SunTrust/BB&T: Community groups reviewing merger
08 February 2019 - 12:00 am UTC
Two community advocacy groups are in early discussions about the potential impact of BB&T [NYSE:BBT] and SunTrust Banks’ [NYSE:STI] proposed merger and plan to engage with the banks, leaders of the two groups said.
This week Winston-Salem, North Carolina-based BB&T and Atlanta, Georgia-based SunTrust announced the largest bank merger since the financial crisis in an all-stock deal that would create the sixth largest US bank based on assets and deposits.
The banks expect to rationalize their branch networks across the Southeast and Mid-Atlantic as part of the deal, which is expected to close in 4Q19. BB&T CEO Kelly King said the combined institutions will have more resources to invest in technology to better serve customers.
Peter Skillern, executive director of the Reinvestment Partners, a Durham, North Carolina-based community reinvestment organization, said that his group plans to comment to federal bank regulators about the potential effects of the deal. Skillern said it was too early to say whether that comment would be in support or in opposition.
“We hope that these regional banks — as they go to a national bank — don’t forget their hometown roots,” Skillern said, noting that historically BB&T had done a “great job” lending to small businesses and encouraging community development, but he worried that the combined bank could lose its capacity and commitment to investing in those programs.
SunTrust has received a “Satisfactory” Community Reinvestment Act rating from the Federal Reserve Bank of Atlanta, according to its website. On 19 June, BB&T stated that it had received an “Outstanding” CRA rating from the FDIC. CRA ratings are based on how well banks serve the credit needs of communities.
Members of the public can submit comments to federal regulators regarding proposed bank merges and regulators typically acknowledge the responses as part of the review process. Comments from community groups typically focus on institutions’ compliance with the CRA, which requires banks to lend to low-to-moderate income neighborhoods.
Jesse Van Tol, the chief executive officer of the National Community Reinvestment Coalition (NCRC), an umbrella organization for community groups across the US, said groups are in dialogue about the banks’ future commitments and are taking a wait-and-see approach to the merger.
BB&T said the merger will allow it to have even more of a positive impact on communities. SunTrust said it has a strong track record of serving low and moderate income clients.
by Kevin McCaffrey
