BB&T Corp. Chief Executive Kelly King has had two priorities as the economy worsened: repaying all of the Winston Salem, N.C., company's federal aid and restoring its dividend to prerecession levels.

King said he met that first goal on Friday, with BB&T announcing that it had paid $67 million to purchase stock warrants held by the Treasury Department. BB&T repaid its $3.1 billion in Treasury funds last month.

The $152.4 billion-asset company, which posted a 52% drop in second-quarter profits, was among several regional banking companies to report results Friday. Two others, Marshall & Ilsley Corp. and First Horizon Corp., lost money in the quarter.

King told analysts that he would now set his sights on boosting the company's 15 cent-per-share dividend after cutting the quarterly payout by 68% in May. "When we cut it, it was the worst day in my 37 years" with the company, he said.

Now that BB&T has gotten "the government out of our hair," King said he aims to "restore our dividend as fast as possible."

Exactly when will depend on when the economy starts rebounding, and when the company starts setting aside less money to cover bad loans in its residential and corporate loans portfolios, King said. "I don't want to do it too early," he said. "I've been through this nightmare once, I don't want to go through it again."

BB&T earned $208 million — or 20 cents per share — in the most recent quarter. Analysts surveyed by Bloomberg expected it to earn 21 cents per share. Provisions rose 3.7% from the first quarter and 112% from a year earlier to $701 million.

Meanwhile, the $59.8 billion-asset Marshall & Ilsley said it lost $139.3 million in the quarter, or 50 cents a share. In the second quarter of 2008, the Milwaukee company lost $393.8 million.

"Credit-quality trends were a little worse than expected, and pre-provision earnings levels showed some weakening," said Dennis Klaeser, a senior analyst at Raymond James & Associates.

M&I's loan-loss provision rose 2% from the first quarter, but fell 47.2% from a year earlier, to $468.2 million. Nonperforming assets rose 18.2% from the first quarter and more than doubled from a year earlier, to $2.86 billion.

First Horizon reported its fifth straight quarterly loss. The $28.8 billion-asset Memphis company lost $123.2 million, or 58 cents a share. Analysts had expected a loss of 33 cents a share.

Analysts said First Horizon missed estimates because of the volatility in its mortgage banking, which lost $44.7 million before taxes in the second quarter, compared with earning $84.8 million in the first quarter. "In the mortgage business is where we really saw most of the volatility," said William "B.J." Losch, First Horizon's chief financial officer. "But to be honest, the first quarter was not really as good as it looks and the second quarter was not nearly as bad as it looks."

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