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WINSTON-SALEM, N.C., May 11 /PRNewswire-FirstCall/ -- BB&T Corporation (NYSE: BBT) today announced a plan to repay all of its preferred stock and warrants invested in the company through the U.S. Treasury's TARP Capital Purchase Program.

"I am pleased to announce that BB&T is poised to be one of the first large financial institutions to repay the government investment," said President and Chief Executive Officer Kelly S. King. "Following the favorable results of the government's rigorous stress test and consistent with our own internal projections that BB&T has sufficient capital under an adverse economic scenario, our board of directors has approved a plan that effectively positions BB&T for the long term. After consultations with our regulators and, subject to their approval, we will use the proceeds of a common stock issuance, in addition to other funds, to repay the government's investment in BB&T."

BB&T's board of directors yesterday also declared the third quarter 2009 dividend of $.15 per share, a 68% reduction compared to the third quarter last year. The dividend will be paid August 3 to shareholders of record as of July 10. The action to reduce the dividend preserves approximately $725 million in capital on an annualized basis.

"Our board carefully weighed many factors in making this decision," said King. "We have a long and proud history of paying dividends and understand how important the dividend is to our shareholders, so this decision to temporarily reduce the dividend was extremely difficult for the board and, for me personally, it marks the worst day in my 37 year career.

"However, we firmly believe this action is in the long-term best interests of our shareholders and our company because of the risk and uncertainty associated with being a TARP participant. In addition, our current earnings, while superior to our peers, are not likely to justify our $.47 dividend in the near term. When market conditions improve and our earnings provide for an increase in the dividend, we are committed to increasing it accordingly.

"This capital plan meets all of our critical stated objectives, which include maintaining a very strong capital position throughout the economic downturn, repaying the government investment as soon as possible and solidifying our position to benefit from the opportunities we predict will be available to stronger banks as economic conditions improve."

BB&T's tier 1 common ratio at March 31 was 7.1% and the company's tier 1 risk based capital ratio was 12.1%.

"BB&T remains an industry leader with very strong earnings power and capital levels. Our regulatory capital levels will remain well above regulatory minimums to be well capitalized following the implementation of our capital plan. I am extremely proud of our company's performance and remain absolutely convinced that our best days are ahead."

At March 31, BB&T had $143.4 billion in assets and operated 1,504 banking offices in the Carolinas, Virginia, West Virginia, Kentucky, Georgia, Maryland, Tennessee, Florida, Alabama, Indiana and Washington, D.C. BB&T's common stock is traded on the New York Stock Exchange under the trading symbol BBT.

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

Regulatory capital ratios are preliminary.

This press release contains certain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. These statements may address issues that involve significant risks, uncertainties, estimates and assumptions made by management. Actual results may differ materially from current projections. Please refer to BB&T's filings with the Securities and Exchange Commission for a summary of important factors that may affect BB&T's forward-looking statements. BB&T undertakes no obligation to revise these statements following the date of this press release.