Everyone knew BB&T CEO Kelly King, 70, would go out with a bang — man, did he come through. Creating a merger of equals with SunTrust Banks — the biggest U.S. bank deal in a decade — is a capstone to King’s 47-year career at the company, which Alpheus Branch started in Wilson in 1872. When BB&T moved to Winston-Salem upon its 1995 merger with Southern National Bank, it had about $10 billion in assets. Pending completion of the SunTrust deal, the combined bank will have more than $440 billion — a 44-fold increase in 24 years.
Mergers of equals are often viewed dubiously, though King insists this one is the real deal. While BB&T’s vaunted corporate culture will continue to be emphasized, the 14-member senior management team and the board of directors will be equally split between the two companies. SunTrust’s David Ratcliffe, a former CEO at electric utility Southern Co., will be lead director. King will be CEO and chairman until September 2021, then William “Bill” Rogers Jr., 61, the CEO of SunTrust and a UNC Chapel Hill graduate, will take over.
Waiting in the wings are BB&T President Chris Henson, 57, who had a stint as BB&T’s Atlanta region president, and SunTrust Co-Chief Operating Officer Hugh “Beau” Cumming III, 56, a former Bank of America executive. SunTrust’s other co-chief operating officer, Mark Chancy, is not part of the combined leadership. BB&T shareholders will control 57% of shares.
Creating an equal merger requires a new headquarters city, which should pay off nicely for Charlotte. Rogers told employees the merger will allow for an additional $100 million in digital efforts, boosting Charlotte’s increasing reputation as a financial-technology hotbed.
The move stings Winston-Salem and Atlanta, where a SunTrust predecessor started in 1891, though King insists employment can grow, particularly if the combination pays off in greater market share versus the five larger U.S. banks: Bank of America, Citigroup, JPMorgan Chase, US Bancorp and Wells Fargo. Winston-Salem will be the center for community banking, while the wholesale operation will be based in Atlanta.
“As our company grows and prospers, we’ll see gainful employment increases in Charlotte, Winston-Salem and Atlanta,” King told The Winston-Salem Journal.
BB&T says it expects to recoup combined savings of $1.6 billion, a big chunk of which will come from closing duplicative branches. SunTrust has 1,034 offices within 5 miles of a BB&T office, and closing them would cut real estate and personnel costs by $700 million annually, Morgan Stanley analyst Betsy Graseck reported. BB&T, which employs about 35,500, has already trimmed its branch network by 14% since 2017.
Industry analysts expect the merger to kick off a series of combinations, possibly including regional rivals Fifth Third Bancorp, Regions Financial and Capital One Financial.