BB&T, SunTrust branch sales could mark opportunity as merger nears

Dive Brief:

BB&T and SunTrust could start announcing deals to sell branches in a dozen markets throughout the Southeast in the coming weeks, as the banks seek regulator approval of the proposed $66 billion acquisition, according to American Banker.
North Carolina, Georgia, Virginia and Florida include markets where Truist, the name of the combined entity following the merger, would have the greatest concentration, according to data compiled by the Federal Reserve Bank of St. Louis.
The banks plan to divest about $1.35 billion of deposits to appease regulators, in addition to selling branches, they said.

Dive Insight:

Shareholders have already approved the acquisition, but the banks still need a green light from regulators, which could come in late December, according to an analyst with Janney Montgomery Scott.

BB&T and SunTrust have said the merger would result in 740 branches located within two miles of one another, a prospect that has drawn concern from lawmakers.

If Truist saturates some areas, it could force smaller community banks and credit unions to close, Rep. Stephen Lynch, D-MA, said during a July hearing in which BB&T Chairman and CEO Kelly King and SunTrust Chairman and CEO William Rogers testified in front of the House Financial Services Committee.

Rep. Maxine Waters, D-CA, the committee chair, expressed her fear that the merger would create a "mega-bank” that could pose a risk to the country’s financial system.

The deal would create the sixth-largest bank in the U.S., which is expected to serve 10 million households and have combined assets totaling $442 billion.

Branch and deposit divestment could present unique opportunities for nearby banks.

"If you're a bank in the geography of those two companies right now, you're going to get all sorts of opportunities from crumbs falling off the table, whether it's customers, loan officers or deposits,” Anton Schutz, senior portfolio manager for Mendon Capital Advisors Corp., told S&P Global Market Intelligence this year. "Small banks [will be able to] get better and stronger from the fallout of this deal."

Winston-Salem, North Carolina-based BB&T announced plans to acquire Atlanta-based SunTrust in February. If approved, the deal would relocate the combined Truist Bank to Charlotte, North Carolina.

Correction: In a previous version of this article, the headquarters of BB&T and SunTrust had been misidentified.