BB&T to buy SunTrust: It’s the biggest bank merger in a decade

Daniel Fowler
February 7, 2019

Upon the closing of the transaction, the Board of Directors of the combined company will consist of members equally split between BB&T and SunTrust's current Directors.

Super regional banks, with typically have between $50 billion and $500 billion in assets, have been grappling with how to grow with fewer resources than the four largest USA banks like JPMorgan Chase & Co and Bank of America Corp.

A bank that got its start here in Eastern Carolina is merging with another financial institution to become the 6th largest bank in the country.

The merger joins two banks that have grown along with the bustling Southeast and Mid-Atlantic regions where they began. The companies operate banks from Pennsylvania to Florida, and as far west as Texas.

The merger will pressure other regional banks to consider their own deals, analysts said. Bank of America Corp.

Deal activity in the banking sector languished after the financial crisis a decade ago as stricter rules were imposed on lenders with more than $50 billion in assets and regulators barred banks with compliance issues from expanding. SunTrust has more of a commercial focus and larger clients, while BB&T has a substantial insurance business. The deal would create the sixth-largest bank in the US, with a combined $442 billion of assets and a customer base of more than 10 million households.

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Added to that, changes in the USA tax laws that lowered corporate tax also freed up capital and Wall Street has always been expecting a wave of deal-making in the banking sector.

The two banks have more than 80 branches locally, and a new name will be chosen before the deal closes in the fourth quarter.

SunTrust shareholders will receive 1.295 shares of BB&T for each SunTrust share they own. 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.

Winston-Salem, N.C. -based BB&T, which has had several names since it was founded in the aftermath of the Civil War, and SunTrust, chartered in Georgia in 1891, have been direct competitors in many cities.

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

"It's an extraordinarily attractive financial proposition that provides the scale needed to compete and win in the rapidly evolving world of financial services", King said in a prepared statement. On March 12, 2022, Rogers will also become Chairman and Chief Executive Officer of the combined company and its bank subsidiary. 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. William Rogers, SunTrust's CEO, will serve as president and chief operating officer until September 2021, then he will step into the CEO role and later the chairman position.

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