UPDATE 2-BB&T profit tops view, CEO says TARP "destructive"

* Results top analyst forecasts

* CEO calls TARP investment "destructive"

* Shares rise as much as 17.5 percent (Adds CEO comments, First Horizon, byline)

By Jonathan Stempel

NEW YORK, April 17 (Reuters) - BB&T Corp (BBT.N) said quarterly profit fell 37 percent as losses tied to real estate increased, but the large U.S. Southeast regional bank said loan losses are moderating, and results topped analysts' forecasts.

Shares of BB&T rose as much as 17.5 percent. Chief Executive Kelly King on a conference call pledged to repay the bank's $3.1 billion of taxpayer money from the government's Troubled Asset Relief Program "as soon as it is humanly possible," calling the investment "destructive."

First-quarter net income applicable to common shareholders fell to $271 million, or 48 cents per share, from $428 million, or 78 cents per share. Analysts on average had forecast profit of 32 cents per share, according to Reuters Estimates.

Excluding preferred stock dividends, profit fell 26 percent to $318 million. The bank has taken $3.1 billion from the government's Troubled Asset Relief Program. It said its ratio of tangible common equity to tangible assets was 5.7 percent as of March 31, higher than that of most large rivals.

King said BB&T benefited from the mortgage refinancing boom, growth in commercial loans and low-cost deposits. The bank also plans to evaluate its 47 cent per share quarterly dividend. It is one of the few large U.S. banks not to have cut its payout since the credit crisis began.

Another southeast regional bank, Memphis, Tennessee-based First Horizon National Corp (FHN.N), posted a quarterly loss applicable to common shareholders of $82.8 million, or 39 cents per share, compared with a profit of $7.9 million, or 6 cents per share, a year earlier. Analysts had expected a 25 cent per share loss.

Most large U.S. banks that have yet to report first-quarter results are scheduled to do so next week.

CEO SAYS TARP IMPACT "NEGATIVE"

BB&T set aside $676 million for credit losses and net charge-offs were $388 million, both triple the year-earlier levels.

Credit weakness was driven by housing losses, especially in Florida, Georgia and the Washington, D.C., area. But King said there are signs of stabilizing property values -- especially in Florida, where they may no longer be in "freefall."

Hundreds of lenders took money from the government's $700 billion Troubled Asset Relief Program, which was designed to spur lending.

Many banks now view the program as an albatross that imposes too many restrictions, including on compensation, and that suggests recipients are desperate for capital. JPMorgan Chase & Co (JPM.N) Chief Executive Jamie Dimon on Thursday said it is now a "scarlet letter" for a bank to be involved in TARP.