Regional banking companies SunTrust Banks and BB&T Corporation announced on Thursday they will be merging in a $66 billion deal that will result in a single bank—poised to become the sixth largest in the country.
A new name is yet to be determined. The combined entity will have $442 billion in assets, $301 billion in loans, and $324 billion in deposits and serve more than 10 million households.
Both boards voted unanimously in favor. The merger is expected to close in the last quarter of 2019, assuming regularly approval is granted.
The combined bank is expected to save $1.6 billion in operating costs annually by 2022. Savings will come from facilities, IT systems, shared service, retail banking, and third-party vendors. There is no mention of how many jobs may be cut through overlap.
That’s a change from recent history. SunTrust shares have been down about 10% over the past year, while BB&T had lost almost 5% during the same time.
BB&T Chairman and chief executive officer Kelly King called the deal a “true merger of equals” in prepared remarks. King will serve as chairman and CEO of the new entity through September 21, 2021 and then become executive chairman only until March 12, 2022.
SunTrust chairman and CEO William Rogers will serve as president and chief operating officer, then become CEO to replace King, finally adding the chairman title in March 2022.
BB&T shareholders will own 57% of the new entity, while those of SunTrust receive 43%. SunTrust shareholders will gain just under 1.3 shares of BB&T for each share SunTrust share they own.