SunTrust and BB&T to merge in $66 billion deal

SunTrust and BB&T to merge in $66 billion deal

February 7th, 2019 by Wire Service and Staff Report in Breaking News

Southern regional banks BB&T and SunTrust are combining in an all-stock deal to create a new bank valued at about $66 billion.

The banks said today that the combined company will be the sixth-largest U.S. bank based on assets and deposits. It will have approximately $442 billion in assets, $301 billion in loans and $324 billion in deposits serving more than 10 million households.

"It's an extraordinarily attractive financial proposition that provides the scale needed to compete and win in the rapidly evolving world of financial services," BB&T Chairman and CEO Kelly King said in a prepared statement. "This is a trust merger of equals, combining the best of both companies to create the premier financial institution of the future."

The combined company will be based in Charlotte, North Carolina, its board and management evenly split between BB&T Corp. and SunTrust Banks Inc. A new name will be chosen before the deal closes in the fourth quarter.

The combined company will keep a community banking center in Winston-Salem, North Carolina, where BB&T is based. It will keep a wholesale banking center in Atlanta, where SunTrust has its headquarters.

SunTrust shareholders will receive 1.295 shares of BB&T for each share they own. BB&T shareholders will own about 57 percent and SunTrust shareholders will own the rest. SunTrust shareholders will receive a 5 percent increase in their dividend once the deal is complete.

In metropolitan Chattanooga, SunTrust is the second biggest bank with 21 offices and more than $1.6 billion in local deposits. BB&T has four offices in the Chattanooga area and had more than $123.1 million as of June 30, 2018.

Regional banks can be a bellwether for local economies and the willingness to pursue a deal of this size can be taken as a signal of optimism. The U.S. economy was sizzling in last year. The Commerce Department estimated last month that the economy, as measured by the gross domestic product, grew at a brisk 3.4 percent annual percent rate in the July-September quarter

Shares of SunTrust climbed 5.6 percent before the market open, while BB&T's stock rose slightly.