Oct. 20--An increase in customers struggling to make housing-related loan payments hampered BB&T Corp. again in the third quarter.

The bank reported yesterday that it had a 57 percent decrease in net income to $157 million despite posting double-digit gains in loan and fee revenue.

There were two main reasons for the profit decline: The bank nearly doubled its loan-loss provision in the quarter to $709 million compared with a year ago. Its nonperforming assets jumped 150 percent to $4.1 billion from a year ago.

But BB&T remained profitable while some larger peers, in particular Bank of America Corp. and Citigroup Inc. -- had major losses. BB&T has diluted earnings of 23 cents a share, down from 65 cents a year ago. The earnings matched the average forecast of analysts surveyed by Zacks Investment Research.

Kelly King, the president and chief executive of BB&T, said he was pleased with most aspects of the quarterly performance. "However, our earnings continue to be negatively affected by a significant provision for credit losses and other costs related to the credit environment," he said.

The bank said that the increases "were driven by continued deterioration in housing-related credits," primarily in Atlanta, Florida and metro Washington, D.C.

Robert Patten, an analyst with Morgan Keegan, said he was not surprised that BB&T's share price declined "in what may be interpreted as slightly worse-than-expected credit trends in the bank's real-estate portfolio."

The share price dropped 4.3 percent, or $1.22, to close at $27.03.

rcraver@wsjournal.com

727-7376

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