TMIB Lite: BB&T and SunTrust – Why Merge?
By:
Sharon J. Lorman
Jeffrey P. Marsico
Richard B. Trauger, Jr.
Jill A. Pursell
Podcast Show Notes:
Our This Month In Banking (TMIB) podcast features discussion with colleagues and other industry thought leaders on interesting banking news that happened this month. TMIB will be available on the last Wednesday of every month here, and on Apple and Droid podcast apps for your listening enjoyment. Join us on your commute, at your desk or at home.
Topic: BB&T and SunTrust – Why Merge?
Start time: 1:28
On February 7, 2019, BB&T ($226 billion in assets) and SunTrust ($216 billion in assets) announced a definitive agreement to combine in an all-stock merger of equals. SunTrust stated that compelling value creation is expected for both companies’ shareholders as demonstrated by double-digit earnings per share accretion by 2021 with estimated net cost synergies of at least $1.6 billion by 2022. The combined company will operate under a new name and will be headquartered in Charlotte, NC. The pro forma company will have approximately $442 billion in assets, $301 billion in loans, and $324 billion in deposits serving more than 10 million households, with leading market share in many of the most attractive, high-growth markets in the country. Stated benefits of the merger include increased profitability and scale to drive faster technology innovations and significant cost synergies.
Both banks were profitable, had respectable earnings per share growth and dividend yields. Why merge?
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Watch for episode 39 of This Month in Banking to be released on Wednesday, March 27, 2019. We release a full episode plus a lite episode on the last Wednesday of every month.
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