Nine SunTrust Banks Inc. branches in the Triad will be sold to First Horizon National Corp. to secure U.S. Justice Department regulatory approval of the proposed Truist Financial Corp.
BB&T Corp. and SunTrust must receive approval from Justice, Federal Deposit Insurance Corp. and Federal Reserve to complete the $30.4 billion megadeal they announced in February.
The Justice approval addresses anti-trust concerns.
The Winston-Salem branches affected by the divestiture are at 2006 S. Hawthorne Road, 2801 Reynolda Road, 101 S. Stratford Road, and 4306 N. Liberty St.
The other five branches are: 5361 U.S. 158 in Bermuda Run; 1000 S. Main St. in Kernersville; 880 Yadkinville Road in Mocksville; 2820 Old Hollow Road in Walkertown; and 200 S. State St. in Yadkinville.
With the transaction, First Horizon would go from four to eight branches in Winston-Salem and from six to 11 in Forsyth County.
SunTrust was required by Justice to divest 28 SunTrust branches in North Carolina, Georgia and Virginia that represented a combined $2.3 billion in deposits.
The banks said separately First Horizon is gaining 30 branches and $2.4 billion in deposits from SunTrust.
The divested assets will include all deposits and loans associated with the branches. First Horizon, based in Memphis, Tenn., is expected to take over the branches in early 2020.
“We are committed to working with First Horizon to ensure a smooth transition for these clients following the close of the divestiture,” SunTrust spokeswoman Sue Mallino said when asked what those SunTrust branch customers are required to do to remain a SunTrust customer or become one of Truist.
BB&T and SunTrust have said they expect to close on the megadeal and start the integration of Truist by the end of the year, although acknowledging it could take into early 2020.
“This announcement marks another significant and required step” in the formation of Truist, said Kelly King, BB&T’s chairman and chief executive, who will have the same titles with Truist.
King told analysts on Oct. 16 that “we believe we are still on track for closing in the fourth quarter, but we can’t guarantee that ... because it is out of our control.”
The banks gained approval for the merger from the N.C. Commissioner of Banks on July 10 and near unanimous approval from their respective shareholders July 30.
“The next step is approval of our divestment plan by (U.S. Justice Department) and then we believe the remaining regulatory approvals will follow,” King told analysts.
BB&T and SunTrust said they had at least 740 branches within a two-mile radius of each other, with the majority likely to be consolidated into one branch or divested as in the First Horizon transaction.
Justice officials said in a statement the divestiture constitutes the largest divestiture in a bank merger in more than a decade — not surprising given the megadeal would be the largest since the Great Recession of 2008-11 and form the sixth-largest U.S. bank at $463.7 billion in total assets.
The other metro markets affected by the SunTrust branch divestiture are in Durham-Chapel Hill, Eastern Shore, Va., Patrick County, Va. Franklin County, Va., Henry County/city of Martinsville, Va., and Lumpkin County, Ga.
“Banks and the financial sector are at the heart of our economy,” Makan Delrahim, Justice’s assistant attorney general for its antitrust division, said in a statement.
“Today’s settlement ensures that banking customers across Virginia, North Carolina, and Georgia will continue to have access to competitively priced banking products, including loans to small businesses, while preserving the investments in innovation and technology this merger is expected to generate.”
First Horizon plans to keep all SunTrust employees in the branches.
“First Horizon is excited to welcome new employees and customers to our family,” Bryan Jordan, First Horizon’s chairman and chief executive, said in a statement.
“We look forward to working with BB&T and SunTrust to design a seamless onboarding experience.”
Bill Rogers, SunTrust’s chairman and chief executive, said the bank “is pleased to have found a buyer that will retain the jobs of talented teammates and continue to foster the strong client relationships we have established in these branches.” Rogers would serve as Truist’s president at completion of the megadeal.
BB&T shareholders would own 57% of Truist. The combined bank would have its headquarters in Charlotte, with its community-banking division based in Winston-Salem and its wholesale-banking division in Atlanta.
The banks say it could take 12 to 24 months after closing to integrate the operating systems, including branch networks. Truist would have a presence in 17 states, stretching from Pennsylvania and New Jersey to Texas, but foremost in the Southeast.
King said Feb. 7, when the deal was announced, that “if you are a client-facing associate and doing a good job, then your job is assured.”
The reality is the Triad will lose several hundred BB&T corporate-headquarters jobs to Charlotte, along with the entire executive-management team moving there as a result of the merger.
Winston-Salem would probably keep thousands of community bank and other affiliated jobs, likely moving similar SunTrust jobs here as BB&T wholesale-banking jobs go to Atlanta.