BB&T has purchased SunTrust Banks in a $66 billion deal announced Thursday. The all-stock deal combines two massive regional entities to create the sixth-largest retail bank in the U.S., and it marks the first major merger in the sector since the financial crisis ground big bank deals to a halt.
The move gives BB&T a much larger stake in the mortgage industry. In 2017, SunTrust ranked as top 25 lender with $10.6 billion in volume, according to data provided to HousingWire by iEmergent. By way of comparison, BB&T is ranked No. 34, with total mortgage lending volume of $6.7 billion.
The merged companies will rebrand under a new name, which will be announced prior to the deal’s close.
Together, they will have about $442 billion in assets, according to a release from BB&T, combining BB&T’s $225.7 billion in assets as of the end of 2018 with SunTrust’s $216 billion.
It will also have $301 billion in loans and $324 billion in deposits from the more than 10 million customers they collectively serve, BB&T said.
The merged company will relocate to a new corporate headquarters in Charlotte, North Carolina, while still maintaining operations in BB&T’s office in Winston-Salem, North Carolina, and SunTrust’s office in Atlanta.
BB&T said the new bank will open an Innovation and Technology Center that will focus on digital initiatives – part of the bank’s mission to invest heavily in tech to stay competitive with big banks.
The deal, which BB&T called a “merger of equals,” will split leadership between the two companies.
BB&T Chairman and CEO Kelly King will serve as Chairman and CEO of the combined company until Sept. 12, 2021. SunTrust Chairman and CEO William Rogers, Jr. will assume the role of president and COO before taking over King’s role when he steps down.
The new board of directors and executive management team will comprise members of both companies and existing boards, equally split.
“This is a true merger of equals, combining the best of both companies to create the premier financial institution of the future,” King said. “It's an extraordinarily attractive financial proposition that provides the scale needed to compete and win in the rapidly evolving world of financial services.”
Rogers stressed the new company’s increased ability to invest in technology through the combined resources – a major must for regional banks in this climate.
“By bringing together these two mission- and purpose-driven institutions, we will accelerate our capacity to invest in transformational technologies for our clients. Our shared culture embraces the disruption of technology and we will take this innovative mindset to expand our leadership in the next chapter of these historic brands,” Rogers said.
The deal is expected to close in the fourth quarter of 2019, subject to regulatory and shareholder approval.