BB&T-SunTrust deal will ripple through the Richmond market

Andrew Cummings
February 9, 2019

David White, BB&T's vice president for corporate communications, could not immediately say if the merger would affect a planned $20 million facility in Whiteville that the bank announced in October. Southern National evolved from the Bank of American, which was established by former North Carolina governor Angus MacLean and Judge Thomas A. McNeill in 1897 with $15,000.

BB&T shareholders will own about 57 percent and SunTrust shareholders will own the rest.

Big bank mergers had been nonexistent after the financial crisis, when a flurry of government-directed mergers created a handful of megabanks.

The BB&T-SunTrust announcement comes as a merger is already underway for Fidelity Bank and Ameris Bank.

Kelly King, BB&T's chief executive officer, will be the CEO of the combined company until Sept.12, 2021, after which SunTrust CEO William Rogers Jr will take over.

The bank has $211 billion in assets - the merger would more than double that. SunTrust shares have been down about 10% over the past year, while BB&T had lost nearly 5% during the same time. They said they'll now have top-three market share in eight states.

The new company's community banking center will be in Winston-Salem and the wholesale banking center in Atlanta. Further, Congress passed a law past year to ease some of the rules put into place under the Dodd-Frank Act after the financial crisis.

The press release stated the merger is expected to close in the fourth quarter of 2019, subject to satisfaction of customary closing conditions, including receipt of customary regulatory approvals and approval by the shareholders of each company.

The company changed its name in 1913 to Branch Banking and Trust Company, or BB&T.

"Number of banks in the U.S. has fallen 40% since 2000".

Both banks have a significant presence in Florida and Polk County.

Kelly King, BB&T's chief executive, described the deal as "a true merger of equals" that would give the combined group "the scale needed to compete and win in the rapidly evolving world of financial services".

The two banks have hundreds of branches within two miles of each other, but they serve different segments of the market. Brian Moynihan, chief executive officer of Bank of America Corp., said last month he could envision the creation of another megabank, given the large number of small players spread throughout the country.

The new company will be lead with BB&T Chairman and Chief Executive Officer Kelly S. King as the new company's Chairman and Chief Executive Office until September 12, 2021.

The combined company's board of directors and executive management team will be evenly split between the two institutions. He will then become CEO for six months, after which he'll add board chairman to his title.

Shares of Atlanta-based SunTrust jumped 8.3 percent to $63.62, above the acquisition price, while BB&T rose 2.4 percent to $49.71.

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