BB&T Corp. ( BBT) reported a sharp drop in first-quarter profit on Friday, but handily topped Wall Street expectations, sending its shares soaring in morning trading.

The Southern regional bank reported $271 million, or 48 cents per share, in earnings, down 37% from the year-ago quarter. Analysts had expected 31 cents per share, on average, according to Thomson Reuters.

BB&T was trading up 6.4% to $22.41 in recent trading.

BB&T posted $36 million in impairment charges and boosted its credit provisions for future loan losses by $288 million as the ratio of nonperforming assets accelerated. The trend showed that the economic crisis may be far from over as consumers continue to struggle to pay off loans.

However, BB&T reflected a trend also evidenced by larger competitors in which lower interest rates have stirred a mortgage-refinancing boom, helped bring a flock of new home buyers into the market, and made the cost of interbank borrowing far cheaper. BB&T's net interest income surged 12.7% to $1.15 billion due to differentials in its lending and borrowing rates.

Big banks like Wells Fargo ( WFC), JPMorgan Chase ( JPM) and Citigroup ( C) have all benefitted from similar trends.

CEO Kelly King pointed out that "record production" from mortgage banking, combined with "very strong growth" in commercial loans and deposits helped offset troubles from existing debt that went bad. The bank's tangible common equity -- a popular measure of a bank's financial strength -- improved 40 basis points to 5.7% over the first three months of the year.

BB&T also said it would hold its 47-cent quarterly dividend steady -- an uncommon move not replicated by many competitors. Other companies, like Regions Financial ( RF), have slashed dividends in an effort to preserve capital.

"We fully understand how important the dividend is to our shareholders," King said in a statement. He added that future decisions "will reflect our desire to remain well capitalized in these uncertain economic times and to develop a capital plan that allows us to repay the U.S. Treasury's capital investment."

BB&T said it has deployed that capital in the $1.9 billion in new lending it has made since receiving $3.1 billion in TARP funds last fall. It made a $40 million dividend payment to the Treasury Department during the first quarter in connection with the funds, which were issued in exchange for preferred shares.

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