For immediate release

The Federal Reserve Board today announced its approval of the notice by BB&T Corporation, Winston-Salem, North Carolina, to acquire Craigie Incorporated, Richmond, Virginia, and thereby engage in several securities-related activities. Attached is the Board's Order relating to this action.

BB&T Corporation Winston-Salem, North Carolina Order Approving Notice to Engage in Nonbanking Activities

BB&T Corporation, Winston-Salem, North Carolina ("BB&T"), a bank holding company within the meaning of the Bank Holding Company Act ("BHC Act"), has requested the Board's approval under section 4(c)(8) of the BHC Act (12 U.S.C. � 1843(c)(8)) and section 225.24 of the Board's Regulation Y (12 C.F.R. 225.24) to acquire all the voting securities of Craigie Incorporated, Richmond, Virginia ("Company"), and thereby engage in the following nonbanking activities: underwriting and dealing in, to a limited extent, all types of debt and equity securities other than interests in open-end investment companies ("bank-ineligible securities"); extending credit and servicing loans, pursuant to section 225.28(b)(1) of Regulation Y (12 C.F.R. 225.28(b)(1)); providing leasing services, pursuant to section 225.28(b)(3) of Regulation Y (12 C.F.R. 225.28(b)(3)); providing financial and investment advisory services, pursuant to section 225.28(b)(6) of Regulation Y (12 C.F.R. 225.28(b)(6)); providing securities brokerage, riskless principal, private placement and other transactional services, pursuant section 225.28(b)(7)(i), (ii), (iii) and (v) of Regulation Y (12 C.F.R. 225.28(b)(7)(i), (ii), (iii) and (v)); and underwriting and dealing in government obligations and money market instruments in which state member banks may underwrite and deal under 12 U.S.C. �� 335 and 24(7) ("bank-eligible securities"), and engaging in investing and trading activities, pursuant to section 225.28(b)(8)(i) and (ii) of Regulation Y (12 C.F.R. 225.28(b)(8)(i) and (ii)). Notice of the proposal, affording interested persons an opportunity to submit comments, has been published (62 Federal Register 42,130 (1997)). The time for filing comments has expired, and the Board has considered the proposal and all comments received in light of the factors set forth in section 4(c)(8) of the BHC Act. BB&T, with total consolidated assets of $23 billion, is the 35th largest banking organization in the United States.1 BB&T controls five banking subsidiaries and one thrift subsidiary that operate in North Carolina, South Carolina, and Virginia, and engages in a broad range of permissible nonbanking activities throughout the United States. Company, with consolidated assets of $76 million, engages in investment advisory, securities brokerage, securities underwriting, and related activities. Company is, and following the proposed acquisition will continue to be, a broker-dealer registered with the Securities and Exchange Commission ("SEC") under the Securities and Exchange Act of 1934 ("1934 Act") (15 U.S.C. � 78a et seq.) and a member of the National Association of Securities Dealers ("NASD"). Accordingly, Company is, and will remain, subject to the recordkeeping and reporting obligations, fiduciary standards, and other requirements of the 1934 Act, the SEC, and the NASD. Underwriting and Dealing Activities The Board has determined -- subject to the framework of prudential limitations to address the potential for conflicts of interests, unsound banking practices, or other adverse effects -- that the proposed activities of underwriting and dealing in bank-ineligible securities are so closely related to banking as to be a proper incident thereto within the meaning of section 4(c)(8) of the BHC Act.2 The Board also has determined that conduct of the proposed activities is consistent with section 20 of the Glass-Steagall Act (12 U.S.C. � 377), provided that the company engaged in underwriting and dealing activities derives no more than 25 percent of its gross revenues from underwriting and dealing in bank-ineligible securities over a two-year period.3 BB&T has committed that Company will conduct its bank-ineligible securities underwriting and dealing activities subject to the Board's 25 percent revenue limit.4 Other Activities Approved by Regulation The Board previously has determined by regulation that the proposed credit and loan servicing activities; leasing activities; financial and investment advisory services; securities brokerage, riskless principal, private placement and other transactional activities; bank-eligible underwriting and dealing, and investment and trading activities to be conducted by BB&T after its acquisition of Company are closely related to banking within the meaning of section 4(c)(8) of the BHC Act.5 BB&T has committed to conduct each of these activities in accordance with Regulation Y and relevant Board interpretations and orders. Proper Incident to Banking Standard In order to approve this proposal, the Board also must determine that the proposed activities are a proper incident to banking, that is, that the proposed transaction "can reasonably be expected to produce benefits to the public . . . that outweigh possible adverse effects, such as undue concentration of resources, decreased or unfair competition, conflicts of interests, or unsound banking practices."6 BB&T has proposed to conduct its underwriting and dealing activities in bank-ineligible securities in accordance with the framework of prudential limitations established by the Board in the Section 20 Orders. After concluding that a narrower set of restrictions is fully consistent with safety and soundness, should improve the operating efficiencies of section 20 subsidiaries, and should increase options for customers of section 20 subsidiaries, the Board recently modified the prudential limitations it had established in the Section 20 Orders.7 The Board's action in this case is conditioned on compliance by BB&T and its subsidiaries, including Company, with the prudential limitations established in the Section 20 Orders, as recently revised. As noted above, BB&T and Company also will conduct the other proposed activities in accordance with the limitations set forth in Regulation Y, and the Board's orders and interpretations relating to each of these activities. As part of its evaluation of the proper incident to banking factors, the Board also considers the financial and managerial resources of the notificant and its subsidiaries and the effect the transaction would have on such resources.8 The Board has reviewed the capitalization of BB&T and Company in accordance with the standards set forth in the Section 20 Orders and finds the capitalization of each to be consistent with the approval. The determination about the capitalization of Company is based on all the facts of record, including BB&T's projections of the volume of Company's underwriting and dealing activities in bank-ineligible securities. On the basis of its supervisory experience with BB&T, the results of a recent infrastructure review of Company, the commitments provided in this case, and the proposed management of Company, the Board has determined that BB&T and Company have established policies and procedures to ensure compliance with this order and the Section 20 Orders, including computer, audit, and accounting systems, internal risk management controls, and the necessary operational and managerial infrastructure. The Board also has reviewed other aspects of the managerial resources of the entities involved in the proposal, including the expected effect of the proposal on such resources. On the basis of the foregoing and all the facts of record, the Board has concluded that financial and managerial considerations are consistent with approval of the proposal. The Board also has carefully considered the competitive effects of this proposal. BB&T operates a subsidiary that competes with Company. The markets for the nonbanking services offered by BB&T and Company are unconcentrated, and there are numerous providers of the nonbanking services that BB&T and Company offer. As a result, consummation of this proposal would have a de minimis effect on competition for these services, and the Board has concluded that the proposal would not result in a significantly adverse effect on competition in any relevant market. The Board expects that the proposed acquisition would provide added convenience to customers of both BB&T and Company and lead to improved methods of meeting customer financing needs. BB&T notes that the proposed acquisition would give Company greater access to capital and enhanced marketing and administrative support that would make Company a stronger competitor. Additionally, following consummation of the proposed acquisition, BB&T would be able to offer to its customers the underwriting and dealing services of Company. Based on all the facts of record, the Board has determined that consummation of the proposal by BB&T can reasonably be expected to produce public benefits. Under the framework and conditions established in this order and the Section 20 Orders (as revised), and based on all the facts of record, the Board concludes that Company's proposed underwriting and dealing activities in bank-ineligible securities are not likely to result in significantly adverse effects that would outweigh the public benefits. Similarly, the Board finds no evidence that Company's proposed riskless principal, private placement, and other nonbanking activities -- conducted under the framework and conditions established in this order and Regulation Y -- would likely result in any significantly adverse effects, such as undue concentration of resources, decreased or unfair competition, conflicts of interests, or unsound banking practices, that would outweigh the public benefits of the proposal. Accordingly, the Board has determined that performance of the proposed activities by BB&T are a proper incident to banking for purposes of section 4(c)(8) of the BHC Act. Conclusion On the basis of all the facts of record, including all the commitments and representations made by BB&T, the Board has determined to, and hereby does, approve this notice subject to all the terms and conditions discussed in this order and in the Section 20 Orders, as modified by the Modification Orders. The Board's approval of this proposal extends only to activities conducted within the limitations of those orders and this order, including the Board's reservation of authority to establish additional limitations to ensure that Company's activities are consistent with safety and soundness, avoiding conflicts of interests, and other relevant considerations under the BHC Act. Underwriting and dealing in any manner other than as approved in this order and the Section 20 Orders, as modified by the Modification Orders, is not within the scope of the Board's approval and is not authorized for Company. The Board's determination also is subject to all the terms and conditions set forth in Regulation Y, including those in sections 225.7 and 225.25(c) (12 C.F.R. 225.7 and 225.25(c)), and to the Board's authority to require modification or termination of the activities of a bank holding company or any of its subsidiaries as the Board finds necessary to assure compliance with and to prevent evasion of the provisions of the BHC Act and the Board's regulations and orders issued thereunder. The Board's decision specifically is conditioned on BB&T's compliance with all the commitments made in connection with this notice, including the commitments discussed in this order and the conditions set forth in the Board regulations and orders noted above. The commitments and conditions shall be deemed to be conditions imposed in writing by the Board in connection with its findings and decisions, and may be enforced in proceedings under applicable law. This transaction shall not be consummated later than three months after the effective date of this order unless such period is extended for good .cause by the Board or by the Federal Reserve Bank of Richmond, acting pursuant to delegated authority.

By order of the Board of Governors,9 effective September 17, 1997. (signed) Jennifer J. Johnson Jennifer J. Johnson Deputy Secretary of the Board

Footnotes 1 Asset and ranking data are as of June 30, 1997. 2 See J.P. Morgan & Co. Incorporated, et al., 75 Federal Reserve Bulletin 192 (1989), aff'd sub nom. Securities Industries Ass'n v. Board of Governors of the Federal Reserve System, 900 F.2d 360 (D.C. Cir. 1990); Citicorp, et al., 73 Federal Reserve Bulletin 473 (1987), aff'd sub nom. Securities Industry Ass'n v. Board of Governors of the Federal Reserve System, 839 F.2d 47 (2d Cir. 1988), cert. denied, 486 U.S. 1059 (1988); as modified by Review of Restrictions on Director, Officer and Employee Interlocks, Cross-Marketing Activities, and the Purchase and Sale of Financial Assets Between a Section 20 Subsidiary and an Affiliated Bank or Thrift, 61 Federal Register 57,679 (1996) and Amendments to Restrictions in the Board's Section 20 Orders, 62 Federal Register 45,295 (1997) (collectively, the "Section 20 Orders"). 3 Compliance with the revenue limitation shall be calculated in accordance with the method stated in the Section 20 Orders, as modified by the Order Approving Modifications to the Section 20 Orders, 75 Federal Reserve Bulletin 751 (1989), and 10 Percent Revenue Limit on Bank-Ineligible Activities of Subsidiaries of Bank Holding Companies Engaged in Underwriting and Dealing in Securities, 61 Federal Register 48,953 (1996), and Revenue Limit on Bank-Ineligible Activities of Subsidiaries of Bank Holding Companies Engaged in Underwriting and Dealing in Securities, 61 Federal Register 68,750 (1996) (collectively, "Modification Orders"). 4 Company may provide services that are necessary incidents to the proposed underwriting and dealing activities. Unless Company receives specific approval under section 4(c)(8) of the BHC Act to conduct the activities independently, Company must treat any revenues from the incidental activities as ineligible revenues subject to the Board's revenue limitation. 5 See 12 C.F.R. 225.28(b)(1), (3), (6), (7)(i), (7)(ii), (7)(iii), (7)(v), (8)(i) and (8)(ii). 6 See 12 U.S.C. � 1843(c)(8). 7 See Amendments to Restrictions in the Board's Section 20 Orders, 62 Federal Register 45,295 (1997). 8 See 12 C.F.R. 225.26. 9 Voting for this action: Chairman Greenspan, Vice Chair Rivlin, and Governors Kelley and Phillips. Absent and not voting: Governor Meyer.

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1997 Orders on banking applications