BB&T said its insurance brokerage business suffered a 1.4percent decrease in commissions because of the soft market.

The Winston-Salem, N.C., bank formally known as BB&TCorporation reported that for the third quarter of this year,insurance operations decreased $3 million to $206 million.

Insurance commissions account for close to 50 percent ofBB&T's fee business.

During a conference call John A. Allison, chairman and chiefexecutive officer, said insurance fees were "fairly challenging" inthe quarter in part due to seasonal downtrends but also thecompetitive pricing environment. He said commissions have been flatwith premium pricing down 10-to-15 percent. He expected earnings tobe stronger in the fourth quarter but overall growth in that sectorto be modest.

"We are moving market share to keep revenues up in insurance,"said Mr. Allison.

BB&T is ranked the fourth largest bank holding company ofinsurance, according to a report issued recently by Michael WhiteAssociates and the American Bankers Insurance Association.

The company reported fee business income increased over 2percent, or $15 million, to $675 million for the third quarter ofthis year.

As a whole, BB&T reported net income for the quarterincreased close to 7 percent, or $27 million, to $444 million, or80 cents a share.

Interest income rose 13 percent, or $227 million, to more than$2.03 billion.

For the first nine months of this year, net income rose $46million, or 4 percent, to $1.3 billion, or $2.40 a share. Feeincome rose 7 percent, or $137 million, to $2.06 billion. Interestincome was up 17 percent, or $855 million, to $5.9 billion.

Insurance fees increased close to 6 percent by $33 million to$632 million compared with the first nine months of last year.

The company said the insurance service made two acquisitionsduring the quarter, Sydney O. Smith Inc. of Atlanta and HeritageTitle Services of Louisville, Ky.

Mr. Allison said BB&T has suffered the same challenges asother banks in losses in lending due to disruptions in the housingmarket. He said the company's results were three cents a share offfrom street estimates.

He said the bank will continue to pursue acquisitionopportunities outside of the bank industry, particularly ininsurance.

In the mortgage lending area, Mr. Allison said he does notbelieve the bank will go through the same problems with loanfailures because the institution did not get into the subprime andunsecured loans that other banks have.

However, the institution is a large lender to home builders whoare suffering from the drop in the real estate market, which isaffecting BB&T's earnings. In this area, the institution hastaken care to be very conservative in its lending practices. Hesaid he expects the current disruption to last from a year to 18months, but improvements should begin by this spring.

"The market will correct itself," he said.