Economy

BB&T, SunTrust merge to create nation's 6th largest bank

BB&T, SunTrust merge to create nation's 6th largest bank

The companies said they expect to save $1.6 billion a year in expenses by 2022 and that's likely to mean layoffs, as with past bank mergers. In the current home markets for both companies, the combined company will maintain the Community Banking Center in Winston-Salem, NC and the Wholesale Banking Center in Atlanta, GA. King said during a call with analysts Thursday that the combined business will invest heavily in technology.

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

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. 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 two banks have always been considered natural partners and advisers said they do not expect another bank to make a bid. They said that when they combine, they'll have top-three market share in eight states.

The deal "could be prescient of similarly-sized transactions, particularly in the $100-$250B asset range, as banks seek to scale to compete with larger banks", said CFRA Research analyst Harrison Webster.

BB&T Corporation and SunTrust Banks said on February 7 that they have agreed an all-stock merger valued at around $66bn.

The deal pays SunTrust shareholders 1.295 BB&T shares for each SunTrust share they own, according to a joint statement released Thursday morning.

Melbourne Cup-winning trainer Weir faces four-year ban
Stewards opened the show cause hearing on Friday and withdrew all Weir's and McLean's horses from race meetings over the weekend. The devices are known as "jiggers" and can cause horses to run faster in conjunction with a jockey using their whip.

SunTrust shares were up 8.5% following the news, and BB&T's were higher by 4.8%.

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

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. BB&T shareholders will own approximately 57% and SunTrust shareholders will own approximately 43% of the combined company.

The two banks have a combined 92 offices in Central Florida and control $12.8 billion of deposits in Central Florida, according to the Federal Deposit Insurance Corp.

A Wachtell Lipton memo said the speed of the approvals was evidence of an "increasingly favorable regulatory environment for bank M&A".

Shares of SunTrust jumped 9.8 percent before the market open, while BB&T's stock rose 5.5 percent. "These are both very clean banks".

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". BB&T has more than 1,800 financial centers in 15 states and Washington, D.C.; SunTrust has an extensive network of branches, along with corporate and investment banking operations.