BB&T and SunTrust are joining to create new $66 billion bank

07 February, 2019, 21:52 | Author: Brooke Harris
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The pro forma company will have approximately $442 billion in assets, $301 billion in loans, and $324 billion in deposits serving more than 10 million households in the United States, with leading market share in numerous most attractive, high-growth markets in the country.

"The business has been changing and will be changing", SunTrust Chief Executive William Rogers said.

BB&T and SunTrust Banks announced Thursday that they have agreed to merge in a $66 billion deal to form a new bank that will be headquartered in Charlotte.

BB&T Chairman and chief executive officer Kelly King called the deal a "true merger of equals" in prepared remarks.

SunTrust was already the region's largest bank before the merger announcement, with about 21 percent of the area's deposits.

Klock said he believes that with attention of the SunTrust-BB&T deal, as well as the easier regulatory environment, more large bank mergers may be coming.

In December, BB&T said it was eliminating its Center City Allentown regional headquarters as well as positions held by Scott V. Fainor and David B. Kennedy, former executives at National Penn Bancshares and longtime Lehigh Valley bankers.

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Analysts largely expect regulators to approve the deal, although it will likely draw scrutiny from vocal bank critics like USA senators Elizabeth Warren and Bernie Sanders.

The combined company will be based in Charlotte and operate under a new name but continue to have operations in Winston-Salem and Atlanta.

The combined company will be the sixth-largest retail bank in the country, putting BB&T and SunTrust in the ranks of other megabanks like JPMorgan Chase, Bank of America and Wells Fargo.

Industry executives have long predicted a wave of bank mergers that's so far played out only in smaller or mid-sized deals. SunTrust shareholders will receive a 5% increase in their dividend upon consummation of the transaction based upon each Company's current dividend per share. BB&T shareholders will own about 57 percent of the combined company and SunTrust shareholders will own the rest - creating roughly a merger of equals. "Together with Bill's leadership and our new SunTrust teammates, we're going to bring the best of both companies forward to serve our clients and communities". GAAP and Cash EPS accretion per SunTrust share in 2021 is expected to be approximately 9% and 16%, respectively (based on Street estimates).

King will serve as chairman and CEO of the new company until September 2021, but will stay on the board through 2023. Until then, Rogers will serve as president and chief operating officer. He will then become CEO for six months, after which he'll add board chairman to his title.

Shares of SunTrust jumped 11.1 percent in early morning trading, while BB&T's stock rose 5 percent.



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