BB&T Earnings Shy of Estimates

(Update includes additional information from financial report; updated share prices throughout.)

BB&T Corp. (BBT) shares sold off as much as 8.1% on Friday, after the North Carolina bank holding company reported second-quarter earnings below Wall Street's expectations.

BB&T reported a profit from continuing operations of $208 million. Net income available to common shareholders was $121 million, or 20 cents a share, which was slightly below the Thomson Reuters consensus estimate of 21 cents.

Net income a year earlier was $428 million, or 78 cents a share. Earnings in the first quarter of 2009 were $318 million, with $271 million available to common shareholders, or 48 cents a diluted share.

The stock, which fell as low as $20.53 on Friday, recently was trading down 6.7% to $20.83.

Second-quarter earnings were affected by a $47 million writedown associated with the company's repayment of the government's $3.1 billion preferred equity investment made through the Troubled Asset Relief Program. The company's bottom line also was hit by $14 million in accrued dividends paid on June 17, when the company exited TARP.

The bank reported a $701 million provision for loan losses in the second quarter, up from $683 million in the first quarter and $330 million a year earlier.

BB&T's return on average assets for the second quarter was 0.56%, compared to 0.86% for the first quarter and 1.28% a year earlier. The return on average common shareholders' equity was 3.43%, down from 8.29% the previous quarter and 13.27% in the second quarter of 2008.

As expected, credit quality continued to decline, as the company's reported nonperforming assets, including nonaccruing loans and repossessed real estate, comprised 2.19% of total assets, compared with 1.92% at March 31. The annualized ratio of net charge-offs to average loans was 1.81%, up from 1.58% in March and 0.72% a year earlier.