BB&T to merge with Sun Trust, local effects unclear

BB&T to merge with Sun Trust, local effects unclear

Southern regional banks BB&T and SunTrust are combining in $66 billion that will affect thousands of customers at two of Central Florida's five largest financial institutions. The combined company will operate under a new name and have its headquarters in Charlotte, North Carolina.

The new bank will have a new name that hasn't been announced yet.

It will keep a community banking center in Winston-Salem, North Carolina, where BB&T is based.

SunTrust shareholders will receive 1.295 shares of BB&T for each SunTrust share they own. BB&T shareholders will own approximately 57 percent of the new company, with SunTrust shareholders owning the rest.

Additionally, one of the top bank lawyers in the country, Watchtell Lipton's Ed Herlihy, recently argued in a note to clients that there has been a "sea change" in the way the Fed treats objections from community groups to bank transactions.

The 100,000-square-foot building slated for the intersection of J.K. Powell Blvd. and Columbus Street will house the 500 BB&T employees who now work in nine locations in the Whiteville area, including its Client Care Center on USA 701 North. SunTrust has 39 branches and $2.87 billion in deposits for just under 4 percent market share.

The two banks' market share will make them a formidable presence in the South, particularly in growing cities like Atlanta and Nashville, Tenn., analysts speculate.

RBC bankers advising BB&T on the deal, according to a bank spokeswoman, were Vinnie Badinehal, its head of financial institutions investment banking, Jason Braunstein, head of bank M&A, Eric Martinez and Sabrina Kureshy.

More news: U.S. lawmakers criticise Saudi Arabia, ask about weapons restrictions

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.

Both of the banks are calling it a "merger of equals". "These are both very clean banks".

BB&T Chairman and CEO Kelly King said during a conference call that the companies will be "careful and methodical" about which branches they close.

SunTrust has 15 branches in Polk County, according to its website.

The two banks have hundreds of branches within two miles of each other, but they serve different segments of the market.

Kelly S. King, chairman and chief executive officer of BB&T, will serve as CEO of the combined company through September 12, 2021.

Analysts largely expect regulators to approve the deal, although it will likely draw scrutiny from vocal bank critics like US senators Elizabeth Warren and Bernie Sanders. After that, he will serve as executive chairman for six months. He will then take over as CEO and King will continue to serve as chairman until 2023.

SunTrust shareholders will receive a 5% increase in their dividend upon consummation of the transaction based upon each Company's current dividend per share.

Related Articles