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.
While it may be tempting to explain the deal by pointing to the partial rollback of the postcrisis Dodd-Frank financial reform law that signed was into law last spring by President Donald Trump, the bulk of that law's measures were targeted at banks far smaller than the one that will be created by this deal, if it is approved by regulators. The deal would create the sixth-largest bank in the USA, with a combined $442 billion of assets and a customer base of more than 10 million households. The value of mergers and acquisitions in the USA financial-services sector more than doubled to US$196.5 billion in 2018 from US$82.3 billion in 2017, EY said. They did not cite any numbers, however.
A Wachtell Lipton memo said the speed of the approvals was evidence of an "increasingly favorable regulatory environment for bank M&A".
"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. To that end, an innovation and technology center will be based in Charlotte.
The combined company will be based in Charlotte and operate under a new name but continue to have operations in Winston-Salem and Atlanta.More news: Health officials say 5 cases of measles confirmed in Texas
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When the two Southern banks are combined, the new company will serve more than 10 million US households, with approximately $442 billion in assets, $301 billion in loans, and $324 billion in deposits, according to a joint news release detailing the plan. But even U.S. Bank with $456 billion in assets is dwarfed by the next largest institution, Citigroup, which has more than $1.4 trillion in assets. More broadly, he argues, "the deal represents an acknowledgment of the growing need for scale in the United States banking business".
Big bank mergers had been nonexistent after the financial crisis, when a flurry of government-directed mergers created a handful of megabanks.
Southern banking giants BB&T and SunTrust announced they would merge in a $66 billion deal, the first big bank merger since the chaos of the 2008 financial crisis. In 2015, it deepened its local roots by opening a regional headquarters in SouthPark.
The transaction will deliver at least US$1.6 billion in annual cost savings by 2022, the companies said. "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".
BB&T has agreed to pay US$28.1 billion for SunTrust's equity as of Wednesday's closing price, according to data compiled by Bloomberg. "We spend $10 billion a year on technology".