Regional bank BB&T (BBT) reported a near-doubling in its first-quarter earnings, due in part to record mortgage-banking revenue. The bank also cut expenses related to REO, based on an agressive selling strategy.

BB&T earned $431 million in the first quarter, up 92% from $225 million a year earlier. Its earnings per share of $0.61 also beat a market consensus of $0.57, according to MarketWatch.

Its first-quarter earnings also outpaced the $391 million it made a quarter earlier, which was the bank’s strongest quarter since mid-2008.

“BB&T posted a very strong first quarter of 2012, driven by broad-based loan growth, strong noninterest income and lower expenses compared to last quarter,” chief executive Kelly King said in the earnings release.

BB&T’s $2.3 billion in revenue for the quarter rose $309 million from a year earlier, but declined $67 million from the fourth quarter.

Mortgages held by the North Carolina-based bank increased to $21.1 billion in the first quarter, up 17.5% and 20.2% from a year and quarter earlier, respectively.

Refinance activity made up a bulk of mortgages originated in the first quarter, BB&T executives said during a Thursday conference call. But the bank saw a “substantial shift” toward purchase loans as the quarter progressed, King said.

“Clearly confidence is coming back,” King said. Future proportion of purchase and refinance activity could depend on whether interest rates rise, but King said it’s hard to give a prediction right now.

Mortgage-banking noninterest income grew 127% from a year earlier and 60% from the previous quarter to $216 million.

Those higher mortgages revenues came from gains on mortgages sold and “an increase in the valuation of mortgage servicing rights,” according to BB&T.

Executives said the bank is following an “aggressive” strategy to sell off foreclosed homes. Bank-owned homes dropped $158 million in the first quarter from three months earlier.

Expenses from foreclosures dropped $51 million and $254 million from a quarter and year earlier, respectively, attributed by BB&T to lower inventory and “write-downs and losses” in the fourth quarter.

The bank expects foreclosure expenses to continue to fall through the rest of 2012, executives said.

All loans 90-plus days past due dropped to $157 million from $263 million in the first quarter 2011.

Deposits at BB&T totaled $124.6 billion as of March 31, up 8.8% and 18% from a quarter and year earlier, respectively.

ascoggin@housingwire.com

@AScoggin