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                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549

                               ----------------

                                   FORM 10-Q

                               ----------------

               Quarterly Report Pursuant to Section 13 or 15(d)
                    of the Securities Exchange Act of 1934

                        For the quarterly period ended:

                                March 31, 2001

                        Commission file number: 1-10853

                               BB&T CORPORATION
            (Exact name of registrant as specified in its charter)


                                            
               North Carolina                                    56-0939887
          (State of Incorporation)                  (I.R.S. Employer Identification No.)



                                            
            200 West Third Street
        Winston-Salem, North Carolina                              27101
  (Address of Principal Executive Offices)                       (Zip Code)


                                (336) 733-2000
             (Registrant's Telephone Number, Including Area Code)

                               ----------------

  Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes [X] No [_]

  At April 30, 2001, 407,251,781 shares of the registrant's common stock, $5
par value, were outstanding.

       This Form 10-Q has 30 pages. The Exhibit Index begins on page 26.

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                                BB&T CORPORATION

                                   FORM 10-Q

                                 March 31, 2001

                                     INDEX



                                                                       Page No.
                                                                       --------
                                                                    
Part I. FINANCIAL INFORMATION

  Item 1. Financial Statements (Unaudited)............................     2

      Consolidated Financial Statements...............................     2

      Notes to Consolidated Financial Statements......................     6

  Item 2. Management's Discussion and Analysis of Financial Condition
          and Results of Operations...................................    13

      Analysis of Financial Condition.................................    13

      Market Risk Management..........................................    17

      Capital Adequacy and Resources..................................    19

      Analysis of Results of Operations...............................    20

  Item 3. Quantitative and Qualitative Disclosures About Market Risk..    17

Part II. OTHER INFORMATION

  Item 1. Legal Proceedings...........................................    26

  Item 6. Exhibits and Reports on Form 8-K............................    26

SIGNATURES............................................................    30


                                       1


                         Part I. FINANCIAL INFORMATION

Item 1. Financial Statements

                       BB&T CORPORATION AND SUBSIDIARIES

                          CONSOLIDATED BALANCE SHEETS
                 (Dollars in thousands, except per share data)



                                                      March 31,    December 31,
                                                         2001          2000
                                                     ------------  ------------
                                                     (unaudited)
                                                             
Assets
 Cash and due from banks...........................  $  1,387,598  $  1,508,396
 Interest-bearing deposits with banks..............        71,905        52,529
 Federal funds sold and securities purchased under
  resale agreements or similar arrangements........       174,980       261,156
 Trading securities at market value................       187,218        96,719
 Securities available for sale at market value.....    14,261,958    14,220,870
 Securities held to maturity at amortized cost
  (approximate market values of $35,853 at March
  31, 2001, and $69,727 at December 31, 2000)......        35,952        69,274
 Loans held for sale...............................     1,272,136       846,830
 Loans and leases, net of unearned income..........    41,274,942    40,447,069
 Allowance for loan and lease losses...............      (555,532)     (532,203)
                                                     ------------  ------------
  Loans and leases, net............................    40,719,410    39,914,866
                                                     ------------  ------------
 Premises and equipment, net.......................       827,067       801,833
 Other assets......................................     3,182,080     3,157,845
                                                     ------------  ------------
  Total assets.....................................  $ 62,120,304  $ 60,930,318
                                                     ============  ============
Liabilities and Shareholders' Equity
 Deposits:
  Noninterest-bearing deposits.....................  $  5,191,963  $  5,312,128
  Savings and interest checking....................     2,135,908     2,301,042
  Money rate savings...............................    11,908,702    11,318,362
  Other time deposits..............................    19,809,227    20,244,866
                                                     ------------  ------------
  Total deposits...................................    39,045,800    39,176,398
                                                     ------------  ------------
 Short-term borrowed funds.........................     5,737,235     7,012,313
 Long-term debt....................................    10,912,207     8,625,074
 Accounts payable and other liabilities............     1,378,181     1,240,443
                                                     ------------  ------------
  Total liabilities................................    57,073,423    56,054,228
                                                     ------------  ------------
 Shareholders' equity:
  Preferred stock, $5 par, 5,000,000 shares
   authorized, none issued and outstanding.........            --            --
  Common stock, $5 par, 1,000,000,000 shares
   authorized; 409,668,557 issued and outstanding
   at March 31, 2001, and 410,352,471 at December
   31, 2000........................................     2,048,343     2,051,762
  Additional paid-in capital.......................       349,493       426,154
  Retained earnings................................     2,429,660     2,305,902
  Unvested restricted stock........................        (5,737)       (7,071)
  Accumulated other nonshareholder changes in
   equity, net of deferred income taxes of $148,554
   at March 31, 2001 and $69,129 at December 31,
   2000............................................       225,122        99,343
                                                     ------------  ------------
  Total shareholders' equity.......................     5,046,881     4,876,090
                                                     ------------  ------------
  Total liabilities and shareholders' equity.......  $ 62,120,304  $ 60,930,318
                                                     ============  ============


  The accompanying notes are an integral part of these consolidated financial
                                  statements.

                                       2


                       BB&T CORPORATION AND SUBSIDIARIES

                       CONSOLIDATED STATEMENTS OF INCOME
                                  (Unaudited)



                                                      For the Three Months
                                                         Ended March 31,
                                                    -------------------------
                                                        2001         2000
                                                    ------------ ------------
                                                     (Dollars in thousands,
                                                     except per share data)
                                                           
Interest Income
 Interest and fees on loans and leases............. $    919,255 $    830,309
 Interest and dividends on securities..............      236,617      209,920
 Interest on short-term investments................        4,492        5,912
                                                    ------------ ------------
  Total interest income............................    1,160,364    1,046,141
                                                    ------------ ------------
Interest Expense
 Interest on deposits..............................      403,219      339,796
 Interest on short-term borrowed funds.............       86,562      100,174
 Interest on long-term debt........................      147,997       90,997
                                                    ------------ ------------
  Total interest expense...........................      637,778      530,967
                                                    ------------ ------------
Net Interest Income................................      522,586      515,174
 Provision for loan and lease losses...............       38,850       26,767
                                                    ------------ ------------
Net Interest Income After Provision for Loan and
 Lease Losses......................................      483,736      488,407
                                                    ------------ ------------
Noninterest Income
 Service charges on deposit accounts...............       73,419       61,801
 Investment banking and brokerage fees and
  commissions......................................       43,202       45,711
 Mortgage banking income...........................        5,224       27,369
 Trust income......................................       24,143       18,746
 Agency insurance commissions......................       39,458       31,531
 Other insurance commissions.......................        2,634        3,189
 Other nondeposit fees and commissions.............       40,967       32,918
 Securities gains (losses), net....................       71,972         (104)
 Other income......................................       14,574       18,411
                                                    ------------ ------------
  Total noninterest income.........................      315,593      239,572
                                                    ------------ ------------
Noninterest Expense
 Personnel expense.................................      258,177      237,007
 Occupancy and equipment expense...................       75,314       69,111
 Amortization of intangibles.......................       17,019       15,569
 Other noninterest expense.........................      139,582      126,999
                                                    ------------ ------------
  Total noninterest expense........................      490,092      448,686
                                                    ------------ ------------
Earnings
 Income before income taxes........................      309,237      279,293
 Provision for income taxes........................       90,876       89,458
                                                    ------------ ------------
  Net income....................................... $    218,361 $    189,835
                                                    ============ ============
Per Common Share
 Net income:
  Basic............................................ $        .53 $        .47
                                                    ============ ============
  Diluted.......................................... $        .53 $        .46
                                                    ============ ============
 Cash dividends paid by BB&T Corporation........... $        .23 $        .20
                                                    ============ ============
Average Shares Outstanding
 Basic.............................................  409,201,404  407,978,573
                                                    ============ ============
 Diluted...........................................  415,546,150  412,608,438
                                                    ============ ============


  The accompanying notes are an integral part of these consolidated financial
                                  statements.

                                       3


                       BB&T CORPORATION AND SUBSIDIARIES

           CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
               For the Three Months Ended March 31, 2001 and 2000
                                  (Unaudited)
                             (Dollars in thousands)



                                                                            Accumulated
                                                                Retained       Other
                           Shares of               Additional   Earnings   Nonshareholder     Total
                            Common       Common     Paid-In       and        Changes in   Shareholders'
                             Stock       Stock      Capital      Other*        Equity        Equity
                          -----------  ----------  ----------  ----------  -------------- -------------
                                                                        
Balance, December 31,
 1999,
 as restated............  407,386,925  $2,036,935  $ 402,379   $2,032,532    $(318,462)    $4,153,384
Add (Deduct)
 Nonshareholder changes
  in equity:**
 Net income.............           --          --         --      189,835           --        189,835
  Unrealized holding
   gains (losses)
   arising during the
   period...............           --          --         --           --      (22,190)       (22,190)
  Less: reclassification
   adjustment, net of
   tax of ($36).........           --          --         --           --          (68)           (68)
                          -----------  ----------  ---------   ----------    ---------     ----------
 Net unrealized gains
  (losses) on
  securities............           --          --         --           --      (22,258)       (22,258)
                          -----------  ----------  ---------   ----------    ---------     ----------
 Total nonshareholder
  changes in equity.....           --          --         --      189,835      (22,258)       167,577
                          -----------  ----------  ---------   ----------    ---------     ----------
 Common stock issued....      902,074       4,510      9,154           --           --         13,664
 Cash dividends declared
  on common stock.......           --          --         --      (79,871)          --        (79,871)
 Other..................           --          --         --       (1,214)          --         (1,214)
                          -----------  ----------  ---------   ----------    ---------     ----------
Balance, March 31,
 2000...................  408,288,999  $2,041,445  $ 411,533   $2,141,282    $(340,720)    $4,253,540
                          ===========  ==========  =========   ==========    =========     ==========
Balance, December 31,
 2000,
 as restated............  410,352,471  $2,051,762  $ 426,154   $2,298,831    $  99,343     $4,876,090
Add (Deduct)
 Nonshareholder changes
  in equity:**
 Net income.............           --          --         --      218,361           --        218,361
  Unrealized holding
   gains (losses)
   arising during the
   period...............           --          --         --           --       88,270         88,270
  Less: reclassification
   adjustment, net of
   tax of $25,190.......           --          --         --           --       46,782         46,782
                          -----------  ----------  ---------   ----------    ---------     ----------
 Net unrealized gains
  (losses) on
  securities............           --          --         --           --      135,052        135,052
                          -----------  ----------  ---------   ----------    ---------     ----------
 Unrecognized loss on
  cash flow hedge, net
  of tax of $6,050......           --          --         --           --       (9,273)        (9,273)
                          -----------  ----------  ---------   ----------    ---------     ----------
 Total nonshareholder
  changes in equity.....           --          --         --      218,361      125,779        344,140
                          -----------  ----------  ---------   ----------    ---------     ----------
 Common stock issued....    5,077,386      25,387    100,320           --           --        125,707
 Redemption of common
  stock.................   (5,761,300)    (28,806)  (182,154)          --           --       (210,960)
 Cash dividends declared
  on common stock.......           --          --         --      (94,603)          --        (94,603)
 Other..................           --          --      5,173        1,334           --          6,507
                          -----------  ----------  ---------   ----------    ---------     ----------
Balance, March 31,
 2001...................  409,668,557  $2,048,343  $ 349,493   $2,423,923    $ 225,122     $5,046,881
                          ===========  ==========  =========   ==========    =========     ==========

--------
 * Other includes unearned income and unvested restricted stock.
** Comprehensive income as defined by SFAS No. 130.

  The accompanying notes are an integral part of these consolidated financial
                                  statements.

                                       4


                       BB&T CORPORATION AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF CASH FLOWS
               For the Three Months Ended March 31, 2001 and 2000
                                  (Unaudited)



                                                         2001         2000
                                                      -----------  -----------
                                                      (Dollars in thousands)
                                                             
Cash Flows From Operating Activities:
 Net income.......................................... $   218,361  $   189,835
 Adjustments to reconcile net income to net cash
  provided by operating activities:
 Provision for loan and lease losses.................      38,850       26,767
 Depreciation of premises and equipment..............      29,440       22,753
 Amortization of intangibles and mortgage servicing
  rights.............................................      25,020       19,894
 Accretion of negative goodwill......................      (1,560)      (1,561)
 Amortization of unearned stock compensation.........      (7,939)       1,287
 Discount accretion and premium amortization on
  securities, net....................................      (1,018)        (922)
 Net decrease (increase) in trading account
  securities.........................................     (90,499)     (11,191)
 Loss (gain) on sales of securities, net.............     (71,972)         104
 Loss (gain) on sales of loans and mortgage loan
  servicing rights, net..............................     (11,941)      (2,865)
 Loss (gain) on disposals of premises and equipment,
  net................................................      (3,336)       3,360
 Proceeds from sales of loans held for sale..........   1,191,790      514,514
 Purchases of loans held for sale....................    (459,004)    (130,000)
 Origination of loans held for sale, net of
  principal collected................................  (1,146,151)    (298,691)
 Decrease (increase) in:
  Accrued interest receivable........................       1,709      (14,996)
  Other assets.......................................      57,368     (339,195)
 Increase (decrease) in:
  Accrued interest payable...........................      19,852           31
  Accounts payable and other liabilities.............     (27,837)      35,242
 Other, net..........................................         731          (56)
                                                      -----------  -----------
   Net cash (used in) provided by operating
    activities.......................................    (238,136)      14,310
                                                      -----------  -----------
Cash Flows From Investing Activities:
 Proceeds from sales of securities available for
  sale...............................................     300,270       70,214
 Proceeds from maturities, calls and paydowns of
  securities available for sale......................     291,892      548,509
 Purchases of securities available for sale..........    (234,403)    (668,856)
 Proceeds from maturities, calls and paydowns of
  securities held to maturity........................       1,100       21,647
 Purchases of securities held to maturity............      (2,213)      (4,147)
 Leases made to customers............................     (32,537)     (29,255)
 Principal collected on leases.......................      25,686       21,066
 Loan originations, net of principal collected.......    (346,492)  (1,061,243)
 Purchases of loans..................................     (14,740)     (76,574)
 Net cash acquired in transactions accounted for
  under the purchase method..........................      32,527          194
 Purchases and originations of mortgage servicing
  rights.............................................     (42,267)      (4,775)
 Proceeds from disposals of premises and equipment...       5,756       18,689
 Purchases of premises and equipment.................     (50,130)     (33,365)
 Proceeds from sales of foreclosed property..........      10,285        5,128
 Proceeds from sales of other real estate held for
  development or sale................................       1,645        3,171
                                                      -----------  -----------
   Net cash used in investing activities.............     (53,621)  (1,189,597)
                                                      -----------  -----------
Cash Flows From Financing Activities:
 Net increase (decrease) in deposits.................    (566,738)     771,188
 Net increase (decrease) in short-term borrowed
  funds..............................................  (1,275,078)    (460,638)
 Proceeds from long-term debt........................   2,574,870    2,283,794
 Repayments of long-term debt........................    (341,061)  (1,609,546)
 Net proceeds from common stock issued...............      17,634        7,021
 Redemption of common stock..........................    (210,960)         --
 Cash dividends paid on common stock.................     (94,603)     (79,871)
 Other, net..........................................          95         (430)
                                                      -----------  -----------
   Net cash provided by financing activities.........     104,159      911,518
                                                      -----------  -----------
Net Decrease in Cash and Cash Equivalents............    (187,598)    (263,769)
Cash and Cash Equivalents at Beginning of Period.....   1,822,081    2,057,252
                                                      -----------  -----------
Cash and Cash Equivalents at End of Period........... $ 1,634,483  $ 1,793,483
                                                      ===========  ===========
Supplemental Disclosure of Cash Flow Information:
 Cash paid during the period for:
 Interest............................................ $   533,999  $   514,818
 Income taxes........................................      (9,595)      13,219
 Noncash financing and investing activities:
 Transfer of securities held to maturity to
  available for sale.................................      34,435          --
 Transfer of loans to foreclosed property............      16,880        7,294
 Transfer of fixed assets to other real estate
  owned..............................................       1,368           81
 Tax benefit from exercise of stock options..........       5,172          --


  The accompanying notes are an integral part of these consolidated financial
                                  statements.

                                       5


                       BB&T CORPORATION AND SUBSIDIARIES

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                March 31, 2001
                                  (Unaudited)

A. Basis of Presentation

  In the opinion of management, the accompanying unaudited consolidated
financial statements contain all adjustments necessary to present fairly the
consolidated balance sheets of BB&T Corporation and subsidiaries (referred to
herein as "BB&T", "the Corporation" or "the Company") as of March 31, 2001 and
December 31, 2000; the consolidated statements of income for the three months
ended March 31, 2001 and 2000; the consolidated statements of changes in
shareholders' equity for the three months ended March 31, 2001 and 2000; and
the consolidated statements of cash flows for the three months ended March 31,
2001 and 2000.

  The consolidated financial statements and notes are presented in accordance
with the instructions for Form 10-Q. The information contained in the
footnotes included in BB&T's 2000 Annual Report on Form 10-K, as restated in
BB&T's Current Report on Form 8-K filed on April 27, 2001, should be referred
to in connection with the reading of these unaudited interim consolidated
financial statements. In certain instances, amounts reported in the 2000
financial statements have been reclassified to conform to the 2001 statement
presentation. Such reclassifications had no effect on shareholders' equity or
net income.

Use of Estimates

  The preparation of financial statements requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.

Forward-Looking Statements

  This report contains forward-looking statements with respect to the
financial condition, results of operations and business of BB&T. These
forward-looking statements involve risks and uncertainties and are based on
the beliefs and assumptions of the management of BB&T, and on the information
available to management at the time that these disclosures were prepared.
Factors that may cause actual results to differ materially from those
contemplated by such forward-looking statements include, among others, the
following possibilities: (1) competitive pressures among depository and other
financial institutions may increase significantly; (2) changes in the interest
rate environment may reduce margins; (3) general economic conditions, either
nationally or regionally, may be less favorable than expected, resulting in,
among other things, a deterioration in credit quality and/or a reduced demand
for credit; (4) legislative or regulatory changes, including changes in
accounting standards, may adversely affect the businesses in which BB&T is
engaged; (5) costs or difficulties related to the integration of the
businesses of BB&T and its merger partners may be greater than expected; (6)
expected cost savings associated with pending mergers may not be fully
realized or realized within the expected time frame; (7) deposit attrition,
customer loss or revenue loss following pending mergers may be greater than
expected; (8) competitors may have greater financial resources and develop
products that enable such competitors to compete more successfully than BB&T;
and (9) adverse changes may occur in the securities markets.

B. Nature of Operations

  BB&T Corporation ("BB&T" or "the Corporation") is a financial holding
company headquartered in Winston-Salem, North Carolina. BB&T conducts its
operations through its subsidiaries primarily in North Carolina, South
Carolina, Virginia, Maryland, Georgia, West Virginia, Tennessee, Kentucky and
Washington, D.C. BB&T's principal banking subsidiaries, Branch Banking and
Trust Company ("BB&T-NC"), Branch Banking and Trust Company of South Carolina
("BB&T-SC") and Branch Banking and Trust Company of

                                       6


Virginia ("BB&T-VA"), provide a wide range of traditional banking services to
individuals and commercial customers. BB&T is also the parent company for nine
subsidiary banks acquired through mergers with Hardwick Holding Company, First
Banking Company of Southeast Georgia, BankFirst Corporation and FirstSpartan
Financial Corp. These banks are expected to be merged with and into BB&T-NC,
BB&T-SC or BB&T-VA based on their states of operation. Substantially all of
BB&T's loans are to individuals residing in the market areas described above
or to businesses that are located in this geographic area. Subsidiaries of
BB&T's commercial banking units offer lease financing to commercial businesses
and municipal governments, investment services, (including discount brokerage
services, annuities, mutual funds and government and municipal bonds), life
insurance and property and casualty insurance on an agency basis and insurance
premium financing. Direct nonbank subsidiaries of BB&T provide a variety of
financial services including automobile lending, equipment financing,
factoring, full-service securities brokerage, investment banking and corporate
finance services.

C. New Accounting Pronouncements

  The Company adopted Statement of Financial Accounting Standards No. 133
("SFAS No. 133"), "Accounting for Derivative Instruments and Hedging
Activities," on January 1, 2001. SFAS No. 133 established accounting and
reporting standards that require every derivative instrument (including
certain derivative instruments embedded in other contracts) be recorded in the
balance sheet as either an asset or liability measured at its fair value. SFAS
No. 133 requires that changes in a derivative's fair value be recognized
currently in earnings unless specific hedge accounting criteria are met.
Special accounting for qualifying hedges allows a derivative's gains and
losses to offset related results on the hedged item in the income statement,
and requires that a company must formally document, designate and assess the
effectiveness of transactions that receive hedge accounting. In conjunction
with the adoption of SFAS No. 133, BB&T recorded a transition adjustment of
$7.9 million, after taxes, to accumulated other nonshareholder changes in
equity on January 1, 2001. There was no material impact on net income at the
date of adoption. Substantially all of the transition adjustment will be
reversed into net income during 2001.

  The notional amount of derivative financial instruments held by BB&T at
March 31, 2001, was $2.7 billion with unrealized net losses of $13.2 million,
compared to a total notional value of $2.2 billion with unrealized net losses
of $12.3 million at December 31, 2000. The transition adjustment and first
quarter 2001 impact of the statement are based on the interpretive guidance
issued thus far by the Financial Accounting Standards Board ("FASB"). However,
the FASB continues to issue guidance that could affect BB&T's application of
the statement and require adjustments to the transition amount or amounts and
disclosures in the consolidated financial statements. See "Derivative
Financial Instruments" herein for additional disclosures related to the
adoption of SFAS No. 133.

  In September 2000, the FASB issued SFAS No. 140, "Accounting for Transfers
and Servicing of Financial Assets and Extinguishments of Liabilities," which
replaces SFAS No. 125. SFAS No. 140 revises the standards for accounting for
securitizations and other transfers of financial assets and collateral and
requires certain disclosures, but it carries over most of SFAS No. 125's
provisions without reconsideration. The statements provide accounting and
reporting standards for such transactions based on consistent application of a
financial components approach that focuses on control. Under this approach,
after a transfer of financial assets, an entity recognizes the financial and
servicing assets it controls and the liabilities it has incurred, derecognizes
financial assets when control has been surrendered, and derecognizes
liabilities when extinguished. Certain portions of the statement became
effective for transactions occurring after March 31, 2001. The adoption of
these provisions did not have a material impact on BB&T's consolidated
financial position or consolidated results of operations.


                                       7


D. Mergers and Acquisitions

  The following table presents summary information with respect to mergers and
acquisitions completed by BB&T Corporation during 2000 and thus far during
2001:

                 SUMMARY OF COMPLETED MERGERS AND ACQUISITIONS
                             (Dollars in millions)



                                                                                                                BB&T Common
                                                                                                                   Shares
                                                                                                     Goodwill    Issued to
      Date of                                                 Total      Accounting    Goodwill    Amortization   Complete
    Acquisition      Acquired Company    Headquarters        Assets        Method      Recorded       Period    Transaction
    -----------      ----------------    ------------        ------      ----------    --------    ------------ -----------
                                                                                           
   March 2, 2001     FirstSpartan                        $ 591.0 million  Purchase  $ 42.0 million   15 years
                      Financial Corp.  Spartanburg, SC                                                           3.8 million
  January 8, 2001    FCNB Corp.        Frederick, MD         1.6 billion  Pooling              N/A        N/A    8.7 million
----------------------------------------------------------------------------------------------------------------------------
 December 27, 2000   BankFirst                           $ 929.5 million  Purchase  $ 71.0 million   15 years
                      Corporation      Knoxville, TN                                                             5.3 million
 November 15, 2000   Edgar M. Norris                         3.7 million  Purchase             N/A        N/A
                      & Co.            Greenville, SC                                                                    N/A
 September 29, 2000  Laureate Capital                       13.8 million  Purchase             N/A        N/A
                      Corp.            Charlotte, NC                                                                     N/A
    July 6, 2000     One Valley                              6.4 billion  Pooling              N/A        N/A
                      Bancorp, Inc.    Charleston, W.Va.                                                        43.1 million
   June 15, 2000     First Banking
                      Company of
                      Southeast
                      Georgia          Statesboro, Ga.     420.0 million  Pooling              N/A        N/A    4.1 million
   June 13, 2000     Hardwick Holding                      507.2 million  Pooling              N/A        N/A
                      Company          Dalton, Ga.                                                               3.9 million
  January 13, 2000   Premier                                 2.0 billion  Pooling              N/A        N/A
                      Bancshares,
                      Inc.             Atlanta, Ga.                                                             16.8 million
----------------------------------------------------------------------------------------------------------------------------


  N/A--Not applicable or terms not disclosed.

  The table above does not include mergers and acquisitions of acquired
companies prior to their acquisition by BB&T or insurance agency acquisitions,
which are summarized below.

During the four months ended April 30, 2001, BB&T acquired two insurance
agencies that were accounted for as purchases. In conjunction with these two
transactions, BB&T issued approximately 229,000 shares of common stock and
recorded $7.7 million in goodwill, which is being amortized using the
straight-line method over 15 years. BB&T acquired six insurance agencies
during 2000, which were accounted for as purchases. In conjunction with these
2000 transactions, BB&T issued 1.4 million shares of common stock and recorded
$38.9 million in goodwill, which is being amortized using the straight-line
method over 15 years.

  BB&T typically provides an allocation period, not to exceed one year, to
identify and quantify the assets acquired and liabilities assumed in business
combinations accounted for as purchases. Management currently does not
anticipate any material adjustments to the assigned values of the assets and
liabilities of acquired companies.

Pending Mergers and Acquisitions

  On December 5, 2000, BB&T announced plans to merge with Century South Banks
Inc. ("Century South") of Alpharetta, Georgia. Century South has $1.6 billion
in assets and operates 40 banking offices in Georgia, North Carolina,
Tennessee, and Alabama. Shareholders of Century South will receive .93 shares
of BB&T common stock in exchange for each share of Century South common stock
held. The transaction, which is expected to be accounted for as a pooling of
interests, is planned for completion in the second quarter of 2001.

  On January 24, 2001, BB&T announced plans to acquire Virginia Capital
Bancshares Inc. ("VCAP") of Fredericksburg, Virginia. VCAP has $532.7 million
in assets and operates four banking offices in the Washington-Baltimore
combined metropolitan statistical area. Shareholders of VCAP will receive
between .4958 and .6060 shares of BB&T common stock for each share of VCAP
owned. The exact exchange ratio will be determined based on BB&T's closing
market prices during a pricing period prior to the VCAP shareholders' meeting
to vote on the proposed merger. The transaction, which is expected to be
accounted for as a purchase, is planned for completion in the second quarter
of 2001.


                                       8


  On January 24, 2001, BB&T announced plans to merge with F&M National
Corporation ("F&M") of Winchester, Virginia. F&M has $4 billion in assets and
operates 163 banking offices, 13 mortgage banking offices, three trust offices
and six insurance agencies. Shareholders of F&M will receive 1.09 shares of
BB&T common stock in exchange for each share of F&M common stock held. The
transaction, which is expected to be accounted for as a pooling of interests,
is planned for completion in the third quarter of 2001.

E. Calculation of Earnings Per Common Share

  BB&T's basic and diluted earnings per common share amounts were calculated
as follows:

                       BB&T CORPORATION AND SUBSIDIARIES

                       COMPUTATION OF EARNINGS PER SHARE
                         For the Periods as Indicated



                                                         For the Three Months
                                                            Ended March 31,
                                                        -----------------------
                                                           2001        2000
                                                        ----------- -----------
                                                        (Dollars in thousands,
                                                        except per share data)
                                                              
Basic Earnings Per Share:
 Weighted average number of common shares outstanding
  during the period.................................... 409,201,404 407,978,573
                                                        =========== ===========
 Net income............................................ $   218,361 $   189,835
                                                        =========== ===========
 Basic earnings per share.............................. $       .53 $       .47
                                                        =========== ===========
Diluted Earnings Per Share:
 Weighted average number of common shares.............. 409,201,404 407,978,573
 Add:
  Dilutive effect of outstanding options (as determined
   by application of treasury stock method)............   6,344,746   4,629,865
                                                        ----------- -----------
 Weighted average number of common shares, as
  adjusted............................................. 415,546,150 412,608,438
                                                        =========== ===========
 Net income............................................ $   218,361 $   189,835
                                                        =========== ===========
 Diluted earnings per share............................ $       .53 $       .46
                                                        =========== ===========


F. Segment Disclosures

  BB&T's operations are divided into six reportable business segments: the
Banking Network, Mortgage Banking, Trust Services, Agency Insurance,
Investment Banking and Brokerage, and Treasury. These operating segments have
been identified based primarily on BB&T's existing organizational structure.
The segments require unique technology and marketing strategies and offer
different products and services. While BB&T is managed as an integrated
organization, individual executive managers are held accountable for the
operations of the business segments that report to them.

  BB&T's strategies for revenue growth are focused on developing and expanding
client relationships through quality service delivery and an effective sales
culture. The segment results presented herein are based on internal management
accounting policies that are designed to support these strategic objectives.
Unlike financial accounting, there is no comprehensive authoritative body of
guidance for management accounting equivalent to generally accepted accounting
principles. Therefore, the performance of the individual segments is not
comparable with BB&T's consolidated results or with similar information
presented by any other financial institution. Additionally, because of the
interrelationships of the various segments, the information presented is not
necessarily indicative of the segments' financial performance if they operated
as independent entities.


                                       9


  Please refer to BB&T's Annual Report on Form 10-K, as restated in BB&T's
Current Report on Form 8-K, filed on April 27, 2001, for a description of
internal accounting policies and the basis of segmentation, including a
description of the segments presented in the accompanying tables. There have
been no significant changes from the methods used to develop the segment
disclosures contained therein.

                                      10


  The following tables disclose selected financial information for BB&T's
reportable business segments for the periods as indicated:

                               BB&T Corporation

                              Reportable Segments
              For the Three Months Ended March 31, 2001 and 2000



                                                                                                           Investment
                                                                                           Agency          Banking and
                        Banking Network       Mortgage Banking      Trust Services       Insurance          Brokerage
                    ----------------------- ----------------------  ----------------  ----------------  -----------------
                       2001        2000        2001        2000      2001     2000      2001    2000      2001     2000
                    ----------- ----------- ----------  ----------  -------  -------  -------- -------  -------- --------
                                                                                            (Dollars in thousands)
                                                                                   
 Net interest
 income (expense)
 from external
 customers........  $   317,092 $   356,564 $  146,715  $  109,093  $(9,921) $(9,500) $     24 $    (9) $  2,372 $  3,048
 Net intersegment
 interest income
 (expense)........      147,115      94,131   (112,949)    (73,808)  12,893   12,557        --      --        --       --
                    ----------- ----------- ----------  ----------  -------  -------  -------- -------  -------- --------
  Net interest
  income..........      464,207     450,695     33,766      35,285    2,972    3,057        24      (9)    2,372    3,048
                    ----------- ----------- ----------  ----------  -------  -------  -------- -------  -------- --------
 Provision for
 loan and lease
 losses...........       38,188      30,303        700         705       --       --        --      --        --       --
 Noninterest
 income from
 external
 customers........      109,421     118,691      4,434      28,720   24,573   19,556    38,291  30,433    42,934   44,483
 Intersegment
 noninterest
 income...........       38,415      24,865         --          --       --       --        --      --        --       --
 Noninterest
 expense..........      198,670     237,282     18,683      21,453   15,348   12,777    30,136  21,646    42,223   43,751
 Intersegment
 noninterest
 expense..........      114,670      73,186      6,817       5,697      775      943     1,057   1,024       381      374
                    ----------- ----------- ----------  ----------  -------  -------  -------- -------  -------- --------
 Income before
 income taxes.....      260,515     253,480     12,000      36,150   11,422    8,893     7,122   7,754     2,702    3,406
  Provision for
  income taxes....       67,515      81,700      4,059      12,228    2,200    3,015     2,846   3,069     1,048    1,571
                    ----------- ----------- ----------  ----------  -------  -------  -------- -------  -------- --------
 Net income.......  $   193,000 $   171,780 $    7,941  $   23,922  $ 9,222  $ 5,878  $  4,276 $ 4,685  $  1,654 $  1,835
                    =========== =========== ==========  ==========  =======  =======  ======== =======  ======== ========
 Identifiable
 segment assets...  $32,728,147 $34,565,140 $8,729,592  $5,593,540  $41,955  $29,366  $102,188 $76,228  $689,467 $663,419
                    =========== =========== ==========  ==========  =======  =======  ======== =======  ======== ========

                                                  All Other
                           Treasury              Segments (1)          Total Segments
                    ----------------------- ---------------------- -----------------------
                       2001        2000        2001       2000        2001        2000
                    ----------- ----------- ---------- ----------- ----------- -----------
                                                             
 Net interest
 income (expense)
 from external
 customers........  $    33,041 $    25,728 $   70,959 $    37,045 $   560,282 $   521,969
 Net intersegment
 interest income
 (expense)........       13,032      14,595         --          --      60,091      47,475
                    ----------- ----------- ---------- ----------- ----------- -----------
  Net interest
  income..........       46,073      40,323     70,959      37,045     620,373     569,444
                    ----------- ----------- ---------- ----------- ----------- -----------
 Provision for
 loan and lease
 losses...........           33          30     12,616       5,789      51,537      36,827
 Noninterest
 income from
 external
 customers........        6,399       6,126     40,416       8,827     266,468     256,836
 Intersegment
 noninterest
 income...........           --          --         --          --      38,415      24,865
 Noninterest
 expense..........        1,770         755     28,096      16,581     334,926     354,245
 Intersegment
 noninterest
 expense..........          486         138      2,850         676     127,036      82,038
                    ----------- ----------- ---------- ----------- ----------- -----------
 Income before
 income taxes.....       50,183      45,526     67,813      22,826     411,757     378,035
  Provision for
  income taxes....       10,414       7,598     10,098       7,480      98,180     116,661
                    ----------- ----------- ---------- ----------- ----------- -----------
 Net income.......  $    39,769 $    37,928 $   57,715 $    15,346 $   313,577 $   261,374
                    =========== =========== ========== =========== =========== ===========
 Identifiable
 segment assets...  $17,852,945 $12,925,200 $4,077,507 $ 1,288,737 $64,221,801 $55,141,630
                    =========== =========== ========== =========== =========== ===========

----
(1) Financial data from segments below the quantitative thresholds requiring
    disclosure are attributable to nonbank consumer finance operations,
    factoring, commercial lawn care equipment financing, leasing and other
    smaller subsidiaries.

                                       11


  The following table presents a reconciliation of total segment results to
consolidated results:



                                                   For the Three Months Ended
                                                           March 31,
                                                   ----------------------------
                                                       2001           2000
                                                   -------------  -------------
                                                            
Net Interest Income
 Net interest income from segments................ $     620,373  $    569,444
 Other net interest income(1).....................        36,091        20,849
 Elimination of net intersegment interest
  income(2).......................................      (133,878)      (75,119)
                                                   -------------  ------------
  Consolidated net interest income................ $     522,586  $    515,174
                                                   =============  ============
Net income
 Net income from segments......................... $     313,577  $    261,374
 Other net income (loss)(1).......................        (2,079)      (31,753)
 Elimination of intersegment net income(2)........       (93,137)      (39,786)
                                                   -------------  ------------
  Consolidated net income......................... $     218,361  $    189,835
                                                   =============  ============




                                                   March 31, 2001 March 31, 2000
                                                   -------------- --------------
                                                            
Total Assets
 Total assets from segments.......................  $64,221,801    $55,141,630
 Other assets(1)..................................    5,232,018      2,411,728
 Elimination of intersegment assets(2)............   (7,333,515)    (2,017,716)
                                                    -----------    -----------
  Consolidated total assets.......................  $62,120,304    $55,535,642
                                                    ===========    ===========

--------
(1) Other net interest income, other net income (loss) and other assets
    include amounts by BB&T's support functions not allocated to the various
    segments.
(2) BB&T's reconciliation of total segment results to consolidated results
    requires the elimination of internal management accounting practices.
    These adjustments include the elimination of funds transfer pricing
    credits and charges and the elimination of intersegment noninterest income
    and noninterest expense, which are allocated to the various segments using
    BB&T's internal accounting methods.

                                      12


Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations

ANALYSIS OF FINANCIAL CONDITION

  BB&T's total assets at March 31, 2001, were $62.1 billion, a $1.2 billion or
2.0% increase from the balance at December 31, 2000. The balance sheet
category that produced the majority of the increase was loans and leases,
including loans held for sale, which grew $1.3 billion. Loans held for sale
increased $425.3 million or 50.2%. Trading securities increased $90.5 million,
or 93.6% from the balance at December 31, 2000, while securities available for
sale remained relatively flat with a $41.1 million or .3% increase. These
increases were partially offset by declines in cash and due from banks,
securities held to maturity, and federal funds sold and securities purchased
under resale agreements or similar arrangements, which declined by a
collective $240.3 million compared to year-end 2000.

  Total deposits at March 31, 2001, decreased $130.6 million from December 31,
2000. Short-term borrowed funds declined $1.3 billion and long-term debt
increased $2.3 billion during the first three months of 2001. Total
shareholders' equity increased $170.8 million during the same time frame.

  The factors causing the fluctuations in these balance sheet categories are
further discussed in the following sections.

Loans and Leases

  BB&T had strong loan growth during the first quarter of 2001, with end of
period loans, excluding loans held for sale, increasing 8.3% on an annualized
basis since the end of 2000. Average total loans for the quarter ended March
31, 2001, increased 12.4% compared to the same period of 2000.

  Management has continued to emphasize commercial and consumer lending at a
faster rate than mortgage loans in order to improve the profitability of the
overall loan portfolio. BB&T acquired a number of community banks and thrift
institutions in recent years, which resulted in a significant percentage of
the consolidated loan portfolio being composed of mortgages. Also, BB&T is the
largest originator of mortgage loans in the Carolinas, with first quarter 2001
originations totaling $1.7 billion. Through the use of securitization programs
and the sale of fixed-rate mortgage loan originations, combined with BB&T's
commercial and consumer lending focus, the mix of the loan portfolio now
includes a higher percentage of commercial and consumer loans and lower
percentage of mortgage loans compared to prior years. Average mortgage loans,
which increased 9.0% during the first three months of 2001 compared to the
same period of 2000, represented 19.6% of average total loans and leases at
March 31, 2001, compared to 20.2% a year ago. Average commercial loans,
including lease receivables, increased 15.5% during the first three months of
2001, and now compose 53.6% of the loan portfolio compared to 52.2% in the
first quarter of 2000. Average consumer loans, which include sales finance,
revolving credit and direct retail, increased 9.1% for the three months ended
March 31, 2001, compared to the same period in 2000 and compose the remaining
26.7% of average loans.

  The growth rates of average loans for the first quarter of 2001 include the
full effect of loan portfolios held by companies that were acquired in
purchase transactions during the last nine months of 2000 and the first
quarter of 2001. Also, the securitization of $984.5 million of mortgage loans
during 2000 affected the reported growth in average mortgage loans. During the
first quarter of 2001, loans totaling $502.3 million were acquired through the
purchase of FirstSpartan Financial Corp. ("FirstSpartan"). Excluding the
effect of FirstSpartan, purchase accounting transactions completed during 2000
and mortgage loan securitizations, average "internal" loan growth for the
three months ended March 31, 2001, was 12.7% compared to the first quarter of
2000. By category, excluding the effects of purchase accounting transactions
and loan securitizations, average mortgage loans, including loans held for
sale, increased 19.7%, commercial loans grew 12.9%, and consumer loans
increased 7.1% in the first quarter of 2001 compared to 2000.

  The change in loan mix to a higher percentage of commercial and consumer
loans, the growth of the overall loan portfolio and the increase in the yield
of the portfolio, from 9.06% in the first quarter of 2000 to 9.15% in

                                      13


the first quarter of 2001, resulted in a 10.7% increase in interest income
from loans and leases in the first quarter of 2001 compared to the 2000
period. The average annualized fully taxable equivalent ("FTE") yield on
commercial, consumer and mortgage loans for the first three months of 2001
were 9.23%, 10.23%, and 7.47%, respectively, resulting in an average yield on
the total loan portfolio of 9.15%.

Securities

  Securities available for sale totaled $14.3 billion at March 31, 2001, an
increase of $41.1 million from December 31, 2000. Securities available for
sale had net unrealized gains, net of deferred income taxes, of $234.4 million
at March 31, 2001, compared to $99.4 million at December 31, 2000. Securities
held to maturity totaled $36.0 million, down $33.3 million from year-end 2000.
Trading securities totaled $187.2 million, an increase of $90.5 million
compared to the balance at December 31, 2000.

  The annualized FTE yield on the average total securities portfolio for the
first three months of 2001 was 7.32%, an increase of 66 basis points from the
yield earned in the first three months of 2000. This increase resulted
primarily from a restructuring of the securities portfolio during the second
and third quarters of 2000 that was undertaken in order to improve the overall
yield of the portfolio, improve the liquidity, and reduce the average duration
of the portfolio.

Other Interest Earning Assets

  Federal funds sold and securities purchased under resale agreements or
similar arrangements totaled $175.0 million at March 31, 2001, a decrease of
$86.2 million, or 33.0% compared to December 31, 2000. Interest-bearing
deposits with banks increased $19.4 million from December 31, 2000. These
categories of earning assets are subject to large daily fluctuations based on
the availability of these types of funds. The average yield on other interest-
earning assets for the first three months of 2001 was 5.85%, an increase from
the 5.76% earned during the first three months of 2000.

Other Assets

  BB&T's other noninterest-earning assets, excluding premises and equipment
and noninterest-bearing cash and due from banks, increased $24.2 million from
December 31, 2000 to March 31, 2001. The increase results from a $27.4 million
increase in goodwill from purchase acquisitions.

Deposits

  Total end of period deposits decreased $130.6 million from December 31,
2000, to March 31, 2001. However, average deposits for the first three months
of 2001 increased $2.3 billion, or 6.4%, compared to the first three months of
2000. The categories of deposits with the highest average rates of growth in
2001 compared to 2000 were: certificates of deposit and other time deposits,
which grew $1.6 billion, or 9.6%, and money rate savings accounts, including
investor deposit accounts, which increased $1.7 billion, or 17.8%. The growth
realized in these deposit categories was partially offset by declines of
$831.8 million, or 25.7%, in average savings and interest checking, and a
$183.4 million decrease in other time deposits.

  The growth in average deposits for the first quarter of 2001 include the
effect of deposits acquired in purchase accounting transactions completed
during the last nine months of 2000, and the first quarter of 2001. The
purchase of FirstSpartan resulted in the addition of $436.1 million in
deposits. Excluding the effects of purchase accounting transactions and
official check outsourcing, which reduced noninterest-bearing deposits by
$225.1 million, average deposits for the three months ended March 31, 2001
would have increased 4.5% compared to the first three months of 2000.
Excluding purchase accounting, transaction account deposits, which include
noninterest-bearing deposits, savings, interest checking and money rate
savings, would have increased 3.6% compared to the first three months of 2000.
Certificate accounts and other time deposits would have increased 7.0%,
excluding purchase accounting transactions.

                                      14


Other Borrowings

  The growth in loans, securities and other assets in recent years have
exceeded the growth of total deposits. As a result, cost-effective alternative
funding sources, such as Federal Home Loan Bank ("FHLB") advances, master
notes, purchases of Federal funds and sales of securities under repurchase
agreements have been increasingly utilized to support balance sheet growth.

  At March 31, 2001, short-term borrowed funds totaled $5.7 billion, a
decrease of $1.3 billion, or 18.2%, compared to December 31, 2000. For the
first quarter of 2001, average short-term borrowed funds totaled $6.4 billion,
a decrease of $969.0 million, or 13.2%, from the comparable period of 2000.
The average annualized rate paid on short-term borrowed funds was 5.49% for
the first quarter of 2001, an increase of 2 basis points from the average rate
of 5.47% paid in the first quarter of 2000. The slight increase in the cost of
short-term borrowed funds results from the higher interest rate environment
during 2000.

  Long-term debt consists primarily of FHLB advances, medium term bank notes
and corporate subordinated debt. These borrowings provide BB&T with the
flexibility to structure borrowings in a manner that aids in the management of
interest rate risk and liquidity. Long-term debt totaled $10.9 billion at
March 31, 2001, an increase of $2.3 billion, or 26.5%, from the balance at
December 31, 2000. For the first three months of 2001, average long-term debt
totaled $10.3 billion, an increase of $4.0 billion, or 62.8%, compared to the
prior year. Long-term debt has been utilized for a variety of funding needs,
including the repurchase of common stock in conjunction with certain
acquisitions. The substantial increase in long-term borrowings during the year
reflects BB&T's efforts to take advantage of declining interest rates and lock
in these lower funding costs for a longer period of time. The average
annualized rate paid on long-term borrowed funds was 5.79% for the first
quarter of 2001, an increase of 4 basis points from the average rate of 5.75%
paid in the first quarter of 2000.

Asset Quality

  BB&T's asset quality, as measured by relative levels of nonperforming assets
and net charge-offs, has remained excellent compared to published industry
averages. Nonperforming assets, composed of foreclosed real estate,
repossessions, nonaccrual loans and restructured loans, totaled $236.0 million
at March 31, 2001, compared to $201.2 million at December 31, 2000.
Nonperforming assets, as a percentage of loan-related assets, were .55% at
March 31, 2001, compared to .49% at December 31, 2000. Loans 90 days or more
past due and still accruing interest totaled $76.7 million compared to $73.7
million at year-end 2000.

  BB&T's net charge-offs totaled $25.6 million for the first quarter and
amounted to .25% of average loans and leases, on an annualized basis, compared
to $20.1 million, or .22% of average loans and leases, on an annualized basis,
in the corresponding period in 2000.

  The allowance for loan and lease losses was $555.5 million, or 1.31% of
loans and leases, at March 31, 2001, compared to $532.2 million, or 1.29% of
loans and leases, at December 31, 2000.

  The provision for loan and lease losses for the first quarter of 2001 was
$38.9 million, compared to $26.8 million in the comparable quarter of 2000.
The increased provision during 2001 was necessary to cover higher net charge-
offs, to maintain the allowance at a level considered adequate to absorb
losses inherent in the loan portfolio at the balance sheet date, and to
provide additional provisions for acquired entities to align their collection
and charge-off policies and procedures with those of BB&T.


                                      15


  Asset quality statistics for the last five calendar quarters are presented in
the accompanying table.

                             ASSET QUALITY ANALYSIS
                             (Dollars in thousands)



                                       For the Three Months Ended
                              ------------------------------------------------
                              3/31/01   12/31/00  9/30/00   6/30/00   3/31/00
                              --------  --------  --------  --------  --------
                                                       
Allowance For Loan & Lease
 Losses
 Beginning balance........... $532,203  $514,754  $498,358  $494,043  $487,339
 Allowance for acquired
  loans......................   10,084    12,934        --        --        --
 Provision for loan and lease
  losses.....................   38,850    43,300    38,650    28,414    26,767
 Net charge-offs.............  (25,605)  (38,785)  (22,254)  (24,099)  (20,063)
                              --------  --------  --------  --------  --------
  Ending balance............. $555,532  $532,203  $514,754  $498,358  $494,043
                              ========  ========  ========  ========  ========
Risk Assets
 Nonaccrual loans and
  leases..................... $182,021  $156,342  $131,390  $129,280  $126,293
 Foreclosed real estate......   29,035    27,461    21,209    17,532    18,502
 Other foreclosed property...   22,681    16,903    16,042    13,694    16,105
 Restructured loans..........    2,261       492       445       501     1,471
                              --------  --------  --------  --------  --------
  Total nonperforming
   assets.................... $235,998  $201,198  $169,086  $161,007  $162,371
                              ========  ========  ========  ========  ========
 Loans 90 days or more past
  due and still accruing..... $ 76,685  $ 73,699  $ 76,006  $ 63,771  $ 50,681
                              ========  ========  ========  ========  ========
Asset Quality Ratios
 Nonaccrual loans and leases
  as a percentage of total
  loans and leases*..........      .43%      .38%      .33%      .34%      .34%
 Total nonperforming assets
  as a percentage of:
  Total assets...............      .38       .33       .29       .28       .29
  Loans and leases plus
   foreclosed property*......      .55       .49       .43       .42       .43
 Annualized net charge-offs
  as a percentage of average
  loans and leases*..........      .25       .39       .23       .25       .22
 Allowance for loan and lease
  losses as a percentage of
  loans and leases*..........     1.31      1.29      1.31      1.29      1.32
 Ratio of allowance for loan
  and lease losses to:
  Net charge-offs............     5.35x     3.45x     5.81x     5.14x     6.12x
  Nonaccrual and restructured
   loans and leases..........     3.01      3.39      3.90      3.84      3.87

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

                                       16


MARKET RISK MANAGEMENT

  The effective management of market risk is essential to achieving BB&T's
strategic financial objectives. As a financial institution, BB&T's most
significant market risk exposure is interest rate risk. The primary objective
of interest rate risk management is to minimize the effect that changes in
interest rates have on net interest income. This is accomplished through
active management of asset and liability portfolios with a focus on the
strategic pricing of asset and liability accounts and management of maturity
mixes for assets and liabilities. The goal of these activities is the
development of appropriate maturity and repricing opportunities in BB&T's
portfolios of assets and liabilities that will produce consistent net interest
income during periods of changing interest rates. BB&T's Asset/Liability
Management Committee ("ALCO") monitors loan, investment and liability
portfolios to ensure comprehensive management of interest rate risk.

  The asset/liability management process is designed to achieve relatively
stable net interest margins and assure liquidity by coordinating the volumes,
maturities or repricing opportunities of earning assets, deposits and borrowed
funds. It is the responsibility of the ALCO to determine and achieve the most
appropriate volume and mix of earning assets and interest-bearing liabilities,
as well as ensure an adequate level of liquidity and capital, within the
context of corporate performance goals. The ALCO also sets policy guidelines
and establishes long-term strategies with respect to interest rate risk
exposure and liquidity. The ALCO meets regularly to review BB&T's interest
rate risk and liquidity positions in relation to present and prospective
market and business conditions, and adopts funding and balance sheet
management strategies that are intended to ensure that the potential impact on
earnings and liquidity as a result of fluctuations in interest rates is within
acceptable standards.

  The majority of assets and liabilities of financial institutions are
monetary in nature and differ greatly from most commercial and industrial
companies that have significant investments in fixed assets and inventories.
Fluctuations in interest rates and actions of the Board of Governors of the
Federal Reserve System ("FRB") to regulate the availability and cost of credit
have a greater effect on a financial institution's profitability than do the
effects of higher costs for goods and services. Through its balance sheet
management function, BB&T is positioned to respond to changing interest rates
and inflationary trends.

  Management uses Interest Sensitivity Simulation Analysis ("Simulation") to
measure the sensitivity of projected earnings to changes in interest rates.
Simulation takes into account the current contractual agreements that BB&T has
made with its customers on deposits, borrowings, loans, investments and any
commitments to enter into those transactions. Management monitors BB&T's
interest sensitivity by means of a computer model that incorporates the
current volumes, average rates and scheduled maturities and payments of asset
and liability portfolios, together with multiple scenarios of projected
prepayments, repricing opportunities and anticipated volume growth. Using this
information, the model projects earnings based on projected portfolio balances
under multiple interest rate scenarios. This level of detail is needed to
simulate the effect that changes in interest rates and portfolio balances may
have on the earnings of BB&T. This method is subject to the accuracy of the
assumptions that underlie the process, however, it provides a better
illustration of the sensitivity of earnings to changes in interest rates than
other analyses such as static or dynamic gap.

  The asset/liability management process requires a number of key assumptions.
Management determines the most likely outlook for the economy and interest
rates by analyzing external factors, including published economic projections
and data, the effects of likely monetary and fiscal policies as well as any
enacted or prospective regulatory changes. BB&T's current and prospective
liquidity position, current balance sheet volumes and projected growth,
accessibility of funds for short-term needs and capital maintenance are also
considered. This data is combined with various interest rate scenarios to
provide management with information necessary to analyze interest sensitivity
and to aid in the development of strategies to reach performance goals.

  The following table shows the effect that the indicated changes in interest
rates would have on net interest income as projected for the next twelve
months under the "most likely" interest rate scenario incorporated into the
Interest Sensitivity Simulation computer model. Key assumptions in the
preparation of the table include

                                      17


prepayment speeds of mortgage-related assets; cash flows and maturities of
derivative financial instruments, changes in market conditions, loan volumes
and pricing, deposit sensitivity; customer preferences and capital plans. The
resulting change in net interest income reflects the level of sensitivity that
net interest income has in relation to changing interest rates.

                   INTEREST SENSITIVITY SIMULATION ANALYSIS



                                                                                Annualized
                                                                               Hypothetical
                     Interest Rate Scenario                                     Percentage
                     ----------------------                                     Change in
                 Change in                  Prime                              Net Interest
                 Prime Rate                 Rate                                  Income
                 ----------                 -----                              ------------
                                                                         
                   +3.00%                   11.00%                                -1.26%
                   +1.50                     9.50                                 -0.85
                   -1.50                     6.50                                  -.26
                   -3.00                     5.00                                   .03


  Management has established parameters for asset/liability management which
prescribe a maximum impact on net interest income of 3% for a 150 basis point
parallel change in interest rates over six months from the most likely
interest rate scenario, and a maximum of 6% for a 300 basis point change over
12 months. It is management's ongoing objective to effectively manage the
impact of changes in interest rates and minimize the resulting effect on
earnings as evidenced by the preceding table. At March 31, 2001, the
sensitivity of BB&T's net interest income to changes in interest rates was
within management's targets, as illustrated in the accompanying table.

Derivative Financial Instruments

  BB&T utilizes a variety of financial instruments to aid in the management of
interest rate risk. These instruments, commonly referred to as derivatives,
primarily consist of interest rate swaps, caps, floors, collars, financial
forward and futures contracts and options written and purchased. A derivative
is a financial instrument that derives its cash flows, and therefore its
value, by reference to an underlying instrument, index or referenced interest
rate. BB&T uses derivatives to hedge business loans, mortgage loans and
certificates of deposit.

  Credit risk related to derivatives arises when amounts receivable from a
counterparty exceed those payable. The risk of loss with any counterparty is
limited to a small fraction of the notional amount. BB&T deals only with
national market makers with strong credit ratings in its derivatives
activities. BB&T further controls the risk of loss by subjecting
counterparties to credit reviews and approvals similar to those used in making
loans and other extensions of credit. All of the derivative contracts to which
BB&T is a party settle monthly, quarterly or semiannually. Further, BB&T has
netting agreements with the dealers with which it does business. Because of
these factors, BB&T's credit risk exposure at March 31, 2001, was not
material.

  Derivative contracts are written in amounts referred to as notional amounts.
Notional amounts only provide the basis for calculating payments between
counterparties and do not represent amounts to be exchanged between parties
and are not a measure of financial risks. On March 31, 2001, BB&T had
derivative financial instruments outstanding with notional amounts totaling
$2.7 billion. The estimated fair value of open contracts used for risk
management purposes reflected net unrealized losses of $13.2 million at March
31, 2001.

  BB&T classifies its derivative financial instruments as either (1) a hedge
of an exposure to changes in the fair value of a recorded asset or liability
("fair value hedge"), (2) a hedge of an exposure to changes in the cash flows
of a recognized asset, liability or forecasted transaction ("cash flow
hedge"), (3) a hedge of a foreign currency exposure ("foreign currency
hedge"), of which BB&T has none, or (4) derivatives not designated as hedges.
For a qualifying fair value hedge, changes in the value of the derivatives
that have been highly effective as hedges are recognized in current period
earnings along with the corresponding changes in the value of the

                                      18


designated hedged item. For a qualifying cash flow hedge, changes in the value
of the derivatives that have been highly effective are recognized in other
nonshareholder changes in equity until the related cash flows from the hedged
item are recognized. For either fair value hedges or cash flow hedges, net
income may be affected to the extent that changes in the value of the
derivative instruments do not perfectly offset changes in the value of the
hedged items. During the first quarter of 2001, there was no impact on net
income resulting from hedge ineffectiveness.

  BB&T recorded an unrecognized loss on cash flow hedges as a separate
component reducing shareholders' equity by $9.3 million at March 31, 2001.
Substantially all of this amount is attributable to forward commitments and
options hedging the cash flows from forecasted sales of mortgage loans. The
ultimate sale of the related loans will result in reclassification of these
unrecognized amounts into earnings. If the cash flow hedge is discontinued
because the forecasted transactions do not occur, these amounts will be
immediately reclassified into earnings. BB&T expects to reclassify
substantially all of the $9.3 million of unrecognized losses into earnings
within the next 12 months.

  BB&T has a notional amount of $731.6 million of derivatives that do not meet
the requirements for hedge accounting treatment under SFAS No. 133.
Accordingly, these derivatives have been recorded at fair value in accordance
with the statement. The related net gains or losses for these derivatives are
recorded in current period earnings as other noninterest income, and resulted
in a net gain of $1.4 million in the first quarter of 2001.

  BB&T's hedges resulted in a $.3 million increase in net interest income in
the first quarter of 2001 compared to an increase of $1.9 million in the
comparable period of 2000.

  The following tables set forth certain information concerning BB&T's
derivative financial instruments at March 31, 2001:

                       DERIVATIVE FINANCIAL INSTRUMENTS
                                March 31, 2001
                            (Dollars in thousands)



                                                    Average Average Estimated
                                          Notional  Receive   Pay     Fair
Type                                       Amount    Rate    Rate     Value
----                                     ---------- ------- ------- ---------
                                                        
Receive fixed swaps..................... $  113,000  6.69%   5.08%  $   1,265
Pay fixed swaps.........................     45,832  5.28    5.01          43
Caps, floors & collars..................     76,050    --      --          --
Foreign exchange contracts..............    154,982    --      --         691
Forward contracts on mortgage loans.....  1,755,675    --      --     (14,712)
Mortgage loan commitments...............    460,617    --      --         (22)
Options on mortgage lending
 commitments............................    115,000    --      --        (486)
                                         ----------                 ---------
  Total................................. $2,721,156                 $ (13,221)
                                         ==========                 =========


CAPITAL ADEQUACY AND RESOURCES

  The maintenance of appropriate levels of capital is a management priority
and is monitored on an ongoing basis. BB&T's principal goals related to
capital are to provide an adequate return to shareholders while retaining a
sufficient base to support future growth and comply with all regulatory
standards.

  Total shareholders' equity was $5.0 billion at March 31, 2001 and $4.9
billion at December 31, 2000. BB&T's book value per common share at March 31,
2001 was $12.32 compared to $11.88 at December 31, 2000.

  Financial holding companies and their subsidiaries are subject to regulatory
requirements with respect to risk-based capital adequacy. Risk-based capital
ratios measure capital as a percentage of a combination of risk-

                                      19


weighted balance sheet and off-balance sheet risk. The risk-weighted values of
both balance sheet and off-balance sheet items are determined in accordance
with risk factors specified by Federal regulatory pronouncements.

  Tier 1 capital (total shareholders' equity excluding unrealized gains or
losses on debt securities available for sale, net of tax effect, plus certain
mandatorily redeemable capital securities, less nonqualifying intangible
assets) is required to be at least 4% of risk-weighted assets, and total
capital (Tier 1 capital, a qualifying portion of the allowance for loan and
lease losses and qualifying subordinated debt) must be at least 8% of risk-
weighted assets, with one half of the minimum consisting of Tier 1 capital.

  In addition to the risk-based capital measures described above, regulators
have also established minimum leverage capital requirements for banking
organizations. This is the primary measure of capital adequacy used by BB&T's
management, and is calculated by dividing period-end Tier 1 capital by average
tangible assets for the most recent quarter. The minimum required Tier 1
leverage ratio ranges from 3% to 5% depending upon Federal bank regulatory
agency evaluation of an organization's overall safety and soundness.

  BB&T's capital adequacy ratios for the last five quarters are presented in
the accompanying table:

                            CAPITAL ADEQUACY RATIOS



                                          2001                2000
                                         ------- -------------------------------
                                          First  Fourth   Third  Second   First
                                         Quarter Quarter Quarter Quarter Quarter
                                         ------- ------- ------- ------- -------
                                                          
   Risk-based capital ratios:
    Tier 1 capital......................   9.2%    9.4%    9.4%   10.0%   10.1%
    Total capital.......................  11.8    12.0    12.2    12.8    13.3
   Tier 1 leverage ratio................   6.8     7.1     6.9     7.3     7.3


ANALYSIS OF RESULTS OF OPERATIONS

  Net income for the first quarter of 2001 totaled $218.4 million, an increase
of 15.0% compared to the $189.8 million earned during the comparable quarter
of 2000. On a diluted per share basis, earnings for the three months ended
March 31, 2001 were $.53, compared to $.46 for the same period in 2000, an
increase of 15.2%. BB&T's operating results for the first quarter of 2001
produced an annualized return on average assets of 1.45% and an annualized
return on average shareholders' equity of 17.97% compared to prior year ratios
of 1.40% and 18.16%, respectively.

  BB&T incurred significant expenses related principally to the consummation
of mergers and acquisitions during both 2001 and 2000. These expenses are
reflected in reported earnings. During 2001, BB&T recorded $24.9 million in
after-tax nonrecurring charges primarily associated with the merger and
related systems conversion with FCNB Corp., of Frederick, Maryland. During the
first quarter of 2000, BB&T incurred $19.8 million in after-tax nonrecurring
charges primarily associated with the acquisition of Premier Bancshares, Inc.,
of Atlanta, Georgia. Merger-related charges typically include the
consolidation of branch offices and bank operating functions, merger-related
personnel costs, professional services and other expenses.

  Excluding the effect of merger-related charges on 2001 and 2000 operating
results, BB&T would have had net income for the first quarter of 2001 totaling
$243.3 million, an increase of 16.1% over the $209.6 million that would have
been earned during the first quarter of 2000. Merger-related charges include,
but are not limited to, personnel-related expenses such as staff relocation,
early retirement packages and contract settlements; occupancy, furniture and
equipment expenses including branch consolidation; and other costs, such as
operational charge-offs, professional fees, etc. On a diluted per share basis,
earnings for the three months ended March 31, 2001, excluding merger charges,
were $.59, compared to $.51 for the same period in 2000, an increase of 15.7%.
BB&T's recurring operating results for the first quarter of 2001 produced an
annualized return on

                                      20


average assets of 1.61% and an annualized return on average shareholders'
equity of 20.03% compared to prior year ratios of 1.54% and 20.05%,
respectively.

  FTE net interest income increased 5.9% during the first quarter of 2001
compared to 2000 due to solid growth in average loans, improved yields on the
loan and securities portfolios and a more profitable mix of loans.
Fluctuations in net interest income, noninterest income and noninterest
expenses will be further discussed in the following paragraphs.

  The following table sets forth selected financial ratios for the last five
calendar quarters:

                            PROFITABILITY MEASURES



                                        2001                2000
                                       ------- -------------------------------
                                        First  Fourth   Third  Second   First
                                       Quarter Quarter Quarter Quarter Quarter
                                       ------- ------- ------- ------- -------
                                                        
Return on average assets..............   1.61%   1.58%   1.59%   1.55%   1.54%
Return on average equity..............  20.03   20.29   20.22   20.05   20.05
Net interest margin...................   4.08    4.15    4.14    4.19    4.22
Fee income ratio (taxable
 equivalent)*.........................   33.4    31.6    31.7    31.5    30.8
Efficiency ratio (taxable
 equivalent)*.........................   50.8    49.5    51.6    53.4    53.5

--------
*  Excludes securities gains (losses), foreclosed property expense and
   nonrecurring items.

Net Interest Income and Net Interest Margin

  Net interest income on an FTE basis was $571.0 million for the first quarter
of 2001 compared to $539.4 million for the same period in 2000, a 5.9%
increase. For the three months ended March 31, 2001, average earning assets
increased $5.0 billion, or 9.8%, compared to the same period of 2000, while
average interest-bearing liabilities increased by $5.3 billion, or 11.8%, and
the net interest margin decreased from 4.22% in the first quarter of 2000 to
4.08% in the current quarter. The 14 basis point decline in the net interest
margin was primarily the result of a 50 basis point increase in the cost of
interest-bearing deposits, as well as purchases of bank owned life insurance
products, which add to the cost of funds but produce revenue that is
classified as noninterest income. These purchases had a four basis point
negative impact on the net interest margin in the 2001 period.

                                      21


  The following table sets forth the major components of net interest income
and the related yields for the first quarter of 2001 compared to the same
period in 2000 and the variances between the periods caused by changes in
interest rates versus changes in volumes.

                 NET INTEREST INCOME AND RATE/VOLUME ANALYSIS
              For the Three Months Ended March 31, 2001 and 2000



                                                   Yield /
                             Average Balances       Rate       Income / Expense               Change due to
                          ----------------------- ----------  -------------------  Increase  ----------------
                             2001        2000     2001  2000    2001      2000    (Decrease)  Rate    Volume
                          ----------- ----------- ----  ----  --------- --------- ---------- -------  -------
                                          Fully Taxable Equivalent--(Dollars in thousands)
                                                                           
Assets
Securities(1):
 U.S. Treasury,
 government and
 other(5)...............  $13,279,284 $12,707,608 7.31% 6.58% $ 242,560 $ 209,195  $33,365   $23,707  $ 9,658
 States and political
 subdivisions...........      980,216   1,013,256 7.47  7.55     18,308    19,134     (826)     (211)    (615)
                          ----------- ----------- ----  ----  --------- ---------  -------   -------  -------
 Total securities(5)....   14,259,500  13,720,864 7.32  6.66    260,868   228,329   32,539    23,496    9,043
Other earning
assets(2)...............      311,455     413,112 5.85  5.76      4,492     5,912   (1,420)       57   (1,477)
Loans and leases, net of
unearned
income(1)(3)(4)(5)......   41,702,846  37,096,449 9.15  9.06    943,416   836,104  107,312    10,222   97,090
                          ----------- ----------- ----  ----  --------- ---------  -------   -------  -------
 Total earning assets...   56,273,801  51,230,425 8.67  8.39  1,208,776 1,070,345  138,431    33,775  104,656
                          ----------- ----------- ----  ----  --------- ---------  -------   -------  -------
 Non-earning assets.....    4,989,750   3,460,462
                          ----------- -----------
  Total assets..........  $61,263,551 $54,690,887
                          =========== ===========
Liabilities and
Shareholders' Equity
Interest-bearing
deposits:
 Savings and interest-
 checking...............  $ 2,401,054 $ 3,232,821 1.71  1.84     10,150    14,798   (4,648)   (1,047)  (3,601)
 Money rate savings.....   11,233,334   9,538,760 3.50  3.36     97,006    79,789   17,217     3,380   13,837
 Other time deposits....   19,711,310  18,294,798 6.09  5.39    296,063   245,209   50,854    30,947   19,907
                          ----------- ----------- ----  ----  --------- ---------  -------   -------  -------
 Total interest-bearing
 deposits...............   33,345,698  31,066,379 4.90  4.40    403,219   339,796   63,423    33,280   30,143
Short-term borrowed
funds...................    6,391,458   7,360,496 5.49  5.47     86,562   100,174  (13,612)     (380) (13,232)
Long-term debt..........   10,337,017   6,348,433 5.79  5.75    147,997    90,997   57,000       658   56,342
                          ----------- ----------- ----  ----  --------- ---------  -------   -------  -------
 Total interest-bearing
 liabilities............   50,074,173  44,775,308 5.16  4.77    637,778   530,967  106,811    33,558   73,253
                          ----------- ----------- ----  ----  --------- ---------  -------   -------  -------
 Noninterest-bearing
 deposits...............    4,957,727   4,939,181
 Other liabilities......    1,304,568     771,883
 Shareholders' equity...    4,927,083   4,204,515
                          ----------- -----------
  Total liabilities and
  shareholders' equity..  $61,263,551 $54,690,887
                          =========== ===========
Average interest rate
spread..................                          3.51  3.62
Net yield on earning
assets..................                          4.08% 4.22% $ 570,998 $ 539,378  $31,620   $   217  $31,403
                                                  ====  ====  ========= =========  =======   =======  =======
Taxable equivalent
adjustment..............                                      $  48,412 $  24,204
                                                              ========= =========

----
(1) Yields related to securities, loans and leases wholly or partially exempt
    from income taxes are stated on a taxable equivalent basis assuming tax
    rates in effect for the periods presented.
(2) Includes Federal funds sold and securities purchased under resale
    agreements or similar arrangements.
(3) Loan fees, which are not material for any of the periods shown, have been
    included for rate calculation purposes.
(4) Nonaccrual loans have been included in the average balances. Only the
    interest collected on such loans has been included as income.
(5) Includes assets which were held for sale or available for sale at
    amortized cost and trading securities at estimated fair value.

                                       22


Noninterest Income

  Noninterest income for the three months ended March 31, 2001, was $315.6
million compared to $239.6 million for the same period in 2000, an increase of
31.7%. Noninterest income for the first quarter includes certain special
nonrecurring items, including a $41.5 million writedown in the value of BB&T's
capitalized mortgage servicing rights resulting from the declining interest
rate environment, and a $63.0 million nonrecurring gain on an investment in an
electronic transaction processing company. Excluding these items, noninterest
income would have totaled $289.5 million for the first quarter of 2001, an
increase of 20.7% compared to 2000. Excluding nonrecurring items and purchase
accounting transactions, noninterest income would have increased 14.0% in the
first quarter of 2001 compared to the first quarter of 2000.

  Recurring noninterest income as a percentage of net interest income plus
noninterest income, or the "fee income ratio", was 33.4% for the first quarter
of 2001, compared to 30.8% in the first quarter of 2000. This increase
indicates that BB&T is deriving a greater percentage of its revenues from
noninterest income sources.

  Service charges on deposits totaled $73.4 million for the first quarter of
2001, an increase of $11.6 million, or 18.8%, compared to the first quarter of
2000. The largest component of the growth within service charges on deposits
in the 2001 period was NSF and overdraft charges on personal and commercial
accounts, which contributed $6.7 million to the increase in the first quarter,
as well as higher transaction volume. Account analysis fees on commercial
transaction accounts contributed $2.0 million, and service charges on demand
deposit accounts contributed $.7 million. Additionally, BankFirst was acquired
and accounted for as a purchase on December 27, 2000, which contributed $1.1
million to the increase in service charges on deposits in the first quarter of
2001 compared to the prior year quarter.

  Trust income totaled $24.1 million for the current quarter, an increase of
$5.4 million, or 28.8%, compared to the same period a year ago. The increase
in trust income reflects healthy growth in personal and corporate trust fees
compared to 2000. Assets under management totaled $14.6 billion at March 31,
2001, up from $14.2 billion, restated for the effects of One Valley, at March
31, 2000.

  Investment banking and brokerage fees and commissions totaled $43.2 million
during the first quarter of 2001, a decrease of $2.5 million, or 5.5%,
compared to the first quarter of 2000. The decrease resulted primarily from a
decline in trading income and fee income at BB&T's full-service brokerage
operation. This decrease was partially offset by income from Edgar M. Norris &
Co., an independent broker/dealer based in Greenville, South Carolina, which
was purchased on November 15, 2000. This acquisition was accounted for as a
purchase; therefore its operating results were only included in BB&T's
accounts in periods following the acquisition.

  Agency insurance commissions totaled $39.5 million for the first quarter of
2001, an increase of $7.9 million, or 25.1%, compared to the same three-month
period of 2000. This substantial growth in revenue resulted from the purchase
of additional agencies during 2000 and 2001, as well as internal growth.
During the first quarter of 2001, property and casualty insurance commissions
increased $5.6 million, other miscellaneous insurance fees and commissions
increased $1.3 million and contingent insurance commissions, group health and
other fees increased a collective $1.0 million.

  Income from mortgage banking activities totaled $5.2 million for the first
quarter of 2001, a decrease of $22.1 million, or 80.9%, from the same period
of 2000. This decline is due to a writedown in the value of BB&T's capitalized
mortgage servicing rights as a result of the falling interest rate
environment. This writedown was partially offset by an increase in servicing
fee income and gains on the sale of mortgage loans. Excluding the writedown,
mortgage income would have been $40.2 million, an increase of $12.9 million or
47.0% over the same period one year ago, reflecting the previously mentioned
growth in servicing fee income and gains from loan sales.

  Other nondeposit fees and commissions totaled $41.0 million for the first
quarter of 2001, an increase of $8.0 million, or 24.5%, compared to the three
months ended March 31, 2000. The principal drivers of the increase were:
income from the outsourcing of official checks, which added $4.5 million to
revenue for the

                                      23


quarter; ATM network fees and debit card income, which increased $1.7 million;
and debit card interchange fees, which were up $1.3 million.

  Securities gains and losses totaled $72.0 million in the first quarter of
2001 compared to a loss of $.1 million in the first quarter last year.
Excluding the $63.0 million gain from the sale of BB&T's ownership interest in
the electronic payment processor mentioned above, securities gains for the
current quarter would have been $2.9 million.

Noninterest Expense

  Noninterest expenses totaled $490.1 million for the first quarter of 2001
compared to $448.7 million for the same period a year ago, an increase of
9.2%. Noninterest expense for the first quarter of 2001 includes $53.9 million
of nonrecurring expenses principally associated with the acquisition and
systems conversion of FCNB Corp., and certain other special nonrecurring
charges, including the write-off of fixed assets rendered obsolete by
technology changes that were removed from service in the first quarter, and
buyouts of employment contracts and other personnel costs related to
restructuring certain lines of business acquired through prior mergers.
Excluding these costs, noninterest expenses would have totaled $436.2 million,
an increase of $18.2 million or 4.3% over the same period one year ago.
Excluding the effects of business combinations accounted for as purchases that
were completed in 2000 and 2001, and the aforementioned nonrecurring expenses,
noninterest expenses for the first quarter of 2001 would have actually
decreased .5% from the comparable period of 2000.

  BB&T's efficiency ratio (noninterest expenses, excluding the nonrecurring
expenses referred to above and costs related to foreclosed assets, as a
percentage of FTE net interest income plus noninterest income excluding
securities gains and losses) improved to 50.8% for the first quarter of 2001
compared to 53.5% for the first quarter of 2000.

  Personnel expense, the largest component of noninterest expense, was $258.2
million for the first quarter of 2001 compared to $237.0 million for the same
period in 2000, an increase of $21.2 million, or 8.9%. These amounts include
merger-related costs of $11.9 million in the first quarter of 2001 and $6.6
million in the first quarter of 2000. Excluding the merger-related charges,
personnel expense in the 2001 quarter would have increased $15.8 million, or
6.9%, from the 2000 period. This growth included the effect of acquisitions
completed in the last three quarters of 2000 and first quarter of 2001 that
were accounted for as purchases. Excluding the effects of the merger-related
charges and purchase acquisitions, personnel expense for the first quarter of
2001 would have increased $5.0 million, or 2.2%, over the first quarter of
2000. This increase was primarily the result of normal annual salary
adjustments, higher social security taxes, staff relocation expenses, fringe
benefits and 401(k) plan contributions.

  Occupancy and equipment expense for the three months ended March 31, 2001,
totaled $75.3 million, an increase of $6.2 million, or 9.0%, compared to 2000.
These amounts include merger-related charges of $7.4 million in the first
quarter of 2001 and $5.6 million in the first quarter of 2000. Excluding the
merger-related charges, occupancy and equipment expense would have been $67.9
million, an increase of $4.4 million, or 7.0% compared to the same period in
2000. The increase was principally the result of higher rent expense and an
increase in information technology equipment expense.

  The amortization of intangible assets totaled $17.0 million for the three
months ended March 31, 2001, an increase of $1.5 million, or 9.3%, from the
amount incurred in the first quarter of 2000. This increase is primarily due
to the acquisitions of BankFirst in the fourth quarter of 2000 and
FirstSpartan in the first quarter of 2001, consummated using purchase
accounting.

  Other noninterest expenses for the first quarter of 2001 totaled $140.0
million, an increase of $12.6 million, or 9.9%, compared to 2000. These
amounts include merger-related costs of $34.5 million in the first quarter of
2001 and $18.4 million in the first quarter of 2000. Excluding these costs,
other noninterest expenses for the three months ended March 31, 2001 would
have decreased $4.0 million, or 3.7%, from the comparable 2000

                                      24


period. This decline is due to reductions in contributions, advertising and
public relations expense, and professional services expense, which decreased a
collective $3.5 million.

Provision for Income Taxes

  The provision for income taxes totaled $90.9 million for the first quarter
of 2001, an increase of $1.4 million, or 1.6%, compared to the first quarter
of 2000. The effective tax rates on pretax income were 29.4% and 32.0% for the
three months ended March 31, 2001 and 2000, respectively. Excluding the tax
benefits associated with merger-related and other nonrecurring charges, the
provision for income taxes would have been $102.5 million during the first
three months of 2001. Excluding the effect of nonrecurring items on pretax
income and the income tax provision, BB&T's effective income tax rates were
29.6% and 32.8% for the three months ended March 31, 2001 and 2000,
respectively.

                                      25


                          PART II. OTHER INFORMATION

Item 1. Legal Proceedings

  The nature of the business of BB&T's banking subsidiaries ordinarily results
in a certain amount of litigation. The subsidiaries of BB&T are involved in
various legal proceedings, all of which are considered incidental to the
normal conduct of business. Management believes that the liabilities arising
from these proceedings will not have a materially adverse effect on the
consolidated financial position or consolidated results of operations of BB&T.

Item 6. Exhibits and Reports on Form 8-K

  (a)

                                 EXHIBIT INDEX



  Exhibit
    No.                 Description                         Location
  -------               -----------                         --------
                                            
  2(a)     Agreement and Plan of Reorganization   Incorporated herein by
           dated as of July 29, 1994 and          reference to Registration
           amended and restated as of October     No. 33-56437.
           22, 1994 between the Registrant and
           BB&T Financial Corporation.

  2(b)     Plan of Merger as of July 29, 1994     Incorporated herein by
           as amended and restated on October     reference to Registration
           22, 1994 between the Registrant and    No. 33-56437.
           BB&T Financial Corporation.

  2(c)     Agreement and Plan of Reorganization   Incorporated herein by
           dated as of November 1, 1996 between   reference to Exhibit 3(a)
           the Registrant and United Carolina     filed in the Annual Report
           Bancshares Corporation, as amended.    on Form 10-K, filed
                                                  March 17, 1997.

  2(d)     Agreement of Plan of Reorganization    Incorporated herein by
           dated as of October 29, 1997 between   reference to Registration
           the Registrant and Life Bancorp,       No. 33-44183.
           Inc.

  2(e)     Agreement and Plan of Reorganization   Incorporated herein by
           dated as of February 6, 2000 between   reference to Exhibit 99.1
           the Registrant and One Valley          filed in the Current Report
           Bancorp, Inc.                          on Form 8-K, dated February
                                                  9, 2000.

  3(a)(i)  Amended and Restated Articles of       Incorporated herein by
           Incorporation of the Registrant, as    reference to Exhibit 3(a)
           amended.                               filed in the Annual Report
                                                  on Form 10-K, filed
                                                  March 17, 1997.

  3(a)(ii) Articles of Amendment of Articles of   Incorporated herein by
           Incorporation.                         reference to Exhibit
                                                  3(a)(ii) filed in the Annual
                                                  Report on Form 10-K, filed
                                                  March 18, 1998.

  3(b)     Bylaws of the Registrant, as           Incorporated herein by
           amended.                               reference to Exhibit 3(b)
                                                  filed in the Annual Report
                                                  on Form 10-K, filed
                                                  March 18, 1998.

  4(a)     Articles of Amendment to Amended and   Incorporated herein by
           Restated Articles of Incorporation     reference to Exhibit 3(a)
           of the Registrant related to Junior    filed in the Annual Report
           Participating Preferred Stock.         on Form 10-K, filed
                                                  March 17, 1997.


                                      26




 Exhibit
   No.                 Description                          Location
 -------               -----------                          --------
                                            
  4(b)   Rights Agreement dated as of December    Incorporated herein by
         17, 1996 between the Registrant and      reference to Exhibit 1 filed
         Branch Banking and Trust Company,        under Form 8-A, filed
         Rights Agent.                            January 10, 1997.

  4(c)   Subordinated Indenture (including Form   Incorporated herein by
         of Subordinated Debt Security) between   reference to Exhibit 4(d) of
         the Registrant and State Street Bank     Registration No. 333-02899.
         and Trust Company, Trustee, dated as
         of May 24, 1996.

  4(d)   Senior Indenture (including Form of      Incorporated herein by
         Senior Debt Security) between the        reference to Exhibit 4(c) of
         Registrant and State Street Bank and     Registration No. 333-02899.
         Trust company, Trustee, dated as of
         May 24, 1996.

 10(a)*  Death Benefit Only Plan, Dated April     Incorporated herein by
         23, 1990, by and between Branch          reference to Registration
         Banking and Trust Company (as            No. 33-33984.
         successor to Southern National Bank of
         North Carolina) and L. Glenn Orr, Jr.

 10(b)*  BB&T Corporation Non-Employee            Incorporated herein by
         Directors' Deferred Compensation and     reference to Exhibit 10(b)
         Stock Option Plan.                       of the Annual Report on Form
                                                  10-K, filed March 17, 1997.

 10(c)*  BB&T Corporation 1994 Omnibus Stock      Incorporated herein by
         Incentive Plan.                          reference to Registration
                                                  No. 33-57865.

 10(d)*  Settlement and Non-Compete Agreement,    Incorporated herein by
         dated February 28, 1995, by and          reference to Registration
         between the Registrant and L. Glenn      No. 33-56437.
         Orr, Jr.

 10(e)*  Settlement Agreement, Waiver and         Incorporated herein by
         General Release dated September 19,      reference to Registration
         1994, by and between the Registrant,     No. 33-56437.
         Branch Banking and Trust Company (as
         successor to Southern National Bank of
         North Carolina) and Gary E. Carlton.

 10(f)   BB&T Corporation 401(k) Savings Plan     Incorporated herein by
         (amended effective January 1, 2000).     reference to Exhibit 10(f)
                                                  in BB&T Corporation's Annual
                                                  Report on Form 10-K filed on
                                                  March 16, 2001.

 10(g)*  BB&T Corporation 1995 Omnibus Stock      Incorporated herein by
         Incentive Plan.                          reference to Exhibit 10(g)
                                                  filed in the Annual Report
                                                  on Form 10-K, filed March
                                                  17, 1997.

 10(h)*  Form of Branch Banking and Trust         Incorporated by reference to
         Company Long-Term Incentive Plan.        the identified exhibit under
                                                  the Quarterly Report on Form
                                                  10-Q, filed May 14, 1991.

 10(i)*  Form of Branch Banking and Trust         Incorporated by reference to
         Company Executive Incentive              the identified exhibit under
         Compensation Plan.                       the Annual Report on Form
                                                  10-K, filed February 22,
                                                  1985.



                                       27




 Exhibit
   No.                 Description                          Location
 -------               -----------                          --------
                                            
 10(j)*  Southern National Deferred               Incorporated herein by
         Compensation Plan for Key Employees.     reference to Exhibit 10(j)
                                                  filed in the Annual Report
                                                  on Form 10-K, filed March
                                                  17, 1997.

 10(k)*  BB&T Corporation Target Pension Plan.    Incorporated herein by
                                                  reference to Exhibit 10(k)
                                                  filed in the Annual Report
                                                  on Form 10-K, filed March
                                                  17, 1997.

 10(l)*  BB&T Corporation Supplemental            Incorporated herein by
         Executive Retirement Plan.               reference to Exhibit 10(l)
                                                  filed in the Annual Report
                                                  on Form 10-K, filed March
                                                  17, 1997.

 10(m)*  Settlement and Noncompetition            Incorporated herein by
         Agreement, dated July 1, 1997, by and    reference to Exhibit 10(m)
         between the Registrant and E. Rhone      filed in the Annual Report
         Sasser.                                  on Form 10-K, filed March
                                                  18, 1998.

 10(n)*  BB&T Corporation Supplemental Defined    Incorporated herein by
         Contribution Plan for Highly             reference to Registration
         Compensated Employees.                   No. 333-69823.

 10(o)*  Scott & Stringfellow, Inc. Executive     Incorporated herein by
         and Employee Retention Plan.             reference to Registration
                                                  No. 333-81471.

 10(p)*  BB&T Corporation Non-Qualified Defined   Incorporated herein by
         Contribution Plan.                       reference to Registration
                                                  No. 333-50035.

 10(q)*  BB&T Corporation Amended and Restated    Filed herewith.
         1996 Short-term Incentive Plan.

 10(r)*  Amendment to 1995 Omnibus Stock          Incorporated herein by
         Incentive Plan.                          reference to Registration
                                                  No. 333-36540.

 10(s)*  Employment Agreement dated February 6,   Incorporated herein by
         2000, by and between the Registrant      reference to Exhibit 10(s)
         and J. Holmes Morrison.                  in BB&T Corporation's Annual
                                                  Report on Form 10-K filed on
                                                  March 16, 2001.

 10(t)   BB&T Corporation Pension Plan (amended   Incorporated herein by
         effective January 1, 2000).              reference to Exhibit 10(t)
                                                  in BB&T Corporation's Annual
                                                  Report on Form 10-K filed on
                                                  March 16, 2001.

 10(u)*  Amendment to BB&T Corporation            Incorporated herein by
         Nonqualified Defined Contribution        reference to Exhibit 10(u)
         Plan.                                    in BB&T Corporation's Annual
                                                  Report on Form 10-K filed on
                                                  March 16, 2001.


                                       28




 Exhibit
   No.                 Description                          Location
 -------               -----------                          --------
                                            
 10(v)*  Amendment to BB&T Corporation Non-       Incorporated herein by
         Employee Directors' Deferred             reference to Exhibit 10(v)
         Compensation and Stock Option Plan.      in BB&T Corporation's Annual
                                                  Report on Form 10-K filed on
                                                  March 16, 2001.

 10(w)*  Amendment to the BB&T Corporation        Incorporated herein by
         Supplemental Defined Contribution Plan   reference to Exhibit 10(w)
         for Highly Compensated Employees.        in BB&T Corporation's Annual
                                                  Report on Form 10-K filed on
                                                  March 16, 2001.

 11      Statement re Computation of Earnings     Filed herewith as Note E.
         Per Share.

 22      Proxy Statement for the 2001 Annual      Incorporated herein by
         Meeting of Shareholders.                 reference to BB&T
                                                  Corporation's Proxy
                                                  Statement filed on March 16,
                                                  2001.

--------
*  Management compensatory plan or arrangement.

  (b) Current Reports on Form 8-K during and following the quarter ended
      March 31, 2001.

    On January 12, 2001, BB&T filed a Current Report on Form 8-K under Item
    5 to report the results of operations for the fourth quarter of 2000.
    On January 24, 2001, BB&T filed a Current Report on Form 8-K under Item
    5 to announce that BB&T had entered into a definitive agreement to
    acquire Virginia Capital Bancshares, Inc. of Fredericksburg, Virginia,
    and to file certain presentation material related to this transaction.
    On January 24, 2001, BB&T filed a Current Report on Form 8-K under Item
    5 to announce that BB&T had entered into a definitive agreement to
    merge with F&M National Corporation of Winchester, Virginia, and to
    file certain presentation material related to this transaction. On
    February 8, 2001, BB&T filed a Current Report on Form 8-K under Item 5
    to file presentation material related to an Investor and Analyst
    Conference held on February 8, 2001. On April 11, 2001, BB&T filed a
    Current Report on Form 8-K under Item 5 to report the results of
    operations for the first quarter of 2001. On April 27, 2001, BB&T filed
    a Current Report on Form 8-K under Item 5 to report BB&T's operations
    and financial condition restated for the accounts of FCNB Corp., which
    was acquired on January 8, 2001.

                                      29


                                   SIGNATURES

  Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                          BB&T CORPORATION (Registrant)

Date: May 11, 2001                                   /s/ Scott E. Reed
                                          By: _________________________________
                                              Scott E. Reed, Senior Executive
                                                           Vice
                                               President and Chief Financial
                                                          Officer

Date: May 11, 2001                                 /s/ Sherry A. Kellett
                                          By: _________________________________
                                                 Sherry A. Kellett, Senior
                                                      Executive Vice
                                                 President and Controller
                                              (Principal Accounting Officer)

                                       30