BB&T and Suntrust Receive Approval for Truist Merger
The new banking giant will have the name Truist
BB&T and Suntrust received approval for their merger of equals by the Federal Reserve System and the Federal Deposit Insurance Corporation.
The combined banks operate in Charlotte, NC. They now will hold more than $450 billion in total assets. The new bank will undergo a name change to Truist. The merger should close on December 6, 2019.
New shares will trade on the NYSE with the ticker TFC.
“We are pleased to have received regulatory approval to merge two strong companies with complementary business models and a high level of cultural alignment. We’ll be even better together for our clients, teammates, communities, and shareholders,” said BB&T Chairman and CEO Kelly King.
King will serve as chairman and CEO of Truist.
BB&T and Suntrust Merger Details
This is the largest bank merger since the credit crisis.
Until Congress raised the Systemic Important Financial Institution limits to $250 billion last year, this deal would not have been possible.
This is the first merger of larger banks since the limits increased. Investors have been watching closely to see how the regulators responded to a merger of equals of larger banks. Acquisitive banks that had hit the limit are now considering getting back in the acquisitions business after seeing the regulatory process play out in a fairly normal manner despite the size of the banks involved.
With growth limited by a languid growing economy and a very competitive banking market, the best path to earning growth for many banks has been M&A. Now that it is clear that the regulators will maintain a friendly attitude, we will see more of these larger deals completed.
Earlier this month, we saw the second-largest deal since the crisis when First Horizon National Corp. (FHN) and IBERIABANK Corporation (IBKC) announced. When it is completed, the merger will create a southeastern regional bank with over $75 billion in assets.
The relative ease with which the BB&T and SunTrust merged should spur regional bank deal making well into 2020.
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