BB&T Corp. to purchase First Virginia Banks Inc. for 4.21 times revenue

Weekly Corporate Growth Report, Feb 3, 2003

The Deal: BB&T Corporation has agreed to acquire First Virginia Banks for $3.38 billion in stock. Under the terms of the agreement, BB&T will pay 1.26 BB&T shares in exchange for each share of First Virginia. Based on recent BB&T prices, the deal values First Virginia at about $47.14 per share. The acquisition is expected to close in the third quarter of 2003.

Discussion: First Virginia Banks is a multibank holding company. The company has eight subsidiary banks with more than 360 branches in Virginia, Maryland and eastern Tennessee. The banks' loan portfolios are primarily based on consumer loans, followed by residential and commercial real estate.-mortgage loans. First Virginia subsidiaries also sell multiline insurance and write second mortgages.

BB&T Corp. owns a number of Southeast banking, insurance, and asset management companies. Through its subsidiaries, BB&T operates more than 1,100 banking branches. BB&T owns Branch Banking and Trust, one of the oldest banks in North Carolina.

When the acquisition is completed, BB&T will be the 12th-- largest bank in the United States. BB&T is projecting cost savings of $131 million from the merger, to be created by merging back offices and closing about 100 branches. The acquisition will also increase BB&T's market share in the lucrative Virginia market.

Copyright NVST, Inc. Feb 3, 2003
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