On the eve of Friday’s debut of Truist Financial Corp., a picture of its potential financial prowess was disclosed Tuesday by the combining banks.
BB&T Corp. and SunTrust Banks Inc. announced on Feb. 7 that they would form the nation’s sixth-largest traditional bank through BB&T’s $30.3 billion purchase of SunTrust. BB&T shareholders will own 57% of Truist.
Truist’s headquarters will be in Charlotte, though Winston-Salem will retain the community-banking/retail branch operations and Atlanta will keep SunTrust’s corporate and investment-banking operations.
The banks have said they plan to reveal more Truist details, such as signage and its logo, closer to completion of the deal.
As of Sept. 30, Truist would have had $463.7 billion in combined total assets. Truist’s market capitalization was $72.96 billion as of Tuesday.
BB&T listed in a regulatory filing Tuesday that a combined Truist would have had $5.96 billion in fiscal 2018 net income — representing $3.06 billion from BB&T, $2.67 billion from SunTrust and $227 million in pro forma adjustments.
Combined diluted earnings per share would have been $4.36, compared with $3.91 for BB&T and $5.74 for SunTrust.
For the third quarter of fiscal 2019, BB&T reported $735 million in net income, down 6.8% from a year ago. Adjusted net income was $832 million.
BB&T took two primary charges related to the pending deal: $40 million after-tax in operating expenses and $26 million after-tax in direct merger and restructuring charges.
For SunTrust, it had third-quarter net income of $597 million, down 17.7%. It had after-tax merger-related charges of $33 million.
By closing the megadeal Friday, BB&T will gain 25 days of SunTrust revenue for the fourth quarter, which analysts said could help offset integration costs once that process is fully ramped up.
A combined Truist would have had $12.76 billion in loan revenue and $8.22 billion in fee revenue.
The biggest fee revenue difference is BB&T having $1.85 billion in insurance revenue while SunTrust had none. BB&T’s insurance agency and brokerage network is the fifth largest in the United States and sixth largest in the world.
Truist is expected to serve more than 10 million households in what would become a 17-state Southeast and mid-Atlantic territory anchored by Florida, Georgia, North Carolina and Virginia.
The banks have said it could take up to 24 months after closing to integrate the operating systems, including branch networks. It is projected to be the largest bank integration since Wells Fargo & Co. acquired Wachovia Corp. in December 2008, which involved $1.4 trillion in total assets.
Analysts say it is likely the banks will save the Carolinas, Georgia and Virginia for last, which could be the fall of 2021.
Kelly King, BB&T’s chairman and chief executive, will serve in the same roles with Truist through Sept. 12, 2021 — his 73rd birthday. King then would become executive chairman for six months before stepping down from that role on March 12, 2022.
William Rogers Sr., SunTrust’s chairman and chief executive, would succeed King as Truist’s CEO and chairman when King retires.
“We’ve learned over the years with all of the mergers we’ve done that you can do almost all of the planning work pre-closing so that when you actually close, you go into immediate execution,” King said.
The banks project at least 2,000 jobs in Charlotte.
“The new headquarters in Charlotte will be home to the combined company’s executive management team and accommodate leadership teams for groups including corporate communications, finance, human resources, insurance, legal, technology and risk management,” BB&T spokesman Brian Davis said.
“Charlotte also will be home to the new company’s Innovation and Technology Center. That transition will happen over time through 2020, depending on the individual business unit,” Davis said.