ATLANTA (AP) — Southern regional banks BB&T and SunTrust are combining in an all-stock deal to create a new bank valued at about $66 billion.
The banks said Thursday that the combined company will be the sixth-largest U.S. bank based on assets and deposits. It will have approximately $442 billion in assets, $301 billion in loans and $324 billion in deposits serving more than 10 million households.
Regional banks can be a bellwether for local economies and the willingness to pursue a deal of this size can be taken as a signal of optimism. The U.S. economy was sizzling in last year. The Commerce Department estimated last month that the economy, as measured by the gross domestic product, grew at a brisk 3.4 percent annual percent rate in the July-September quarter
“It’s an extraordinarily attractive financial proposition that provides the scale needed to compete and win in the rapidly evolving world of financial services,” BB&T Chairman and CEO Kelly King said in a prepared statement.
The combined company will be based in Charlotte, North Carolina, its board and management evenly split between BB&T Corp. and SunTrust Banks Inc. A new name will be chosen before the deal closes in the fourth quarter.
The combined company will keep a community banking center in Winston-Salem, North Carolina, where BB&T is based. It will keep a wholesale banking center in Atlanta, where SunTrust has its headquarters.
SunTrust shareholders will receive 1.295 shares of BB&T for each share they own. BB&T shareholders will own about 57 percent and SunTrust shareholders will own the rest. SunTrust shareholders will receive a 5 percent increase in their dividend once the deal is complete.
Shares of SunTrust climbed 5.6 percent before the market open, while BB&T’s stock rose slightly.
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