BB&T Corp. reported its second-quarter net income droppednearly 7 percent, but its insurance brokerage arm grew nearly 4percent despite the pressures of falling prices

As a whole, for the second quarter Winston-Salem, N.C.-basedBB&T reported net income dropped by $30 million, to $428million. This translated into a 5 cent decline in earning per shareto 78 cents a share. The results beat analyst's consensus estimateson earnings per share of 68 cents a share.

BB&T said income from insurance operations increased 3.5percent to a record $237 million during the second quarter of thisyear compared to $229 million for the same period last year.

The increase was primarily due to new product initiativesintroduced during the second quarter, the bank said.

For the first six months, net income fell off $23 million, orclose to 3 percent, to $856 million. Earnings per share, comparedto the same period last year, were down 4 cents to $1.56 ashare.

John A. Allison, chairman and chief executive officer ofBB&T, called the current economic environment challenging, butwhat he termed an economic correction would benefit the bank in thelong term as "irrational and undisciplined" lenders exit themarket, reducing competition and allowing disciplined underwritingto take hold.

Insurance revenues were down 3.9 percent compared to the sameperiod last year, said Mr. Allison, up 22.5 percent on anannualized basis, and flat for the first six months of the year. Hesaid the results "were pretty good" considering rates have fallen10-to-15 percent on commercial insurance lines.

"That we can have flat revenue this year reflects a prettymajor, positive movement in market share from our insuranceoperations," he said.

On the issue of acquisitions Mr. Allison said the bank iscontinuing to look for insurance agency opportunities, noting thatthe company is pleased with its June 2 acquisition of UnionBancInsurance Services Inc. in San Diego.

He noted that this is a difficult time for a number ofindependent agents and brokers confronting the soft market, and thebank hopes to announce additional acquisitions in the future. Hesaid BB&T has an extremely efficient insurance operation andthe best revenue production per employee in the industry.