Branch Banking and Trust Corp. (BBT) earned $157m, or $0.23 per share, during Q309, down from $362m in Q308 despite stronger mortgage banking revenue. Net income for the year through Q3 is down, $683m in 2009 compared to $1.2bn in 2008. Nonperforming assets as a percentage of total assets increased from 2.19% at the end of Q209 to 2.48% at Q309’s end. But annualized net charge-offs were down from 1.81% of total assets in Q209 to 1.71% during Q309. Mortgage banking revenue was $144m in Q309, an increase of 73.5% from Q308. The bank said low interest rates are driving increased mortgage originations, which totaled $6.9bn during the quarter. Noninterest expenses increased $315m (31.3%) in Q309 compared to Q308, including a $96m in additional foreclosed property expenses. BB&T said the costs are part of the bank’s strategy to limit costs associated with the foreclosure crisis. BB&T’s provision for credit losses increased from $345m in Q308 to $709m in Q309 and exceeded net charge-offs by $263m. The increase in credit losses was credited to the continued deterioration in housing-related credits, the bank said, specifically in Atlanta, Florida and metro Washington, D.C. During the quarter, BB&T assumed all of the deposits and acquired certain assets and other liabilities of failed Colonial Bank and in doing so, increased its banking franchise, specifically in Florida and Alabama. The takeover also helped boost the bank’s average loans and leases held for investment by $5.7bn, or 6% of the total $100.3bn. However, the average mortgage loans held for investment declined $1.8 billion, or 10.2%, as the bank said it sold more conforming loans in the secondary market. Also during the quarter, BB&T issued 38.5m shares of common stock at $26 per share, leading to net proceeds of $963m. The bank said the offering was made to further strengthen BB&T’s capital levels after the Colonial Bank acquisition. Write to Austin Kilgore.