BB&T Corp.'s fourth-quarter earnings fell a less-than-anticipated 37% as the Mid-Atlantic and Southeast regional bank's credit provisions and nonperforming assets rose only slightly from the summer.
Nonperforming assets, or loans in danger of going bad, rose to 2.65% from 2.48% in the previous quarter; it was 1.34% a year earlier. Net charge-offs, loans the bank doesn't expect to collect, rose to 1.83% from 1.29% in the prior year and 1.71% a quarter earlier. Credit-loss provisions rose 37% to $725 million from a year earlier but only grew 3.2% from the third quarter.
Like many regionals, the bank's biggest problems have been linked to real estate, especially in its home construction loan portfolio. BB&T, long considered among the most well-run large regionals, surprised some with its worsening credit problems in the third quarter, but its levels of charge-offs and nonperforming loans were still comparatively low. In June, BB&T was among the first to pay back $3.1 billion it had received from the Treasury Department's Troubled Asset Relief Program.
BB&T posted a profit of $194 million, or 27 cents a share, from $307 million, or 51 cents a share, a year earlier. A survey of analysts by Thomson Reuters predicted 21 cents.
Noninterest revenues increased 20%, led by an 87% surge in mortgage-banking revenue. Net interest income climbed 25%.
Average client deposits were up 29% from a year earlier amid BB&T's August takeover of Colonial Bank, which was shut down by regulators. Deposits grew 7.1% excluding the acquisition, integration of which is supposed to be complete by next quarter.
Regional banks' results so far improved in the fourth quarter, with U.S. Bancorp posting strong profit growth and the losses at both Fifth Third Bancorp and KeyCorp narrowing more than expected.
BB&T shares closed Thursday at $29.08 and weren't active premarket. The stock was down slightly in 2009 and has continued to fall so far in 2010.