The bank also said it would cut its dividend by more than half to 20 cents, from 45 cents. Standard & Poor's cut its rating to BBB+ from A-, with a negative rating.
Shares were plummeting 15.4% to $15.99.
BB&T
Meanwhile,
BB&T (BBT Quote - Cramer on BBT - Stock Picks), a regional bank based in Winston-Salem, N.C., also said fourth-quarter continuing operations earnings dipped as it girded up its reserve to cover credit losses.
The bank said nonperforming assets increased to 0.52% of total assets in the fourth quarter, vs. 0.29% at the end of the same quarter in 2006. It said annualized net charge-offs were 0.48% of average loans and leases for the fourth quarter, compared to 0.33% in the same period last year.
The bank more than doubled its provision for credit losses to $184 million, from $73 million in the year-ago period. For the year, the banks increased its provision to $448 million, from $240 million a year ago.
BB&T's operating income fell 6.1% year-over-year to $415 million, or 75 cents a share, excluding such items as BB&T's share of the Visa settlement. The Street was looking for 78 cents a share.
"While it is difficult to know the full extent of the economic downturn and the resulting impact on BB&T's credit quality, given our current outlook, we do expect further increases in nonperforming assets and net charge-offs into 2008, but we believe the increases will be manageable," Chairman and CEO John Allison said in a statement.
If last year's hefty merger and restructuring charges are taken into account, BB&T's earnings soared 63.7% year-over-year.
The stock recently added 98 cents, or 3.5% to $29.17.
Laurie Kulikowski
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