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BB&T Corp.

(BBT) - Get Report

Thursday reported a second-quarter profit that rose more than 70% from year-ago levels, and said it believes it reached an "inflection point" in pricing for problem assets.

The Winston-Salem, N.C.-based financial services holding company said it earned $210 million, or 30 cents a share, in the latest three months. In the same period a year earlier, net income totaled $121 million, or 20 cents a share.

BB&T said the latest quarter includes merger-related charges of $38 million, or 3 cents a share. The average estimate of analysts polled by

Thomson Reuters

was for a profit of 33 cents a share in the June period.

"BB&T's core businesses continued to produce solid results in the second quarter," said Chairman and Chief Executive Officer Kelly S. King. "In particular, we have seen a pick up in lending, with $17.5 billion in originations this quarter compared to $15.4 billion in the first quarter. This growth is led by prime auto, C&I and prime mortgage."

BB&T said it believes the inflection point on problem assets occurred early in the second quarter, when it saw "more bidders and more acceptable valuations," which prompted it to dispose of $682 million worth of such assets in the period.

The bank also weighed in on the financial reform legislation that was signed into law by President Obama on Wednesday.

"In terms of the legislation's impact on BB&T, our business model is still that of a traditional commercial bank, so many of the provisions will have little or no impact on us," said King. "While we will initially have moderately higher costs and reduced revenues in some areas, we will effectively implement the provisions of the law and we expect little effect on our long-term performance."

On the credit front, BB&T said nonperforming assets fell 3.1% on sequential basis to $4.33 billion from $4.46 billion as of March 31. At the end of last year's second quarter, however, nonperforming assets totaled $3.34 billion. BB&T said the 3.1% decline was its first decrease in total NPAs since the first quarter of 2006.

The stock finished Wednesday at $25.91, down 2.4%. Year-to-date, shares were up 2.1%.


Written by Michael Baron in New York


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