CHARLOTTE, N.C. — Southern regional banks BB&T and SunTrust announced Thursday morning they will merge, creating the sixth-largest bank in the country, based on assets and deposits.
The merger is worth about $66 billion in stocks.
In a statement video released Thursday, the CEOs of the two banks said they share very similar cultures and would be a good fit.
"We know that, individually, SunTrust and BB&T, they’re just incredibly strong institutions, but together we’re going to be even better," said SunTrust chairmain and CEO William H. Rogers Jr.
"We really will be fantastic," said BB&T Chairman and CEO Kelly S. King.
The bank will have approximately $442 billion in assets, $301 billion in loans and $324 billion in deposits and will serve more than 10 million households.
Between them, the two banks, they also have more than 60,000 employees, so the merger will make it the sixth-biggest bank in the country.
In the Charlotte region, the two banks have more than 100 branches and 2,500 employees.
City Council member Greg Phipps said the new bank will bring jobs and money that will filter down to the neighborhoods he represents in east Charlotte.
"This really solidifies our banking presence back to its premier days," Phipps said. "They're talking about this being a digital hub, so that's like a new, dynamic entry into the banking foray."
It is not clear at this time how many jobs will be coming to Charlotte or where the corporate headquarters will be located.
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The combined company will operate under a new name and be headquartered in Charlotte, its board and management evenly split between BB&T Corp. and SunTrust Banks Inc. A new name will be chosen before the deal closes.
"Our corporate headquarters will be in Charlotte, North Carolina, and it's going to include a new information and technology center, which I'm really excited about," Rogers said.
We first updated WSOCTV news app users with a notification just before 6:45 a.m. Thursday about the merger and how it will impact the Queen City.
Download the WSOCTV news app for your smartphone and get updates on this developing story as they come in.
The new company will still maintain significant operations and investment in Winston-Salem and Atlanta.
The board of directors of both banks unanimously approved the deal.
"This is a true merger of equals, combining the best of both companies to create the premier financial institution of the future," said King. "It's an extraordinarily attractive financial proposition that provides the scale needed to compete and win in the rapidly evolving world of financial services. 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."
Currently, both BB&T, as well as SunTrust, have dozens of branches in the Charlotte area. BB&T is the city's third-largest bank, employing thousands of people.
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The deal is subject to regulators’ approval, but if all goes well, it should close by the end of the year.
Rogers said, "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. With our geographic position, enhanced scale and leading financial profile, these two companies will achieve substantially more for clients, teammates, associates, communities and shareholders than we could alone. I have tremendous respect for Kelly, his leadership team and the BB&T associates. We will leverage our respective strengths as we focus together on the future."
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 about 43 percent of the business.
“Huge impact,” said Ernie Riegel, interim president of the Charlotte Regional Business Alliance. “It’s a validation of what Charlotte and the region is about.”
Charlotte Regional Business Alliance’s figures underscore just how important banking, and the merger, is for the region.
About 82,000 people work in the finance business in the region, making up 5 percent of the workforce and 12 percent of the payroll.
In other words, most finance jobs pay very well and that money filters down to a lot of different areas, creating even more opportunities for other industries to grow.
Of course, most growing comes with pains.
Many want to know how the merger could change the community.
Possible impacts include the fact that more workers mean more traffic, and Charlotte roads are already seeing thousands of additional drivers every year, and are struggling to keep up.
As bankers bring their families with them, they will have to find schools, and many in the fast-growing and affluent communities are already overcrowded, including Matthews, Mint Hill and Huntersville.
So, could home prices spike?
The last big banking merger in Charlotte happened in 1998 when NationsBank bought Bank of America.
Since then, the Charlotte Regional Realtor Association said that the average sale price of homes in Charlotte has almost doubled.
More well-paid bankers could put more of a strain on our affordable housing crisis.
So managing the future on those big banking shoulders will be a balancing act.
“There’s always something people have to work through, but I think the upside is so great that eventually anything that falls out will be completely taken care of,” Riegel said.