Oct. 19--BB&T Corp.'s third-quarter earnings are down 58 percent, but that's a stronger performance than many of its peers.

The Winston-Salem bank announced today that it made $152 million from July through September, compared to $358 million in the same period a year ago. The bank saw increases in loans, deposits and mortgage banking, and a leveling off of early-stage loan delinquencies. However, problems could still be on the horizon: The bank set aside $709 million for potential loan losses, almost double what it set aside a year ago. It blamed poorly performing housing loans in Atlanta, Florida and metro Washington, D.C.

CEO Kelly King said he was "pleased with most aspects of our current performance."

Robert Patten, an analyst at Morgan Keegan, said he expects troubled loans could still creep up, but he doesn't foresee huge write-downs. "We believe BB&T has avoided adverse selection by not making speculative loans during the boom times and that management was careful not to chase risky strategies that have crippled peers, such as pursuing a national market strategy, wholesale (third-party) mortgage brokerage, hot market acquisitions and lending to speculative C&D (construction & development) deals or large high-rise projects," he wrote in a note to clients this morning.

This is the first earnings report since BB&T bought failed Colonial BancGroup Inc. from the government. Though some analysts question the wisdom of buying a failed bank, the August 14. purchase expanded the bank's presence in Florida and gave it a foothold in Texas and Alabama. It also helped BB&T vault onto the list of the country's top 10 banks.

King said the impact from the Colonial purchase has been positive, and the bank said it has brought Colonial's loan-making standards in line with its own. BB&T has historically preferred to operate in areas where it can be a market leader, and last week, it announced it would sell Colonial's 22 Nevada branches, and the underlying deposits, to U.S. Bank.

BB&T has remained profitable every quarter throughout the recession, unlike many of its peers. In June, it repaid the $3.1 billion it had borrowed from the federal government, freeing itself from many of the constraints that are haunting Charlotte-based Bank of America. In May, it was told it did not have to raise extra capital after the government stress-tested the country's biggest banks.

But BB&T shareholders took a hit earlier this year, when the bank cut its dividend from 47 cents to 15 cents. Its shares were down 5 percent at lunchtime, to $26.83.

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