Press Release

QUARTERLY PERFORMANCE SUMMARY

Tom A. Nicholson

BB&T Corporation (NYSE:BBT)

Executive Vice President

(336) 733-3058

Page 5

Investor Relations

FAX (336) 733-3132

EX-99.1 2 dex991.htm PRESS RELEASE Press Release

Exhibit 99.1

October 14, 2004

FOR IMMEDIATE RELEASE

Contacts:


ANALYSTS		MEDIA
Tom A. Nicholson	Scott E. Reed	Bob Denham
Executive Vice President	Sr. Exec. Vice President	Senior Vice President
Investor Relations	Chief Financial Officer	Public Relations
(336) 733-3058	(336) 733-3088	(910) 914-9073

BB&T reports record net income of $412.9 million

WINSTON-SALEM, N.C. — BB&T Corporation (NYSE: BBT) reported today record third quarter net income totaling $412.9 million, or $.74 per diluted share, compared with $115.9 million, or $.21 per diluted share, earned in the third quarter of 2003. These results reflect increases of 256.3% and 252.4%, respectively, compared to the third quarter last year. Net income and diluted earnings per share for the third quarter of 2003 reflect $248.5 million in after-tax losses resulting from an early extinguishment of debt and $14.8 million in net after-tax merger-related charges.

Operating earnings for the third quarter of 2004 totaled $410.9 million, or $.74 per diluted share, excluding $2.0 million in net after-tax merger-related gains, which were primarily related to sales of facilities. Excluding the effects of merger-related items and nonrecurring charges from both 2004 and 2003, operating earnings and operating diluted earnings per share for the third quarter of 2004 increased 8.3% and 8.8%, respectively, compared with the third quarter of 2003.

BB&T’s third quarter net income produced annualized returns on average assets and average shareholders’ equity of 1.69% and 15.42%, respectively, compared to prior year returns of .51% and 4.50%, respectively.

Cash basis operating results exclude the unamortized balances of intangibles from assets and shareholders’ equity and exclude the amortization of intangibles, the net amortization of purchase accounting mark-to-market adjustments and merger-related items from earnings. Cash basis operating earnings totaled $430.2 million for the third quarter of 2004, an increase of 8.6% compared to the third quarter of 2003. Current quarter cash basis diluted earnings per share increased 8.5% to $.77, compared to $.71 earned during the same period in 2003. Cash basis operating earnings for the third quarter of 2004 produced an annualized return on average tangible assets of 1.85% and an annualized return on average tangible shareholders’ equity of 28.50%.

“I am very pleased to report strong results for the third quarter of 2004,” said Chairman and Chief Executive Officer John A. Allison. “Building on momentum from the second quarter, our results reflect continued improvement in our already excellent asset quality and an increase in our net interest margin. I am also very pleased with our progress in becoming a more efficient company. Our third quarter cash basis efficiency ratio was our strongest in almost three years and reflects the successful integration of past mergers and the implementation of internal cost control initiatives. We also grew our noninterest income generating businesses and are seeing reasonably strong growth in commercial and consumer loans. Given these trends, I remain optimistic about our future performance.”

For the first nine months of 2004, BB&T’s net income was $1.14 billion, an increase of 50.2% compared to $759.9 million earned in the first nine months of 2003. Diluted earnings per share for the first nine months of 2004 totaled $2.05 compared to $1.51 earned in 2003. Excluding $4.5 million in net after-tax merger-related charges from 2004 and $287.1 million in net after-tax merger-related and nonrecurring charges from 2003, operating earnings for the first nine months of 2004 were $1.15 billion, an increase of 9.5% compared to operating earnings in 2003. Operating diluted earnings per share totaled $2.06 for the first nine months of 2004.

Asset Quality Remains Excellent – Improves Further in 3^rd Quarter

BB&T’s asset quality continued to improve during the third quarter and remains very strong compared to the industry. Nonperforming assets, as a percentage of total assets, decreased to .40% at Sept. 30, compared to .42% at June 30 and .49% at Sept. 30, 2003. Annualized net charge-offs were .34% of average loans and leases for the third quarter of 2004, equal to the .34% achieved in the second quarter of 2004 and down from .40% in the third quarter of 2003. These levels of nonperforming assets and quarterly net charge-offs are the lowest experienced by BB&T in more than three years. Excluding losses at BB&T’s specialized lending subsidiaries, annualized net charge-offs for the current quarter were .19% of average loans and leases compared to .24% in the second quarter of 2004 and .30% in the third quarter of 2003.

Average Loans Grow 8.7%

Average loans and leases totaled $66.9 billion for the third quarter of 2004, an increase of 8.7% compared to the third quarter of 2003. Excluding the impact of growth resulting from acquisitions and a $1.0 billion mortgage loan securitization completed during the third quarter, average loan growth was 6.5% compared to the third quarter of 2003. This growth was led by consumer loans, which increased 8.0%, excluding the impact of acquisitions, compared to the third quarter of 2003, and commercial loans, which grew 6.0%, excluding acquisitions, compared to the third quarter last year.

Noninterest Expenses Decline – Reflecting the Integration of Past Mergers

BB&T’s noninterest expenses totaled $716.6 million for the third quarter, a decrease of $34.0 million compared to the second quarter of 2004. Excluding merger-related items and growth resulting from purchase acquisitions, noninterest expenses declined 7.1% compared to the third quarter of 2003. The decline in noninterest expenses resulted in a cash basis operating efficiency ratio of 48.8% for the third quarter of 2004, the lowest level achieved in almost three years.

Growth in Noninterest Income Remains Solid

BB&T’s noninterest income generating businesses continued to show overall growth in the third quarter of 2004 despite a significant decline in income from mortgage banking. Total noninterest income was $538.9 million for the third quarter of 2004, an increase of 5.2% compared with the same period in 2003. Excluding fluctuations in income from mortgage banking and securities gains and losses, noninterest income increased 19.0% compared with last year. The growth was led by increased revenues from insurance operations, service charges on deposit accounts and other nondeposit fees and commissions.

The continued expansion of BB&T’s insurance agency network and brokerage operations through both acquisitions and internal growth resulted in insurance commissions totaling $163.4 million for the third quarter, a 57.7% increase compared with $103.6 million earned during the third quarter of 2003. Revenues from BB&T’s insurance operations were the largest source of noninterest income during the quarter. Excluding the effect of acquisitions, third quarter insurance commissions from BB&T’s agency and brokerage operations increased 6.8% compared to the third quarter of 2003.

Service charges for deposit-related services totaled $135.5 million during the third quarter of 2004, an increase of 11.1% compared to the third quarter of 2003. Excluding the effect of acquisitions, service charges on deposits for the third quarter of 2004 increased 9.8% compared to the third quarter last year.

Other service charges, commissions and fees totaled $82.8 million for the third quarter of 2004, an increase of $9.5 million, or 12.9%, compared to the third quarter of 2003. This increase was generated primarily by growth in bankcard fees, merchant-related services and debit card related services. Excluding the effect of acquisitions, other service charges, commissions and fees increased 11.9% compared to the third quarter last year.

Revenues from mortgage banking operations totaled $28.1 million for the third quarter of 2004, a decrease of $70.2 million compared to $98.3 million for the third quarter last year. Current quarter earnings include a $5.0 million net write-down of the valuation allowance offsetting mortgage servicing rights, as lower mortgage rates have decreased the value of these assets. This is compared to a $69.8 million net recapture recorded in the third quarter of 2003, when rates for mortgages were rising.

Income Taxes

BB&T’s operating provision for income taxes totaled $206.9 million for the third quarter of 2004, an increase of 25.4% compared with the third quarter last year. The increase reflects a rise in BB&T’s effective tax rate, which was 33.5% on an operating basis in the third quarter of 2004.

BB&T also announced today the filing of a lawsuit in the U.S. District Court in Greensboro, N.C. to pursue a refund of $3.3 million in taxes plus interest assessed by the Internal Revenue Service (IRS) related to a leveraged lease transaction entered into by BB&T during 1997. BB&T paid this assessment during 2003 and filed a refund claim which was denied by the IRS in the second quarter of 2004. Management continues to believe that BB&T’s treatment of this transaction was appropriate and in compliance with the tax law and regulations applicable to 1997 and has determined that this action is necessary in order to protect BB&T’s interests.

At Sept. 30, BB&T had $97.9 billion in assets and operated more than 1,400 banking offices in the Carolinas, Virginia, West Virginia, Kentucky, Georgia, Maryland, Tennessee, Florida, Alabama, Indiana and Washington, D.C. BB&T’s common stock is traded on the New York Stock Exchange under the trading symbol BBT. The closing price of BB&T’s common stock on Oct. 13 was $39.49 per share.

For additional information about BB&T’s financial performance, company news, products and services, please visit our Web site at www.BBandT.com.

Earnings Webcast

To hear a live webcast of BB&T’s third quarter 2004 earnings conference call at 10:30 a.m. (EDT) today, please visit our Web site at www.BBandT.com/Investor. Replays of the conference call will be available through our Web site until 5 p.m. (EDT) on Friday, Oct. 29.

This press release contains financial information determined by methods other than in accordance with Generally Accepted Accounting Principles (“GAAP”). BB&T’s management uses these non-GAAP measures in their analysis of the Company’s performance. These measures typically adjust GAAP performance measures to exclude the effects of charges, expenses and gains related to the consummation of mergers and acquisitions, and costs related to the integration of merged entities, as well as the amortization of intangibles and purchase accounting mark-to-market adjustments in the case of “cash basis” performance measures. These non-GAAP measures may also exclude other significant gains, losses or expenses that are unusual in nature and not expected to recur. Since these items and their impact on BB&T’s performance are difficult to predict, management believes presentations of financial measures excluding the impact of these items provide useful supplemental information that is essential to a proper understanding of the operating results of BB&T’s core businesses. These disclosures should not be viewed as a substitute for results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies.

This press release contains forward-looking statements as defined by federal securities laws. These statements may address issues that involve significant risks, uncertainties, estimates and assumptions made by management. Actual results could differ materially from current projections. Please refer to BB&T’s filings with the Securities and Exchange Commission for a summary of important factors that could affect BB&T’s forward-looking statements. BB&T undertakes no obligation to revise these statements following the date of this press release.


	For the Three Months Ended						Increase (Decrease)
(Dollars in thousands, except per share data)	9/30/04			9/30/03			$			%
OPERATING EARNINGS STATEMENTS (1)
Interest income - taxable equivalent	$	1,179,010		$	1,125,056		$	53,954		4.8	%
Interest expense		303,282			292,110			11,172		3.8
Net interest income - taxable equivalent		875,728			832,946			42,782		5.1
Less: Taxable equivalent adjustment		20,072			26,488			(6,416	)	(24.2	)
Net interest income		855,656			806,458			49,198		6.1
Provision for loan and lease losses		57,000			65,000			(8,000	)	(12.3	)
Net interest income after provision for loan and lease losses		798,656			741,458			57,198		7.7
Noninterest income (2)		538,863			512,103			26,760		5.2
Noninterest expense (3)		719,666			709,248			10,418		1.5
Operating earnings before income taxes		617,853			544,313			73,540		13.5
Provision for income taxes		206,933			165,055			41,878		25.4
Operating earnings (1)	$	410,920		$	379,258		$	31,662		8.3	%

PER SHARE DATA BASED ON OPERATING EARNINGS (1)
Basic earnings	$	.74		$	.69		$	.05		7.2	%
Diluted earnings		.74			.68			.06		8.8
Weighted average shares -
Basic		553,944,042			551,018,984
Diluted		558,576,819			555,543,993
Dividends paid per common share	$	.35		$	.32		$	.03		9.4	%

PERFORMANCE RATIOS BASED ON OPERATING EARNINGS (1)
Return on average assets		1.68	%		1.66	%
Return on average equity		15.35			14.73
Net yield on earning assets (taxable equivalent)		4.07			4.17
Efficiency ratio (taxable equivalent) (4)		50.7			53.0

CASH BASIS PERFORMANCE BASED ON OPERATING EARNINGS (1)(5)
Cash basis operating earnings	$	430,155		$	395,987		$	34,168		8.6	%
Diluted earnings per share		.77			.71			.06		8.5
Return on average tangible assets		1.85	%		1.81	%
Return on average tangible equity		28.50			25.62
Efficiency ratio (taxable equivalent) (4)		48.8			51.2


	For the Three Months Ended						Increase (Decrease)
(Dollars in thousands, except per share data)	9/30/04			9/30/03			$			%
INCOME STATEMENTS
Interest income	$	1,158,938		$	1,098,568		$	60,370		5.5	%
Interest expense		303,282			292,110			11,172		3.8
Net interest income		855,656			806,458			49,198		6.1
Provision for loan and lease losses		57,000			65,000			(8,000	)	(12.3	)
Net interest income after provision for loan and lease losses		798,656			741,458			57,198		7.7
Noninterest income		538,863			512,103			26,760		5.2
Noninterest expense		716,607			1,116,966			(400,359	)	(35.8	)
Income before income taxes		620,912			136,595			484,317		354.6
Provision for income taxes		208,027			20,704			187,323		904.8
Net income	$	412,885		$	115,891		$	296,994		256.3	%

PER SHARE DATA
Basic earnings	$	.75		$	.21		$	.54		257.1	%
Diluted earnings		.74			.21			.53		252.4
Weighted average shares -
Basic		553,944,042			551,018,984
Diluted		558,576,819			555,543,993

PERFORMANCE RATIOS BASED ON NET INCOME
Return on average assets		1.69	%		.51	%
Return on average equity		15.42			4.50
Efficiency ratio (taxable equivalent) (4)		50.5			83.7

NOTES: Applicable ratios are annualized.

(1)

Operating earnings exclude the effect of merger-related charges or credits and nonrecurring items. These amounts totaled $(2.0 million) and $263.4 million, net of tax, in the third quarters of 2004 and 2003, respectively. See Reconciliation Tables included herein.

(2)

Excluding purchase accounting transactions, noninterest income would have decreased approximately 5.1% for the quarter, compared to the same period in 2003.

(3)

Excluding purchase accounting transactions, noninterest expense would have decreased approximately 7.1% for the quarter, compared to the same period in 2003.

(4)

Excludes securities gains (losses), foreclosed property expense, provisions for or recaptures of the impairment of mortgage servicing rights, and gains or losses on mortgage banking-related derivatives. Cash basis and operating ratios also exclude merger-related items and nonrecurring charges, where applicable. See Reconciliation Tables included herein.

(5)

Cash basis performance information excludes the effect on earnings of amortization expense applicable to intangible assets, the unamortized balances of intangibles from assets and equity, and the net amortization of purchase accounting mark-to-market adjustments. See Reconciliation Tables included herein.


	For the Nine Months Ended						Increase (Decrease)
(Dollars in thousands, except per share data)	9/30/04			9/30/03			$			%
OPERATING EARNINGS STATEMENTS (1)
Interest income - taxable equivalent	$	3,420,120		$	3,283,644		$	136,476		4.2	%
Interest expense		856,659			996,923			(140,264	)	(14.1	)
Net interest income - taxable equivalent		2,563,461			2,286,721			276,740		12.1
Less: Taxable equivalent adjustment		61,279			84,665			(23,386	)	(27.6	)
Net interest income		2,502,182			2,202,056			300,126		13.6
Provision for loan and lease losses		183,500			189,500			(6,000	)	(3.2	)
Net interest income after provision for loan and lease losses		2,318,682			2,012,556			306,126		15.2
Noninterest income (2)		1,590,696			1,418,120			172,576		12.2
Noninterest expense (3)		2,197,862			1,927,686			270,176		14.0
Operating earnings before income taxes		1,711,516			1,502,990			208,526		13.9
Provision for income taxes		565,495			456,005			109,490		24.0
Operating earnings (1)	$	1,146,021		$	1,046,985		$	99,036		9.5	%

PER SHARE DATA BASED ON OPERATING EARNINGS (1)
Basic earnings	$	2.08		$	2.10		$	(.02	)	(1.0	) %
Diluted earnings		2.06			2.09			(.03	)	(1.4	)
Weighted average shares -
Basic		551,529,609			498,048,765
Diluted		555,547,611			502,026,007
Dividends paid on common shares	$	.99		$	.90		$	.09		10.0	%

PERFORMANCE RATIOS BASED ON OPERATING EARNINGS (1)
Return on average assets		1.60	%		1.67	%
Return on average equity		14.59			16.49
Net yield on earning assets (taxable equivalent)		4.06			4.12
Noninterest income as a percentage of total income (taxable equivalent) (4)		37.9			37.6
Efficiency ratio (taxable equivalent) (4)		52.8			52.2

CASH BASIS PERFORMANCE BASED ON OPERATING EARNINGS (1)(5)
Cash basis operating earnings	$	1,207,586		$	1,071,986		$	135,600		12.6	%
Diluted earnings per share		2.17			2.14			.03		1.4
Return on average tangible assets		1.77	%		1.77	%
Return on average tangible equity		26.96			24.45
Efficiency ratio (taxable equivalent) (4)		50.7			51.2


	For the Nine Months Ended						Increase (Decrease)
(Dollars in thousands, except per share data)	9/30/04			9/30/03			$			%
INCOME STATEMENTS
Interest income	$	3,358,841		$	3,198,979		$	159,862		5.0	%
Interest expense		856,659			996,923			(140,264	)	(14.1	)
Net interest income		2,502,182			2,202,056			300,126		13.6
Provision for loan and lease losses		183,500			189,500			(6,000	)	(3.2	)
Net interest income after provision for loan and lease losses		2,318,682			2,012,556			306,126		15.2
Noninterest income		1,590,696			1,418,120			172,576		12.2
Noninterest expense		2,205,244			2,371,974			(166,730	)	(7.0	)
Income before income taxes		1,704,134			1,058,702			645,432		61.0
Provision for income taxes		562,643			298,826			263,817		88.3
Net income	$	1,141,491		$	759,876		$	381,615		50.2	%

PER SHARE DATA
Basic earnings	$	2.07		$	1.53		$	.54		35.3	%
Diluted earnings		2.05			1.51			.54		35.8
Weighted average shares -
Basic		551,529,609			498,048,765
Diluted		555,547,611			502,026,007

PERFORMANCE RATIOS BASED ON NET INCOME
Return on average assets		1.60	%		1.21	%
Return on average equity		14.53			11.97
Efficiency ratio (taxable equivalent) (4)		53.0			64.4

NOTES: Applicable ratios are annualized.

(1)

Operating earnings exclude the effect of merger-related and nonrecurring charges. These charges totaled $4.5 million and $287.1 million, net of tax, for the first nine months of 2004 and 2003, respectively. See Reconciliation Tables included herein.

(2)

Excluding purchase accounting transactions, noninterest income would have decreased approximately 2.0% for the nine months ended September 30, 2004 compared to 2003.

(3)

Excluding purchase accounting transactions, noninterest expense would have decreased approximately 3.4% for the nine months ended September 30, 2004 compared to 2003.

(4)

(5)


	As of /For the Nine Months Ended				Increase (Decrease)
(Dollars in thousands)	9/30/04		9/30/03		$			%
CONSOLIDATED BALANCE SHEETS
End of period balances
Cash and due from banks	$	1,800,195	$	2,113,640	$	(313,445	)	(14.8	) %
Interest-bearing deposits with banks		286,414		281,439		4,975		1.8
Federal funds sold and other earning assets		256,097		321,986		(65,889	)	(20.5	)
Securities available for sale		18,481,720		16,032,688		2,449,032		15.3
Securities held to maturity		125		57,076		(56,951	)	(99.8	)
Trading securities		445,571		710,387		(264,816	)	(37.3	)

Total securities		18,927,416		16,800,151		2,127,265		12.7

Commercial loans and leases		33,857,536		30,939,186		2,918,350		9.4
Direct retail loans		13,607,244		11,791,148		1,816,096		15.4
Sales finance loans		6,215,235		6,164,851		50,384		.8
Revolving credit loans		1,221,404		1,111,208		110,196		9.9
Mortgage loans		11,891,511		11,166,084		725,427		6.5

Total loans and leases		66,792,930		61,172,477		5,620,453		9.2

Allowance for loan and lease losses		816,588		791,527		25,061		3.2

Total earning assets		86,333,813		78,410,936		7,922,877		10.1

Premises and equipment, net		1,280,612		1,221,089		59,523		4.9
Goodwill		4,096,066		3,642,068		453,998		12.5
Other intangible assets		526,106		422,716		103,390		24.5
Other assets		4,731,149		5,171,092		(439,943	)	(8.5	)

Total assets		97,880,397		90,355,131		7,525,266		8.3

Noninterest-bearing deposits		12,217,201		10,909,953		1,307,248		12.0
Savings and interest checking		4,344,138		4,217,404		126,734		3.0
Money rate savings		22,806,829		20,231,596		2,575,233		12.7
CDs and other time deposits		26,385,428		25,936,345		449,083		1.7

Total deposits		65,753,596		61,295,298		4,458,298		7.3

Short-term borrowed funds		6,464,704		6,294,995		169,709		2.7
Long-term debt		11,145,504		9,837,910		1,307,594		13.3

Total interest-bearing liabilities		71,146,603		66,518,250		4,628,353		7.0

Other liabilities		3,721,712		2,712,096		1,009,616		37.2

Total liabilities		87,085,516		80,140,299		6,945,217		8.7

Total shareholders’ equity	$	10,794,881	$	10,214,832	$	580,049		5.7	%

Average balances
Securities, at amortized cost	$	17,996,054	$	17,098,464	$	897,590		5.2	%
Commercial loans and leases		32,694,998		29,665,696		3,029,302		10.2
Direct retail loans		12,942,017		10,208,466		2,733,551		26.8
Sales finance loans		6,223,531		4,427,999		1,795,532		40.5
Revolving credit loans		1,188,091		1,060,626		127,465		12.0
Mortgage loans		12,609,810		11,202,241		1,407,569		12.6

Total loans and leases		65,658,447		56,565,028		9,093,419		16.1

Allowance for loan and lease losses		808,864		747,833		61,031		8.2
Other earning assets		606,932		534,210		72,722		13.6

Total earning assets		84,261,433		74,197,702		10,063,731		13.6

Total assets		95,515,331		83,713,853		11,801,478		14.1

Noninterest-bearing deposits		11,429,899		9,024,764		2,405,135		26.7
Savings and interest checking		4,807,832		3,729,360		1,078,472		28.9
Money rate savings		21,559,799		17,565,056		3,994,743		22.7
CDs and other time deposits		26,468,662		25,173,205		1,295,457		5.1

Total deposits		64,266,192		55,492,385		8,773,807		15.8

Short-term borrowed funds		6,770,711		4,849,076		1,921,635		39.6
Long-term debt		10,683,588		12,308,015		(1,624,427	)	(13.2	)

Total interest-bearing liabilities		70,290,592		63,624,712		6,665,880		10.5

Total shareholders’ equity	$	10,492,415	$	8,489,258	$	2,003,157		23.6	%


	As of / For the Quarter Ended
(Dollars in thousands)	9/30/04			6/30/04			3/31/04		12/31/03		9/30/03
MISCELLANEOUS INFORMATION (1)

Unrealized appreciation (depreciation) on securities available for sale, net of tax	$	(48,057	)	$	(228,129	)	$	145,119	$	11,450	$	98,196
Derivatives (notional value)		17,346,172			19,980,873			20,219,582		14,608,690		9,625,035
Fair value of derivatives portfolio		116,599			23,345			214,865		136,025		184,467
Common stock prices:
High		40.46			37.91			38.80		39.69		38.19
Low		36.38			33.02			34.48		35.98		33.72
End of period		39.69			36.97			35.30		38.64		35.91
Weighted average shares -
Basic		553,944,042			554,041,770			546,576,484		544,871,908		551,018,984
Diluted		558,576,819			557,485,680			550,547,045		549,858,403		555,543,993
End of period shares outstanding		552,488,008			555,337,965			548,022,164		541,942,987		548,886,598
End of period banking offices		1,416			1,420			1,353		1,359		1,456
ATMs		1,927			1,911			1,848		1,880		1,948

NOTES: All items referring to loans and leases include loans held for sale and are net of unearned income.

(1)

BB&T had approximately 26,200 full-time equivalent employees at September 30, 2004.


	As of / For the Quarter Ended
(Dollars in thousands, except per share data)	9/30/04			6/30/04			3/31/04			12/31/03			9/30/03
OPERATING EARNINGS STATEMENTS (1)

Interest income - taxable equivalent

Interest and fees on loans and leases	$	990,783		$	952,389		$	919,030		$	925,614		$	931,997
Interest and dividends on securities		185,284			185,476			179,639			186,210			191,261
Interest on short-term investments		2,943			2,067			2,509			2,316			1,798
Total interest income - taxable equivalent		1,179,010			1,139,932			1,101,178			1,114,140			1,125,056

Interest expense

Interest on deposits		181,790			172,689			166,777			171,380			184,168
Interest on short-term borrowed funds		25,948			17,968			17,395			15,033			14,651
Interest on long-term debt		95,544			89,094			89,454			89,451			93,291
Total interest expense		303,282			279,751			273,626			275,864			292,110

Net interest income - taxable equivalent		875,728			860,181			827,552			838,276			832,946

Less: Taxable equivalent adjustment		20,072			20,478			20,729			26,600			26,488

Net interest income		855,656			839,703			806,823			811,676			806,458

Provision for loan and lease losses		57,000			64,000			62,500			58,500			65,000

Net interest income after provision for loan and lease losses		798,656			775,703			744,323			753,176			741,458

Noninterest income

Service charges on deposits		135,521			131,445			122,763			122,120			121,981
Mortgage banking income		28,095			67,535			7,110			45,628			98,330
Investment banking and brokerage fees and commissions		59,834			63,624			76,598			68,667			65,805
Trust revenue		28,862			31,519			29,985			29,099			31,871
Insurance commissions		163,359			164,712			123,706			102,070			103,592
Other nondeposit fees and commissions		82,774			79,465			71,634			73,618			73,312
Securities gains (losses), net		6,590			2			(511	)		(7,529	)		(9,994	)
Other noninterest income		33,828			35,353			46,893			37,342			27,206

Total noninterest income		538,863			573,655			478,178			471,015			512,103

Noninterest expense

Personnel expense		411,033			433,866			422,966			374,788			412,350
Occupancy and equipment expense		104,469			103,428			100,147			100,463			97,352
Foreclosed property expense		6,309			7,085			6,002			6,556			5,163
Amortization of intangibles		24,280			28,670			24,056			21,100			20,990
Other noninterest expense		173,575			176,811			175,165			179,778			173,393

Total noninterest expense		719,666			749,860			728,336			682,685			709,248

Operating earnings before income taxes		617,853			599,498			494,165			541,506			544,313
Provision for income taxes		206,933			199,041			159,521			164,657			165,055

Operating earnings (1)	$	410,920		$	400,457		$	334,644		$	376,849		$	379,258

PER SHARE DATA BASED ON
OPERATING EARNINGS (1)

Basic earnings	$	.74		$	.72		$	.61		$	.69		$	.69
Diluted earnings		.74			.72			.61			.69			.68
Dividends paid per common share		.35			.32			.32			.32			.32
Book value per share		19.54			18.95			19.03			18.33			18.61
Tangible book value per share (2)		11.17			10.56			11.01			10.92			11.20

PERFORMANCE RATIOS BASED ON
OPERATING EARNINGS (1)

Return on average assets		1.68	%		1.66	%		1.46	%		1.66	%		1.66	%
Return on average equity		15.35			15.18			13.17			14.80			14.73
Net yield on earning assets (taxable equivalent)		4.07			4.02			4.09			4.22			4.17
Efficiency ratio (taxable equivalent) (3)		50.7			52.8			55.1			52.7			53.0
Noninterest income as a percentage of total income (taxable equivalent) (3)		37.7			38.8			36.9			34.7			37.3
Equity as a percentage of total assets at end of period		11.0			10.8			11.1			11.0			11.3
Average earning assets as a percentage of average total assets		88.4			88.2			88.1			87.9			87.6
Average loans and leases as a percentage of average deposits		102.5			101.3			102.7			100.7			99.4

CASH BASIS PERFORMANCE BASED ON
OPERATING EARNINGS (1) (4)

Cash basis operating earnings	$	430,155		$	422,466		$	354,965		$	393,646		$	395,987
Diluted earnings per share		.77			.76			.64			.72			.71
Return on average tangible assets		1.85	%		1.83	%		1.62	%		1.81	%		1.81	%
Return on average tangible equity		28.50			28.41			23.93			25.84			25.62
Efficiency ratio (taxable equivalent) (3)		48.8			50.5			52.9			50.8			51.2

NOTES: Applicable ratios are annualized.

(1)

Operating earnings exclude the effect of merger-related charges or credits and nonrecurring items. These amounts totaled $(2.0 million), $351 thousand, $6.1 million, $71.8 million, and $263.4 million, net of tax, for the quarters ended September 30, 2004, June 30, 2004, March 31, 2004, December 31, 2003 and September 30, 2003, respectively. See Reconciliation Tables included herein.

(2)

Excludes the carrying value of goodwill and other intangible assets from shareholders’ equity.

(3)

Excludes securities gains (losses), foreclosed property expense, provisions for or recaptures of the impairment of mortgage servicing rights, gains or losses on mortgage banking-related derivatives, merger-related charges and nonrecurring charges, where applicable. See Reconciliation Tables included herein.

(4)

Cash basis operating performance information excludes the effect on earnings of amortization expense applicable to intangible assets, the unamortized balances of intangibles from assets and equity, and the net amortization of purchase accounting mark-to-market adjustments. See Reconciliation Tables included herein.


	As of / For the Quarter Ended
(Dollars in thousands, except per share data)	9/30/04			6/30/04			3/31/04			12/31/03			9/30/03
INCOME STATEMENTS
Interest income
Interest and fees on loans and leases	$	983,904		$	945,561		$	912,156		$	982,319		$	920,451
Interest and dividends on securities		172,091			171,826			165,784			171,178			176,319
Interest on short-term investments		2,943			2,067			2,509			2,316			1,798
Total interest income		1,158,938			1,119,454			1,080,449			1,155,813			1,098,568

Interest expense

Interest on deposits		181,790			172,689			166,777			171,380			184,168
Interest on short-term borrowed funds		25,948			17,968			17,395			15,033			14,651
Interest on long-term debt		95,544			89,094			89,454			89,451			93,291
Total interest expense		303,282			279,751			273,626			275,864			292,110

Net interest income		855,656			839,703			806,823			879,949			806,458

Provision for loan and lease losses		57,000			64,000			62,500			58,500			65,000

Net interest income after provision for loan and lease losses		798,656			775,703			744,323			821,449			741,458

Noninterest income

Service charges on deposits		135,521			131,445			122,763			122,120			121,981
Mortgage banking income		28,095			67,535			7,110			45,628			98,330
Investment banking and brokerage fees and commissions		59,834			63,624			76,598			68,667			65,805
Trust revenue		28,862			31,519			29,985			29,099			31,871
Insurance commissions		163,359			164,712			123,706			102,070			103,592
Other nondeposit fees and commissions		82,774			79,465			71,634			73,618			73,312
Securities gains (losses), net		6,590			2			(511	)		(7,529	)		(9,994	)
Other noninterest income		33,828			35,353			46,893			37,342			27,206

Total noninterest income		538,863			573,655			478,178			471,015			512,103

Noninterest expense

Personnel expense		411,033			433,866			422,966			374,788			412,350
Occupancy and equipment expense		104,469			103,428			100,147			100,463			97,352
Foreclosed property expense		6,309			7,085			6,002			6,556			5,163
Amortization of intangibles		24,280			28,670			24,056			21,100			20,990
Merger-related and restructuring charges (gains)		(3,059	)		791			9,650			51,451			22,820
Loss on early extinguishment of debt		—			—			—			—			384,898
Other noninterest expense		173,575			176,811			175,165			179,778			173,393

Total noninterest expense		716,607			750,651			737,986			734,136			1,116,966

Income before income taxes		620,912			598,707			484,515			558,328			136,595
Provision for income taxes		208,027			198,601			156,015			253,301			20,704

Net income	$	412,885		$	400,106		$	328,500		$	305,027		$	115,891


PER SHARE DATA

Basic earnings	$	.75		$	.72		$	.60		$	.56		$	.21
Diluted earnings		.74			.72			.60			.55			.21

	For the Quarter Ended
	9/30/04			6/30/04			3/31/04			12/31/03			9/30/03
ANNUALIZED INTEREST YIELDS / RATES (1)

Interest income:

Securities and other earning assets:
U.S. Government securities and other earning assets		3.75	%		3.83	%		3.91	%		4.12	%		4.07	%
Mortgage-backed securities		4.42			4.19			4.91			5.03			5.05
State and municipal securities		6.45			6.58			6.46			6.30			6.28
Trading securities		3.94			1.89			1.45			3.70			2.28

Total securities and other earning assets		3.96			3.96			4.07			4.30			4.28

Loans:
Commercial loans and leases		5.40			5.22			5.31			5.42			5.44
Consumer loans		6.90			6.65			6.77			6.83			7.08
Mortgage loans		5.57			5.55			5.72			5.98			5.82

Total loans		5.90			5.72			5.84			5.96			6.02

Total earning assets		5.47			5.33			5.45			5.60			5.62

Interest expense:

Interest-bearing deposits:

Savings and interest checking		.22			.20			.21			.24			.27
Money rate savings		.75			.64			.61			.63			.65
CDs and other time deposits		2.09			1.98			2.07			2.11			2.23

Total interest-bearing deposits		1.36			1.28			1.32			1.35			1.44

Short-term borrowed funds		1.47			1.08			1.06			.98			.99
Long-term debt		3.54			3.36			3.38			3.55			3.60

Total interest-bearing liabilities		1.70			1.57			1.62			1.65			1.73

Net yield on earning assets		4.07	%		4.02	%		4.09	%		4.22	%		4.17	%

NOTES: (1) Fully taxable equivalent yields. Excludes nonrecurring items. Securities yields calculated based on amortized cost.


	As of / For the Quarter Ended
(Dollars in thousands)	9/30/04			6/30/04			3/31/04			12/31/03			9/30/03
SELECTED BALANCE SHEET DATA

End of period balances

Securities available for sale	$	18,481,720		$	17,477,628		$	17,584,687		$	15,562,954		$	16,032,688
Securities held to maturity		125			125			125			60,122			57,076
Trading securities		445,571			388,998			364,481			693,819			710,387

Total securities		18,927,416			17,866,751			17,949,293			16,316,895			16,800,151

Commercial loans and leases		33,857,536			33,397,400			31,743,612			31,335,752			30,939,186
Direct retail loans		13,607,244			13,314,629			12,447,494			12,130,101			11,791,148
Sales finance loans		6,215,235			6,288,337			6,190,940			6,035,662			6,164,851
Revolving credit loans		1,221,404			1,204,479			1,167,467			1,180,480			1,111,208
Mortgage loans		11,891,511			12,831,806			12,821,573			11,623,391			11,166,084

Total loans and leases		66,792,930			67,036,651			64,371,086			62,305,386			61,172,477

Allowance for loan and lease losses		816,588			816,330			790,271			784,937			791,527
Other earning assets		542,511			490,738			510,292			604,006			603,425
Total earning assets		86,333,813			85,745,148			82,607,385			79,208,578			78,410,936

Total assets		97,880,397			97,348,285			94,281,503			90,466,613			90,355,131

Noninterest-bearing deposits		12,217,201			12,017,270			11,500,136			11,098,251			10,909,953
Savings and interest checking		4,344,138			4,506,042			4,379,735			4,307,069			4,217,404
Money rate savings		22,806,829			22,428,015			20,569,144			20,348,969			20,231,596
CDs and other time deposits		26,385,428			27,711,563			27,675,877			23,595,496			25,936,345

Total deposits		65,753,596			66,662,890			64,124,892			59,349,785			61,295,298

Short-term borrowed funds		6,464,704			6,232,126			5,748,572			7,334,900			6,294,995
Long-term debt		11,145,504			10,524,646			10,625,382			10,807,700			9,837,910

Total interest-bearing liabilities		71,146,603			71,402,392			68,998,710			66,394,134			66,518,250

Total shareholders’ equity		10,794,881			10,524,713			10,426,828			9,934,731			10,214,832

Goodwill		4,096,066			4,076,888			3,837,956			3,616,526			3,642,068
Core deposit and other intangibles		526,106			586,199			552,527			401,944			422,716

Total intangibles		4,622,172			4,663,087			4,390,483			4,018,470			4,064,784

Mortgage servicing rights	$	340,535		$	371,118		$	256,341		$	334,931		$	327,377

Average balances

Securities, at amortized cost	$	18,416,752		$	18,378,505		$	17,188,281		$	16,937,451		$	17,423,216

Commercial loans and leases		33,529,888			33,085,067			31,460,865			30,919,252			30,746,686
Direct retail loans		13,456,234			13,094,968			12,269,198			11,931,318			11,597,522
Sales finance loans		6,252,329			6,252,607			6,165,341			6,278,763			6,285,902
Revolving credit loans		1,210,728			1,184,780			1,168,516			1,136,268			1,098,690
Mortgage loans		12,429,128			13,246,064			12,156,224			11,425,458			11,790,843

Total loans and leases		66,878,307			66,863,486			63,220,144			61,691,059			61,519,643

Allowance for loan and lease losses		821,050			818,852			786,556			794,394			792,914
Other earning assets		569,256			554,295			697,659			590,519			633,744

Total earning assets		85,864,315			85,796,286			81,106,084			79,219,029			79,576,603

Total assets		97,129,491			97,286,405			92,112,359			90,116,726			90,845,816

Noninterest-bearing deposits		11,876,112			11,663,685			10,744,997			10,967,480			11,023,396
Savings and interest checking		4,813,519			5,034,541			4,575,373			4,425,717			4,497,102
Money rate savings		22,636,090			21,801,020			20,230,460			20,162,364			20,018,836
CDs and other time deposits		25,920,707			27,497,580			25,993,720			25,712,445			26,350,439

Total deposits		65,246,428			65,996,826			61,544,550			61,268,006			61,889,773

Short-term borrowed funds		7,029,258			6,682,835			6,597,199			6,006,630			5,763,994
Long-term debt		10,759,965			10,668,414			10,621,546			9,936,570			10,205,592

Total interest-bearing liabilities		71,159,539			71,684,390			68,018,298			66,243,726			66,835,963

Total shareholders’ equity	$	10,648,868		$	10,608,131		$	10,218,527		$	10,099,916		$	10,215,142

SELECTED CAPITAL INFORMATION (1)
Risk-based capital:
Tier 1	$	6,579,668		$	6,459,729		$	6,218,081		$	6,166,160		$	6,274,986
Total		9,884,833			8,497,373			8,270,138			8,211,674			8,683,707
Risk-weighted assets		70,716,926			70,349,535			67,264,355			65,511,840			65,442,593
Average quarterly tangible assets		92,913,443			92,923,669			87,835,595			86,157,150			86,828,988
Risk-based capital ratios:
Tier 1		9.3	%		9.2	%		9.2	%		9.4	%		9.6	%
Total		14.0			12.1			12.3			12.5			13.3
Leverage capital ratio		7.1			7.0			7.1			7.2			7.2

Equity as a percentage of total assets		11.0			10.8			11.1			11.0			11.3

Book value per share	$	19.54		$	18.95		$	19.03		$	18.33		$	18.61
Tangible book value per share (2)		11.17			10.56			11.01			10.92			11.20

NOTES: All items referring to loans and leases include loans held for sale and are net of unearned income.

(1)

Current quarter risk-based capital information is preliminary.

(2)

Excludes the carrying value of goodwill and other intangible assets from shareholders’ equity.


	As of / For the Quarter Ended
(Dollars in thousands)	9/30/04			6/30/04			3/31/04			12/31/03			9/30/03
ASSET QUALITY ANALYSIS

Allowance For Loan and Lease Losses
Beginning balance	$	816,330		$	790,271		$	784,937		$	791,527		$	719,576
Allowance for acquired (sold) loans, net		(170	)		19,284			—			—			68,768
Provision for loan and lease losses		57,000			64,000			62,500			58,500			65,000
Charge-offs
Commercial loans and leases		(23,858	)		(23,740	)		(22,176	)		(38,577	)		(27,194	)
Direct retail loans		(12,170	)		(11,538	)		(11,295	)		(12,395	)		(10,340	)
Sales finance loans		(22,225	)		(21,664	)		(22,518	)		(21,856	)		(23,309	)
Revolving credit loans		(12,383	)		(12,531	)		(14,286	)		(12,279	)		(12,387	)
Mortgage loans		(1,207	)		(1,916	)		(1,375	)		(1,733	)		(1,523	)

Total charge-offs		(71,843	)		(71,389	)		(71,650	)		(86,840	)		(74,753	)

Recoveries
Commercial loans and leases		6,210			4,216			6,057			13,703			4,102
Direct retail loans		2,090			2,675			2,489			2,442			3,269
Sales finance loans		4,317			4,165			3,511			3,279			3,305
Revolving credit loans		2,555			2,557			2,178			2,205			2,155
Mortgage loans		99			551			249			121			105

Total recoveries		15,271			14,164			14,484			21,750			12,936

Net charge-offs		(56,572	)		(57,225	)		(57,166	)		(65,090	)		(61,817	)

Ending balance	$	816,588		$	816,330		$	790,271		$	784,937		$	791,527

Nonperforming Assets
Nonaccrual loans and leases:
Commercial loans and leases	$	173,303		$	199,718		$	218,111		$	219,558		$	226,655
Direct retail loans		48,792			50,968			52,426			50,085			47,618
Sales finance loans		15,484			13,152			12,062			13,082			14,182
Revolving credit loans		374			369			367			342			354
Mortgage loans		62,871			61,132			62,756			67,373			66,611

Total nonaccrual loans and leases		300,824			325,339			345,722			350,440			355,420

Foreclosed real estate		67,329			68,035			74,832			78,964			70,178
Other foreclosed property		20,821			18,995			21,247			17,106			20,902
Restructured loans		563			566			573			592			613

Nonperforming assets	$	389,537		$	412,935		$	442,374		$	447,102		$	447,113

Loans 90 days or more past due and still accruing:
Commercial loans and leases	$	11,463		$	11,180		$	18,885		$	17,759		$	34,965
Direct retail loans		22,382			21,015			20,359			25,695			24,019
Sales finance loans		20,766			20,732			26,091			27,863			18,379
Revolving credit loans		4,797			4,116			4,644			5,601			4,626
Mortgage loans		40,397			38,698			33,917			39,840			39,918

Total loans 90 days or more past due and still accruing		99,805			95,741			103,896			116,758			121,907

Loans 90 days or more past due and still accruing as a percentage of total loans and leases		.15	%		.14	%		.16	%		.19	%		.20	%

Asset Quality Ratios
Nonaccrual and restructured loans and leases as a percentage of total loans and leases		.45	%		.49	%		.54	%		.56	%		.58	%
Nonperforming assets as a percentage of:
Total assets		.40			.42			.47			.49			.49
Loans and leases plus foreclosed property		.58			.62			.69			.72			.73
Net charge-offs as a percentage of average loans and leases		.34			.34			.36			.42			.40
Net charge-offs excluding specialized lending as a percentage of average loans and leases (1)		.19			.24			.25			.31			.30
Allowance for loan and lease losses as a percentage of loans and leases		1.22			1.22			1.23			1.26			1.29
Allowance for loan and lease losses as a percentage of loans and leases held for investment		1.23			1.23			1.25			1.27			1.32
Ratio of allowance for loan and lease losses to:
Net charge-offs		3.63	x		3.55	x		3.44	x		3.04	x		3.23	x
Nonaccrual and restructured loans and leases		2.71			2.50			2.28			2.24			2.22

NOTES: All items referring to loans and leases include loans held for sale and are net of unearned income. Applicable ratios are annualized.

(1)

Excludes net charge-offs and average loans from BB&T’s specialized lending subsidiaries.


	As of / For the Nine Months Ended						Increase (Decrease)
	9/30/04			9/30/03			$			%
Allowance For Loan and Lease Losses
Beginning balance	$	784,937		$	723,685		$	61,252		8.5	%
Allowance for acquired (sold) loans, net		19,114			70,035			(50,921	)	NM
Reclassification of allowance related to unfunded commitments		—			(8,986	)		8,986		NM
Provision for loan and lease losses		183,500			189,500			(6,000	)	(3.2	)
Charge-offs
Commercial loans and leases		(69,774	)		(84,065	)		14,291		(17.0	)
Direct retail loans		(35,003	)		(32,953	)		(2,050	)	6.2
Sales finance loans		(66,407	)		(70,293	)		3,886		(5.5	)
Revolving credit loans		(39,200	)		(37,765	)		(1,435	)	3.8
Mortgage loans		(4,498	)		(3,359	)		(1,139	)	33.9

Total charge-offs		(214,882	)		(228,435	)		13,553		(5.9	)

Recoveries
Commercial loans and leases		16,483			21,139			(4,656	)	(22.0	)
Direct retail loans		7,254			9,359			(2,105	)	(22.5	)
Sales finance loans		11,993			8,646			3,347		38.7
Revolving credit loans		7,290			6,215			1,075		17.3
Mortgage loans		899			369			530		143.6

Total recoveries		43,919			45,728			(1,809	)	(4.0	)

Net charge-offs		(170,963	)		(182,707	)		11,744		6.4

Ending balance	$	816,588		$	791,527		$	25,061		3.2	%

Asset Quality Ratios
Net charge-offs as a percentage of average loans and leases		.35	%		.43	%
Net charge-offs excluding specialized lending as a percentage of average loans and leases (1)		.23			.32
Ratio of allowance for loan and lease losses to net charge-offs		3.58x			3.24 x


	Percentage Increase (Decrease)
	QTD 3Q04 vs. 3Q03		Annualized Link QTD 3Q04 vs. 2Q04		YTD 2004 vs. 2003
PERCENTAGE CHANGES IN SELECTED BALANCES ADJUSTED FOR PURCHASE ACQUISITIONS (2)
Average Balances
Commercial loans and leases	6.0	%	5.3	%	4.7	%
Direct retail loans	12.2		11.0		10.9
Sales finance loans	(0.5	)	—		(1.0	)
Revolving credit loans	10.1		8.7		9.7
Mortgage loans (3)	5.6		(12.1	)	10.2
Total loans and leases	6.5		2.5		6.4
Noninterest-bearing deposits	6.5		7.2		8.6
Interest-bearing transaction accounts	6.2		(3.1	)	7.8
CDs and other time deposits	(3.5	)	(22.8	)	(2.2	)
Other deposits	10.3		16.1		7.2
Total deposits	3.2	%	(4.5	) %	3.4	%

PERCENTAGE CHANGES IN SELECTED INCOME STATEMENT ITEMS BASED ON OPERATING EARNINGS ADJUSTED FOR PURCHASE ACQUISITIONS (2)
Net interest income - taxable equivalent	2.7	%	7.0	%	0.6	%
Noninterest income
Service charges on deposits	9.8		12.3		9.7
Mortgage banking income	(71.8	)	NM		(19.3	)
Investment banking and brokerage fees and commissions	(9.1	)	(23.7	)	11.3
Trust revenue	(11.0	)	(38.1	)	(1.8	)
Insurance commissions	5.4		(11.5	)	8.0
Other nondeposit fees and commissions	11.9		16.6		11.0
Securities gains (losses), net	NM		NM		NM
Other income	23.0		(20.3	)	16.7
Total noninterest income	(5.1	)	(26.8	)	(2.0	)
Noninterest expense
Personnel expense	(8.6	)	(22.9	)	(4.2	)
Occupancy and equipment expense	(0.3	)	3.2		(1.3	)
Other noninterest expense	(7.3	)	(18.9	)	(2.7	)
Total noninterest expense	(7.1	) %	(18.2	) %	(3.4	) %

NOTES: All items referring to loans and leases include loans held for sale and are net of unearned income. Applicable ratios are annualized.

(1)

Excludes net charge-offs and average loans from BB&T’s specialized lending subsidiaries.

(2)

Adjusted to exclude estimated growth that resulted from the timing of acquisitions during 2004 and 2003.

(3)

Excludes the average impact of $1.0 billion in mortgage loans securitized in the third quarter of 2004.

NM - not meaningful.


	As of / For the Quarter Ended
(Dollars in thousands)	9/30/04			6/30/04			3/31/04			12/31/03			9/30/03
SELECTED MORTGAGE BANKING INFORMATION
Residential Mortgage Servicing Rights (4):
Ending balance	$	440,327		$	441,506		$	419,937		$	463,876		$	486,842
Less: valuation allowance		(112,944	)		(85,085	)		(178,424	)		(143,727	)		(172,649	)
Net balance		327,383			356,421			241,513			320,149			314,193

Mortgage Servicing Rights Valuation Allowance:
Beginning balance	$	85,085		$	178,424		$	143,727		$	172,649		$	364,035
Provisions for impairment		40,185			—			43,590			—			—
Recaptures		—			(91,867	)		—			(20,420	)		(88,910	)
Other-than-temporary impairment		(12,326	)		(1,472	)		(8,893	)		(8,502	)		(102,476	)
Ending balance		112,944			85,085			178,424			143,727			172,649

Residential Mortgage Loan Originations	$	2,125,721		$	3,165,695		$	2,299,118		$	2,283,680		$	5,887,089

Residential Mortgage Servicing Portfolio:
Loans serviced for others	$	25,707,237		$	24,662,645		$	24,034,974		$	25,015,348		$	25,251,299
Bank owned loans serviced		11,891,511			12,831,806			12,821,573			11,623,391			11,166,084
Total servicing portfolio		37,598,748			37,494,451			36,856,547			36,638,739			36,417,383
Weighted Average Coupon Rate		5.84	%		5.85	%		5.94	%		5.98	%		6.01	%
Weighted Average Servicing Fee		.346			.350			.349			.351			.352

	For the Quarter Ended
(Dollars in thousands, except per share data)	9/30/04			6/30/04			3/31/04			12/31/03			9/30/03
RECONCILIATION TABLE
Net income	$	412,885		$	400,106		$	328,500		$	305,027		$	115,891
Merger-related items, net of tax		(1,965	)		351			6,144			30,176			14,829
Other, net of tax (3)		—			—			—			41,646			248,538
Operating earnings		410,920			400,457			334,644			376,849			379,258
Amortization of intangibles, net of tax		15,358			18,135			15,215			12,871			12,804
Amortization of mark-to-market adjustments, net of tax		3,877			3,874			5,106			3,926			3,925
Cash basis operating earnings		430,155			422,466			354,965			393,646			395,987

Return on average assets		1.69	%		1.65	%		1.43	%		1.34	%		.51	%
Effect of merger-related charges, net of tax		(.01	)		.01			.03			.13			.06
Effect of other, net of tax (3)		—			—			—			.19			1.09
Operating return on average assets		1.68	%		1.66			1.46			1.66			1.66
Effect of amortization of intangibles, net of tax (2)		.15			.16			.14			.13			.13
Effect of amortization of mark-to-market adjustments, net of tax		.02			.01			.02			.02			.02
Cash basis operating return on average tangible assets		1.85			1.83			1.62			1.81			1.81

Return on average equity		15.42	%		15.17	%		12.93	%		11.98	%		4.50	%
Effect of merger-related charges, net of tax		(.07	)		.01			.24			1.19			.58
Effect of other, net of tax (3)		—			—			—			1.63			9.65
Operating return on average equity		15.35			15.18			13.17			14.80			14.73
Effect of amortization of intangibles, net of tax (2)		12.89			12.97			10.42			10.89			10.64
Effect of amortization of mark-to-market adjustments, net of tax		.26			.26			.34			.15			.25
Cash basis operating return on average tangible equity		28.50			28.41			23.93			25.84			25.62

Efficiency ratio (taxable equivalent) (1)		50.5	%		52.9	%		55.8	%		59.7	%		83.7	%
Effect of merger-related charges		.2			(.1	)		(.7	)		(4.0	)		(1.7	)
Effect of other (3)		—			—			—			(3.0	)		(29.0	)
Operating efficiency ratio (1)		50.7			52.8			55.1			52.7			53.0
Effect of amortization of intangibles		(1.7	)		(2.0	)		(1.9	)		(1.6	)		(1.6	)
Effect of amortization of mark-to-market adjustments		(.2	)		(.3	)		(.3	)		(.3	)		(.2	)
Cash basis operating efficiency ratio (1)		48.8			50.5			52.9			50.8			51.2

Fee income ratio (1)		37.7	%		38.8	%		36.9	%		36.5	%		37.3	%
Effect of other (3)		—			—			—			(1.8	)		—
Operating fee income ratio (1)		37.7			38.8			36.9			34.7			37.3

Basic earnings per share	$	.75		$	.72		$	.60		$	.56		$	.21
Effect of merger-related charges, net of tax		(.01	)		—			.01			.06			.03
Effect of other, net of tax (3)		—			—			—			.07			.45
Operating basic earnings per share		.74			.72			.61			.69			.69

Diluted earnings per share	$	.74		$	.72		$	.60		$	.55		$	.21
Effect of merger-related charges, net of tax		—			—			.01			.05			.03
Effect of other, net of tax (3)		—			—			—			.09			.44
Operating diluted earnings per share		.74			.72			.61			.69			.68
Effect of amortization of intangibles, net of tax		.02			.03			.02			.02			.02
Effect of amortization of mark-to-market adjustments, net of tax		.01			.01			.01			.01			.01
Cash basis operating diluted earnings per share		.77			.76			.64			.72			.71

Net yield on earning assets (taxable equivalent)		4.07	%		4.02	%		4.09	%		3.89	%		4.17	%
Effect of other, net of tax (3)		—			—			—			.33			—
Operating net yield on earning assets		4.07			4.02			4.09			4.22			4.17

NOTES: Applicable ratios are annualized.

(1)

Excludes securities gains (losses), foreclosed property expense, provisions for or recaptures of the impairment of mortgage servicing rights, and gains or losses on mortgage banking-related derivatives. Operating and cash basis ratios also exclude merger-related items and nonrecurring charges, where applicable.

(2)

Reflects the effect of excluding average intangible assets from average assets and average equity to calculate cash basis ratios.

(3)

Reflects a loss on early extinguishment of debt totaling $248.5 million in the third quarter of 2003 and a one-time charge related to deferred income taxes associated with BB&T’s leasing operations totaling $41.6 million in the fourth quarter of 2003.

(4)

Balances exclude commercial mortgage servicing rights totaling $13.2 million, $14.7 million, $14.8 million, $14.8 million and $13.2 million, as of September 30, 2004, June 30, 2004, March 31, 2004, December 31, 2003 and September 30, 2003, respectively.


	For the Nine Months Ended
(Dollars in thousands, except per share data)	9/30/04			9/30/03
RECONCILIATION TABLE
Net income	$	1,141,491		$	759,876
Merger-related charges, net of tax		4,530			24,878
Other, net of tax (3)		—			262,231
Operating earnings		1,146,021			1,046,985
Amortization of intangibles, net of tax		48,707			21,076
Amortization of mark-to-market adjustments, net of tax		12,858			3,925
Cash basis operating earnings		1,207,586			1,071,986

Return on average assets		1.60	%		1.21	%
Effect of merger-related charges, net of tax		—			.04
Effect of other, net of tax (3)		—			.42
Operating return on average assets		1.60			1.67
Effect of amortization of intangibles, net of tax (2)		.15			.09
Effect of amortization of mark-to-market adjustments, net of tax		.02			.01
Cash basis operating return on average tangible assets		1.77			1.77

Return on average equity		14.53	%		11.97	%
Effect of merger-related charges, net of tax		.06			.39
Effect of other, net of tax (3)		—			4.13
Operating return on average equity		14.59			16.49
Effect of amortization of intangibles, net of tax (2)		12.08			7.87
Effect of amortization of mark-to-market adjustments, net of tax		.29			.09
Cash basis operating return on average tangible equity		26.96			24.45

Efficiency ratio (taxable equivalent) (1)		53.0	%		64.4	%
Effect of merger-related charges		(.2	)		(1.1	)
Effect of other (3)		—			(11.1	)
Operating efficiency ratio (1)		52.8			52.2
Effect of amortization of intangibles		(1.9	)		(.9	)
Effect of amortization of mark-to-market adjustments		(.2	)		(.1	)
Cash basis operating efficiency ratio (1)		50.7			51.2

Basic earnings per share	$	2.07		$	1.53
Effect of merger-related charges, net of tax		.01			.05
Effect of other, net of tax (3)		—			.52
Operating basic earnings per share		2.08			2.10

Diluted earnings per share	$	2.05		$	1.51
Effect of merger-related charges, net of tax		.01			.05
Effect of other, net of tax (3)		—			.53
Operating diluted earnings per share		2.06			2.09
Effect of amortization of intangibles, net of tax		.09			.04
Effect of amortization of mark-to-market adjustments, net of tax		.02			.01
Cash basis operating diluted earnings per share		2.17			2.14

NOTES: Applicable ratios are annualized.

(1)

Excludes securities gains (losses), foreclosed property expense, provisions for or recaptures of the impairment of mortgage servicing rights, and gains or losses on mortgage banking-related derivatives. Operating and cash basis ratios also exclude merger-related and nonrecurring charges, where applicable.

(2)

Reflects the effect of excluding average intangible assets from average assets and average equity to calculate cash basis ratios.

(3)

Reflects nonrecurring contributions made by an affiliated trust totaling $13.7 million and a loss on early extinguishment of debt totaling $248.5 million in 2003.