BB&T Corp.'s first-quarter net income fell 26% despite $150 million of securities gains as credit quality continued to erode and loss provisions tripled.

President and Chief Executive Kelly S. King said the company expects "continued increases" in nonperforming loans amid "this difficult environment." But on a positive note, King also said the company saw "record" mortgage-banking production and "very strong growth" in commercial loans and low-cost client deposits.

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