, compared with a 19 percent drop in the KBW Bank Index.