Fitch Revises Long-Term Rating Outlook Of BB&T To Positive.

Business Editors

NEW YORK--(BUSINESS WIRE)--Jan. 29, 2003

Fitch Ratings has revised the long-term Rating Outlook on BB&T Corporation (Senior, 'A+') and its subsidiaries to Positive from Stable. All other ratings, except the bank level Support Ratings, have been affirmed. The Support Ratings for BB&T's bank subsidiaries have been changed to a '4' from a '5'.

Despite a difficult operating environment and its integration of numerous acquisitions, BB&T continues to produce steadily improving operating results. Given BB&T's strong performance, combined with its solid asset quality, sound capital base, as well as good liquidity and funding positions, Fitch has revised BB&T's long-term Rating Outlook to Positive. BB&T's financial position has clearly benefited from its acquisition strategy. The expanded franchise has provided the company with a broader customer base in which to cross-sell its extensive product set. Further, BB&T has been able to smoothly integrate its multitude of acquisitions without materially disrupting operations. BB&T's asset quality has been pressured by the weak economic environment, but still compares favorably to peers. BB&T's relative credit performance is largely attributed to the company's granular loan book and that the company has not traditionally participated in the large corporate banking market and, therefore avoided many of the problems that have befallen its peers. Capitalization is viewed as sound considering the company's earnings power and good loan quality. With regard to funding, BB&T's expanding banking franchise provides the company with a significant core funding base.

In order for BB&T to see further positive rating movement, Fitch would expect BB&T to sustain its current level of core performance while preserving its good credit quality and sound capital base. Specifically, Fitch would like to see asset quality measures return to more historical norms, while maintaining its relative capital position. Additionally, as BB&T pursues larger acquisition targets, the company will need to demonstrate that it can manage the increased execution risk associated with such transactions.

The change in BB&T's bank level Support Ratings reflects the increased importance of the company's banking franchise in its core markets. As such, Fitch believes there would be greater willingness on behalf of the regulatory authorities to support BB&T's bank subsidiaries should they run into financial difficulties. However, while Fitch believes support is now more likely, it is not viewed as certain.

Recently, BB&T announced that it was acquiring First Virginia Banks, Inc., (FVB) the $11.2 billion banking company headquartered in Virginia. The acquisition of FVB will significantly strengthen BB&T's presence in Virginia, as well as enhances its presence in Maryland, Tennessee, and the Metro DC area.

Ratings Affirmed:

BB&T Corporation

--Senior long-term 'A+';

--Subordinated debt 'A';

--Senior short-term 'F1';

--Individual 'B';

--Support '5'.

Branch Banking and Trust Company

--Long-term deposits 'AA-';

--Short-term deposits 'F1+';

--Senior long-term 'A+';

--Senior short-term 'F1+';

--Individual 'B'.

Branch Banking and Trust Company of South Carolina 

--Long-term deposits 'AA-';

--Short-term deposits 'F1+';

--Senior long-term 'A+';

--Senior short-term 'F1+';

--Individual 'B'.

Ratings Changed:

Branch Banking and Trust Company

--Support changed to '4' from '5'.

Branch Banking and Trust Company of South Carolina

--Support changed to '4' from '5'.