North Carolina-based bank BB&T (NYSE:BBT) reported fourth-quarter results that were a positive mainly due to the lack of negatives. In a somewhat stormy banking environment, where players like Washington Mutual (NYSE:WM) with exposure to subprime credit have experienced turbulence, BB&T largely sailed through with a flattish quarter.

For the quarter, BB&T's net income fell to $251 million from $430 million a year ago, but $139 million of the decrease was due to a one-time tax charge relating to a 1997 lawsuit filed against the IRS regarding leveraged lease transactions. BB&T lost, so it took a charge to reflect the ramifications of the adverse ruling. BB&T also took a $47 million charge related to security losses to reposition the balance sheet for 2007 and beyond. However, excluding these charges, operating earnings increased 5.4% to $449 million, and net interest margin eked out a slight 2-basis-point sequential improvement to 3.70%. Other metrics showed favorable improvement in spite of competition, with average deposits up 9.5% from the prior-year period (to $79.9 billion), 11.3% loan growth, and fee-based income up 9.1% (see Fool by Numbers).

More importantly, BB&T's credit quality proved solid. Non-performing assets as a percentage of total assets increased one basis point to a very respectable .29% (US Bancorp (NYSE:USB), another well-run bank, came in at .27%). Provision for credit losses increased 4.9% to $72.7 million. In the earnings call, management noted that because the bulk of their loans are to local commercial real estate developers who know their markets well and keep a tight lid on inventory, BB&T didn't have much of a problem with its commercial real estate portfolio.

BB&T's impressive performance ratios also stayed firm (adjusted for the charges), with return on average assets at 1.50%, a decrease of 7 basis points; return on average equity at 14.92%, a 26-basis-point drop; and a 54.1% efficiency ratio, up 110 basis points over last year.

During the conference call, BB&T's management also remarked that, as they've said for years, they'd be completely open to doing a merger of equals with a commercial or investment bank, or an insurer. They believe this makes sense as the banking industry consolidates and big regional banks find themselves competing with versatile financial service conglomerates like JP Morgan (NYSE:JPM). Meanwhile, however, BB&T expected 2007 to be an uneventful year in M&A and expects to continue to consolidate smaller community banks with strong local deposit market shares.

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Fool contributor Emil Lee is an analyst and a disciple of value investing. He doesn't own shares in any of the companies mentioned above. Emil appreciates comments, concerns, and complaints. The Motley Fool has a disclosure policy.