BB&T Corp. to purchase the F&M National Corp. for 3.89 times revenue, The

Weekly Corporate Growth Report, Feb 5, 2001

The Deal: The BB&T Corp. has agreed to purchase the F&M National Corp. for $981 million in stock. The acquisition is an effort by BB&T to expand into several economically thriving communities.

Discussion: The F&M National Corp. is a holding company for nine banks operating more than 140 branches in Virginia, West Virginia and Maryland. Targeting individuals and businesses, the banks offer standard retail services like checking and savings accounts, money market accounts and CDs; insurance, securities and annuities are also available. Lending activities consist mostly of residential and commercial mortgages, which each account for 30 percent of the loan portfolio, as well as consumer and commercial loans. Through F&M Trust, the company also provides trust services; other subsidiaries of the banks offer mortgage processing and credit counseling.

The BB&T Corp. is a banking company that has more than 800 banking branches in the Carolinas, Georgia, Kentucky, Maryland, Virginia, West Virginia and Washington, DC. Its largest subsidiary, Branch Banking and Trust, is one of North Carolina's oldest banks. BB&T offers consumer and commercial loans funded primarily by saving accounts, CDs and IRAs. BB&T's acquisitions aren't limited to banks; in addition to securities firm Scott & Stringfellow Financial, the company has purchased several insurers. Other subsidiaries provide lease financing and investment services.