- The Washington Times - Wednesday, January 22, 2003

Winston-Salem. N.C., banking company BB&T; Corp. announced yesterday it would buy First Virginia Banks Inc. of Falls Church in a $3.38 billion stock swap.
The deal, subject to regulatory approval, is expected to close in the third quarter.
The merger will consolidate First Virginia's 364 bank branches 298 of which are in Virginia and 55 in Maryland under the BB&T; name. First Virginia customers will not see a change in their account services or policies, said Barry Fitzpatrick, First Virginia chairman, president and chief executive officer.
"BB&T; and First Virginia's customer service operations are virtually identical, so customers won't see any major changes," in the 2.5 million accounts First Virginia has with 850,000 households, Mr. Fitzpatrick said.
BB&T; said it will exchange 1.26 of its shares for each First Virginia share. The companies decided on the all-stock merger for tax advantages to the shareholder, Mr. Fitzpatrick said. BB&T; plans to buy back 4.2 million company shares in the next year.
First Virginia branches will begin changing their signs by mid-October, when BB&T; starts its systems-operation conversion.
BB&T; will add First Virginia's banks to its more than 1,100 bank branches in the District, Virginia, Maryland, the Carolinas, West Virginia, Kentucky, Tennessee, Georgia, Florida, Alabama and Indiana.
First Virginia's $11.2 billion in assets is expected to boost BB&T; assets to $91 billion, making it the 11th-largest national financial institution and the second-largest in Virginia, said John Allison, BB&T; chairman and CEO.
Mr. Allison said layoffs are likely, though both companies will work to re-employ or relocate any terminated workers.
"There will be some reduction in staff due to the overlap of the merger," he said, without elaborating. "We hope to handle most of the cuts through turnover. There will be severance and outplacement services for those who can't find jobs in the company."
The merger should go smoothly for First Virginia customers and shareholders, but Collyn Bement-Gilbert, a senior bank analyst with Ryan Beck Co. Inc., a Livingston, N.J., brokerage firm, said she was concerned about First Virginia's plans to close branches and cut staff.
"BB&T; has a long history of conducting these transactions smoothly and seamlessly, with little destruction in the market," said Ms. Gilbert, who rated First Virginia as "outperforming" the market.
First Virginia and BB&T; will close 120 offices and sell 16 to 22 branches as part of the merger's divestiture deal, Mr. Fitzpatrick said. No bank offices are expected to close in the Washington area, though Mr. Fitzpatrick would not specify how many will close overall.
"This will be a joint program between the two banks of consolidating two nearby offices into the one best facility," Mr. Fitzpatrick said. "But we probably won't close any offices in this area because the market has such a large population."
BB&T; shares dipped on the New York Stock Exchange after the announcement to close at $34.44, down $2.93 from $37.37 Friday. First Virginia shares soared $4.59 to $42.34 yesterday.

Sign up for Daily Newsletters

Copyright © 2019 The Washington Times, LLC. Click here for reprint permission.

The Washington Times Comment Policy

The Washington Times welcomes your comments on Spot.im, our third-party provider. Please read our Comment Policy before commenting.


Click to Read More and View Comments

Click to Hide