Mr. Allison says he has applied the values learned through reading his favorite philosophers -- Aristotle, Thomas Aquinas, John Locke, Thomas Jefferson, and Ayn Rand -- in leading the Winston-Salem., N.C., company.
"I'm a student of philosophy," said the 51-year-old Mr. Allison, whose gentle and engaged demeanor suggests a humanities professor rather than a banking executive.
That study "has been helpful for our organization in developing a value system that I think has been central to our success."
The laissez-faire economics of Ayn Rand shows through in the bank's aggressive campaign of buyouts, while the autonomy it gives those acquisitions reflects the republican politics of Jefferson and Locke.
BB&T has succeeded under Mr. Allison's approach. In his 10-year run as chairman, its assets have grown ninefold, to almost $42 billion. And its stock price has soared 84% over the past three years, compared with a 41% gain for the Standard & Poor's index of 29 large banks.
Last year BB&T's return on equity -- 20.2% -- ranked it No. 9 among the 50 largest banks in the country, according to Keefe, Bruyette & Woods. That is ahead of its bigger North Carolina rivals: Bank of America Corp., First Union Corp., and Wachovia Corp.
Since its 1995 merger with Southern National Corp., BB&T has averaged 17.2% annual growth in per-share earnings, Mr. Allison said. In the third quarter, operating income rose 15% from a year earlier.
"BB&T is a focused, disciplined, great bank," said Christopher Quackenbush, head of investment banking at Sandler O'Neill & Partners, the investment bank that has represented several of the banks bought by BB&T.
During an interview, Mr. Allison said the ideals of "honesty, independent thinking, and justice" guide his decision-making. Such lofty notions translate into BB&T's decentralized operating structure, which he calls the key to the bank's success.
When pending deals are concluded, BB&T will have bought more than 40 community banks and thrifts over the past decade.
The result will be a group of 21 community banks, each with its own president though not its own charter, Mr. Allison said.
"We want the customized and personal service of a decentralized organization and yet the efficiency of a large organization," he said. BB&T's efficiency ratio was 52.8% in the second quarter, ranking it 10th among the nation's 50 largest banks, said Keefe, Bruyette & Woods.
BB&T's structure has enabled it to provide strong customer service, one analyst said.
"Decisions are made at the local level, and that's absolutely a strength," said Joel Conn, an analyst at Koonce Securities in Bethesda, Md. "It makes them very responsive to customers. Every one of their clients wants to be treated as an individual, and the community-based style let them do that."
Mr. Allison said BB&T intends to stick with its diffuse structure, even as he expects assets to double in the next five years amid continued acquisitions. Analysts say that is a sound strategy.
To succeed, "you just have to stay focused on what drives revenue," said Jacqueline Reeves, an analyst at Putnam, Lovell, de Guardiola & Thornton Inc.
Bank officials "know their customer needs, and they know the businesses they're lending to," Ms. Reeves said. "That makes a difference in the long run."
However, not everyone agrees that BB&T can remain so loose-knit. "I would expect that as they continue to grow, the structure will have to change," said Harold Schroeder, an analyst at Schroder & Co. "Many other banks held the belief (that they could stay decentralized) and found the structure unwieldy as they grew bigger." He cited Bank One Corp. and SunTrust Banks Inc. as examples.
But Catherine Murray, an analyst at J.P. Morgan Securities Inc., countered that "the old Norwest, now Wells Fargo, still has a big component of community banking, and so far it is working pretty well." Wells Fargo & Co. bought Norwest Corp. last year.
BB&T has prospered in its acquisitions by laying off as few workers as possible, Mr. Allison said. "We have taken an approach almost opposite to that of other banks," he said. "The biggest challenge is revenue growth, not cost savings.
If you destroy the morale of the employees in the company you acquire, you destroy what you bought." BB&T only attempts friendly mergers, Mr. Allison said.
"We want to do the best we can to take care of" workers who were productive in the banks BB&T acquired, Mr. Allison said. "If their jobs are eliminated, we want to get them into other areas."
Sandler O'Neill's Mr. Quackenbush said BB&T's merger partners usually appreciate its takeover style. "The companies we sold to them feel comfortable that they picked the right partner," he said.
BB&T now has more than 600 branches in the Carolinas, Georgia, Kentucky, Maryland, Virginia, Washington, and West Virginia, and Mr. Allison said the company will continue to buy community banks and thrifts. It generally has bought institutions with assets from $500 million to $3 billion, but is considering larger deals, he said.
Geographically, Mr. Allison is looking in the Carolinas, Virginia, Washington, Maryland -- particularly the Baltimore area -- Georgia, West Virginia, and Tennessee. BB&T wants companies in both metropolitan and rural areas. Its last deal, still pending, was a July agreement to buy $1.4 billion-asset Premier Bancshares Inc. of Atlanta for $639 million.
Analysts said possible targets are CCB Financial Corp. of Durham, N.C., First Virginia Banks Inc. of Falls Church, SouthTrust Corp. of Birmingham, and One Valley Bancorp of Charleston, W.Va. Mr. Allison would not comment on specific banks.
One analyst says BB&T is likely to continue its success in integrating companies. "The management team has demonstrated an ability to integrate acquisitions very well," said Ms. Reeves of Putnam Lovell. "Some of the institutions that want to hook up with larger organizations value the way BB&T integrates, because it eliminates the least amount of jobs as possible and doesn't slash and burn. BB&T may be viewed as the acquirer of choice."
Another factor behind BB&T's success is growing fee income, analysts said. Over the last five years, the bank has had the fastest fee-income growth rate of the 50 largest U.S. banks, Mr. Allison said. So fees now account for 32% of earnings, up from 25% five years ago. "We believe fee income is more stable than interest income," Mr. Allison said. "The fee business is also very profitable."
The increased role of fee income makes BB&T "less vulnerable to swings in interest rates and gives it a steady revenue stream," Ms. Reeves agreed. "They aren't reliant on any one particular area."
While it mulls more acquisitions, BB&T itself has been the subject of takeover talk, Mr. Allison said. He would not specify the suitors.
"We believe it is appropriate for us to remain independent, provided we can remain a high performer," Mr. Allison said. "And I am confident we will remain a superior performer and thus remain independent."
"They are large enough that they have an advantage of scale, and they are a well run company," said Ms. Murray of J.P. Morgan. "They are generally in control of their own destiny."
