BB&T, SunTrust Still Grapple With Name Game -- WSJ
April 19 2019 - 3:02AM
Dow Jones News
By Allison Prang
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (April 19, 2019).
In the two months since announcing the largest bank deal since
the financial crisis, BB&T Corp. and SunTrust Banks Inc.
leaders have sought to sort out the kinks that can sometimes
complicate combinations.
BB&T Chief Executive Kelly King said on Thursday that the
banks' leadership teams have met weekly and are working to merge
the two cultures and retain employees.
Integration leaders have also been appointed for different
functions and businesses. He said few associates have left so
far.
"We're not taking anything for granted and we're not expecting
our associates to just line up and be good soldiers," Mr. King
said.
"I know we've got to work on our fist bumping," he joked. "We've
been practicing that."
Mr. King said that BB&T expects to reveal the combined
company's new name late in the current quarter.
The Federal Deposit Insurance Corporation and the Federal
Reserve Board are holding their public meetings this month and next
month and the two companies are going to submit their stress test
and joint capital plan next month, he said.
BB&T also said Thursday that the Federal Reserve terminated
a 2017 cease-and-desist order related to alleged deficiencies in
its anti-money-laundering controls. In June, the FDIC and the North
Carolina Office of the Commissioner of Banks terminated a similar
order.
Shareholders are expected to vote on the deal, which has been
valued at $28.2 billion, early in the third quarter. Together,
BB&T and SunTrust would become the sixth largest retail bank in
the country. A large reason for the deal is to be able to scale
more with technology.
The companies expect to trim $1.6 billion in costs from their
combined operations.
Given the overlap that BB&T, based in Winston-Salem, N.C.,
and SunTrust, based in Atlanta, have in their branch networks --
approximately 740 of the locations are within a couple of miles of
one another -- a large amount of those cost savings would likely
come from branch closures.
Both SunTrust and BB&T reported first-quarter results before
the market opened Thursday. Profit rose slightly at BB&T Corp.
but fell at SunTrust Banks Inc. in the first quarter, as both
regional banking firms recorded merger-related expenses ahead of
combining their operations.
BB&T's profit rose 0.5% to $792 million in the quarter that
ended in March, compared with the first quarter a year earlier.
Earnings per share were 97 cents, up from 94 cents a share.
Analysts polled by Refinitiv were expecting earnings of $1.03 a
share.
The company said it had $80 million in merger and
restructuring-related charges. BB&T reported adjusted earnings,
which excludes those charges, of $1.05 a share. Analysts were still
expecting $1.03 a share.
At SunTrust, profit fell 9.8% to $580 million. SunTrust reported
earnings of $1.24 a share, down from $1.29 a share. Analysts were
expecting $1.30 a share.
SunTrust said it had $45 million in merger-related costs, or 9
cents a share.
Total taxable-equivalent revenue at BB&T rose 3% to $2.92
billion, slightly less than analysts anticipated. Both net interest
income and noninterest income rose.
At SunTrust, fully taxable equivalent revenue rose 4.2% to $2.35
billion, which beat estimates from analysts. Net interest income
rose and noninterest income fell.
BB&T shares fell 1.3% on Thursday, while SunTrust shares
were down 1.1%.
Write to Allison Prang at allison.prang@wsj.com
(END) Dow Jones Newswires
April 19, 2019 02:47 ET (06:47 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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