United States Bank Mergers & Acquisitions (BB&T)

 

A BB&T office in Greensboro, North Carolina. 

Photo credit: Warren LeMay. You can see more of his photos via this link: https://www.flickr.com/photos/warrenlemay

BB&T (Branch Banking & Trust)

BB&T traces its origins to eastern North Carolina in the aftermath of the American Civil War (1861 to 1865) during which the area was struggling to recover and rebuild from the devastation of four years of bloody fighting between the Union and Confederacy forces. Countless lives were lost, and the livelihoods of those who survived were often ruined. Many families were physically and emotionally torn across both geographical and ideological battle lines. The economy, along with many farms and towns, and businesses and homes suffered catastrophic damages. The end of the Civil War unfortunately did not mean the end of the divisiveness, distrust and political and personal resentments.

Against, or perhaps one should say despite this hardship, Alpheus Branch, the son of a wealthy planter in Halifax County, moved to Wilson County and eventually married Nannie Barnes, the daughter of prominent figure General Joshua Barnes and one of Wilson’s early founders. Alpheus Branch launched a mercantile business called Branch & Co. and he became acquainted with Thomas Jefferson Hadley, another important local leader. In 1872, Alpheus Branch and Thomas Jefferson Hadley joined forces and launched a private bank named Branch & Hadley. The new concern accepted deposits and made loans to local planters and businesses. The U.S. Southeast by the 1880s had returned to rising prosperity, as the traditional crop of cotton was supplemented by the new cash crop of tobacco. In 1887, Mr. Branch bought out his partner’s interests and Branch & Hadley became Branch & Co., Bankers.

Then in 1889, Alpheus Branch, his father-in-law Gen. Joshua Barnes, Branch’s old business partner Thomas Jefferson Hadley, along with J.F. Bruton, R. L. Thompson and Walter Brodie were granted a state charter from the North Carolina legislature to establish the Wilson Banking & Trust Co. The original intention of the new business was to offer banking, trustee and custodian services but a legislation change prevented the banking concern from actually carrying out its trust business until 1907.

Meanwhile, Alpheus Branch had died in 1893 and in 1900, his private bank Branch & Co., Bankers was incorporated into the Branch Banking Co., holder of the state charter and successor to the Wilson Banking & Trust Co. following two name changes. In 1913 – some six years after the launch of the trust services, Branch Banking Co. changed its name to Branch Banking & Trust Co., or BB&T for short.

In comparison with Europe, mainland United States escaped World War I physically unscathed and enjoyed a booming economy in the 1910s and 1920s. During this time, Branch Banking & Trust earned the reputation as one of the larger and stronger banks in North Carolina. The bank also expanded into the insurance and mortgage loan markets in 1922 and 1923 respectively.

When America’s over exuberance collapsed in 1929, the ensuing stock market crash and Great Depression caught many ordinary people and businesses big and small off-guard. Between January 1930 and January 1932 alone, well over 100 banks in North Carolina went bankrupt when their borrowers defaulted on their loans. As panics set in, bank runs saw the public transferring their deposits from Wilson’s seven other banks to the government-run United States Postal Savings System. What many didn’t know was that the postal savings system was not a bank on its own per se, but simply re-deposited the funds to designated banks. In Wilson County’s case, the postal savings’ banker was none other than Branch Banking & Trust. Thus, while Wilson’s other banks collapsed, BB&T enjoyed the confidence of government officials and remained financially healthy. As a matter of fact, as hundreds of banks failed in North Carolina between 1929 and 1933, BB&T’s network grew from five to eleven branches, and total assets increased almost threefold. 

The 1930s slump then came to an abrupt end when World War II broke out in 1939, as wartime demand for military machinery and foods trumped other concerns. Notwithstanding its massive tolls to lives, properties and the environment elsewhere, the global conflict lifted the American economy, employment and prosperity. A combination of patriotism and war-time restrictions on the production of non-war-related civilian consumer goods also caused personal savings to rise steadily, as things were just generally not available for sale. When peace returned in 1945, the returning soldiers and a massive influx of immigrants from war-torn Europe and other parts of the world to the U.S. led to a sharp increase in the demand for consumer goods, automobiles, machinery, infrastructure construction, housing, food staples, and consumer and business services – in other words – everything.

BB&T rode on this unprecedented post-WWII growth and the height of the so-called “American century” so that by the end of the 1960s, it ran a network of 60 branches in 35 cities in North Carolina. Legislative changes in the 1980s and 1990s slowly loosened up inter-state banking restrictions in the U.S., and by 1994, BB&T’s network numbered over 260 branches across both North and South Carolina. By this time, BB&T was the fourth largest bank in its home state.

In late 1994, BB&T Financial Corp. and Winston-Salem-based Southern National Corp. (fifth largest bank in North Carolina) agreed to merge in a deal that was valued at USD $2.2-billion. The combined bank became the largest bank in terms of deposits in North Carolina and the No. 3 in South Carolina with over 430 branches, including a small operation in Virginia. This merger also led to the new bank transferring its headquarters from Wilson to Winston-Salem, the home base of Southern National Corp. In 1996, Southern National took over United Carolina Bancshares Corp. for USD $985-million. United Carolina had a network of 153 branches across North and South Carolinas. The following year, Southern National resurrected and renamed itself BB&T Corp.

During the rest of the 1990s and the early 2000s, BB&T continued to expand outside of its stronghold in the Carolinas, buying up numerous regional and community banks one by one but yet building up an ever-increasing presence in Virginia, West Virginia, Maryland, Washington DC, Georgia and Tennessee. Some of the more significant takeovers (those valued at at least USD $200-million, or those that represented entry to a new market) are listed below.

Recent transactions:

• Between December 1997 and February 1998, BB&T bought Franklin Bancorporation of Washington, D.C. (for USD $165-million) and Maryland Federal Bancorp (USD $265-million). This marked BB&T’s first forays into the wealthy capital city area.
• In August 1998, BB&T acquired two financial institutions in Virginia: MainStreet Financial Corp. of Martinsville for USD $554-million and stockbroker Scott & Stringfellow Financial Inc. of Richmond for USD $131-million. MainStreet operated 46 branches in Virginia and three in Maryland.
• In January 1999, BB&T bought Mason-Dixon Bancshares Inc. of Westminster in Maryland for USD $257-million. The bank had 38 offices in the state.
• Also in January 1999, BB&T took over First Citizens Corp. of Newnan for USD $126-million. While the transaction was small, it became BB&T’s first entry into the state of Georgia with a network of 14 offices in south metropolitan Atlanta.
• In April 1999, BB&T purchased First Liberty Financial Corp. of Macon for USD $500-million. The purchase gave BB&T a network of 52 branches in the Macon and Savannah areas of Georgia.
• In what was its third acquisitions in Georgia in 1999, BB&T took over Premier Bancshares Inc. for USD $624-million in July. Premier had 42 branches in Atlanta and Northern Georgia.
• In July 2000, BB&T acquired FCNB Corp. of Frederick for USD $226-million. FCNB ran 34 offices in the central Maryland-Washington, D.C. corridor.
• Also in July 2000, BB&T purchased One Valley Bancorp Inc. of Charleston for USD $1.13-billion. The acquisition gave BB&T a network of 77 branches in West Virginia and another 48 in Virginia.
• In August 2000, BB&T took over BankFirst Corp. of Knoxville for USD $150-million. The small purchase was BB&T’s first entry into the state of Tennessee.
• In June 2001, BB&T bought Century South Banks Inc. of Alpharetta for USD $467-million. In doing so BB&T gained 40 offices in Georgia, North Carolina, Tennessee and Alabama.
• In August 2001, BB&T took over F&M National Corp. of Winchester. The holding company operated 174 branches and offices providing banking, mortgage, insurance and trust services in the Historic Triangle area of Virginia, Richmond and the metropolitan Washington, D.C. area.
• In November 2001, BB&T acquired MidAmerica Bancorp of Louisville in Kentucky for USD $415-million. MidAmerica operated 30 branches mainly through its Bank of Louisville subsidiary.
• Also in November 2001, BB&T took over AREA Bancshares Corp. for USD $451-million. AREA had 72 branches in Kentucky.
• In May 2002, BB&T bought Regional Financial Corp. (First South Bank) of Tallahassee for USD $275-million. First South Bank operated 22 offices in Tallahassee and the Florida Panhandle, Jacksonville, and along the Gulf Coast from Beverly Hills to Naples.
• In January 2003, BB&T made a big expansion in Virginia when it acquired First Virginia Banks Inc. for USD $3.38-billion. First Virginia’s subsidiaries operated 364 branches in total: 298 in Virginia, 55 in Maryland and 11 in northeast Tennessee.
• In April 2004, BB&T took over Republic Bancshares Inc. St. Petersburg for USD $392-million, gaining a network of 71 branches in Southeast Florida.
• In December 2005, BB&T acquired Main Street Banks Inc. of Atlanta for USD $623-million. Main Street Banks had 29 banking and insurance offices in Atlanta and Athens, Georgia.
• In December 2006, BB&T took over Coastal Financial Corporation of Myrtle Beach for USD $395-million. It had 17 branches in greater Myrtle Beach and seven in greater Wilmington, South Carolina.
• In June 2009, BB&T repaid the U.S. government the USD $3.1-billion that it received under the Troubled Asset Relief Program (TARP) after regulators determined the bank was well capitalized.
• In August 2009 during the global credit crisis that started in 2008, Colonial Bank of Montgomery failed and was shut down by the Alabama State Banking Department and the Federal Deposit Insurance Corporation (FDIC). In a brokered agreement with the FDIC, BB&T took control of all Colonial Bank’s 346 branches and USD $20-billion of client deposits in Alabama, Florida, Georgia, Nevada and Texas. The FDIC and BB&T agreed to share losses on about $15 billion of those assets.
• In February 2019, Winston-Salem-based (North Carolina) BB&T agreed to acquire SunTrust Banks, Inc. for USD $28.24-billion in stock. Announced as a “merger of equals”, the former BB&T shareholders would control 57% of the new bank, with SunTrust holders owning the rest. The new bank would be known as Truist Financial (pronounced “True-ist”), the unusual choice of which was mocked by many after the announcement. Truist would become the No. 6 bank in the U.S. and move its headquarters to Charlotte, but Winston-Salem would become the bank's headquarters for community banking. At the time of the merger announcement, SunTrust had about 1,300 branches and BB&T about 1,800 branches. A major consolidation of the branch network was expected.

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United States Bank Mergers & Acquisitions (SunTrust Banks)

Photograph by Michael Gluzman. 

Photo: A blimp branded with SunTrust advertisement seen flying high above Atlanta. Special thanks to Michael Gluzman for granting me the permission to use his image.

SunTrust Banks was formed in 1985 when the Trust Co. of Georgia and Florida’s SunBanks merged – the former traces its origins to 1891 when the Commercial Travelers Savings Bank was founded in Atlanta by businessman Joel Hurt. Two years later, Mr. Hurt and another member of the board Ernest Woodruff spurred the re-organization of the bank into the Trust Co. of Georgia to better reflect its main business lines: trust and investment banking. This name would pretty much remain in use for the next 100 years. Though locally, the financial institution was often known simply as “the Trust Company”.

Mr. Woodruff would rise to the president of the Trust Company in 1904, and under his leadership the Trust Company brokered the consolidations of numerous companies and industries, establishing its position as a prominent player in the merchant banking and investment banking business in Atlanta.

Then in 1919, Mr. Woodruff made one of the shrewdest and most storied moves in corporate America’s history when he led a consortium to purchase The Coca-Cola Company from formula patent holder Asa G. Candler for USD $25-million. Later in that same year, the Trust Company underwrote the partial flotation of The Coca-Cola Co. In return, the Trust Company received USD $110,000 (in 1919 dollars) worth of Coca-Cola shares that it held for decades. That transaction cemented the close ties between the two Atlanta institutions for the decades to come. Until 2011, the only hand-written formula recipe of the carbonated brown syrup the world has known and tasted for over 100 years was stored in a secured vault in SunTrust Banks’ head office in Atlanta. In that year, the recipe was transferred to a vault in the World of Coca-Cola, which (the vault, not the recipe) is now on public display. The Trust Co. of Georgia (and later SunTrust) also held a stake in the Coca-Cola Co. until 2012.

The 1920s was an interesting decade for the predecessor banks that became SunTrust. Back in the early years of the Trust Company, a certain Colonel Robert James Lowry had been its president, but he left in 1895 to tend to his own bank Lowry Bank. In 1907, Lowry National Bank, by then having obtained a national charter, acquired the commercial banking operations of the Trust Company, rendering the latter once again as a pure trust company. In exchange, the Trust Company received 2,000 shares of Lowry National Bank. Then in 1923, the Trust Company combined with Lowry National and gave up the latter’s national charter, and the new entity adopted the name Lowry Bank & Trust Co. of Georgia and became a state-chartered bank again.

Just one year later, a complex three-way reorganization was carried out involving Lowry Bank & Trust and Georgia’s oldest nationally-chartered bank, Atlanta National Bank: the trust business of Lowry was once again spun off and resumed the old name the Trust Co. of Georgia, while Lowry merged with Atlanta National to become Atlanta & Lowry National Bank. Initially, the shareholders of Atlanta & Lowry National also fully controlled the Trust Co. of Georgia, so both financial institutions were still closely linked. This changed in 1933 when the federal Banking Act (part of which was the so-called Glass-Steagall Act) required deposit-taking banks be separated from securities dealers, and the Trust Co. of Georgia became fully independent from the First National Bank of Atlanta, the successor bank of Atlanta & Lowry National following another merger in 1929.

During the Great Depressions of the 1930s, the Trust Company gained majority ownership of five Georgian banks outside of Atlanta – in Augusta, Columbus, Macon, Rome and Savannah. Between the 1950s and 1970s, however, a change in policy ideology led to the passing of banking regulation that witnessed Georgia having one of the most stringent “statewide banking” restrictions in the U.S. Essentially, to protect small local banks, banks based in a city or county were no longer permitted to acquire banks outside of their home turfs – in other words – banks could not cross city or county borders. This severely "boxed" Georgia's banks into their home markets until 1970. In 1971, the name Trust Company Bank and TCG Bank were adopted and when statewide banking became legal, it promptly expanded into other markets in the state.

Outside of the home state, federal legislation known as the McFadden Act (1927) and Bank Holding Company Act (1956) gave each individual state the power to prohibit “inter-state banking”, so that banks in one state could not cross the state line and operate in another state, unless the home state of the acquired bank allowed such acquisitions. The inter-state banking ban only began to be relaxed in the late 1970s, beginning in state of Maine, and very slowly spreading to other states throughout the 1980s.

In some cases, the relaxation of inter-state banking began with regional reciprocal inter-state banking agreements. In 1985, Georgia and Florida passed reciprocal interstate banking agreements allowing the banks from either state to enter each other’s jurisdiction. The relaxation started a frenzy of cross-state-line consolidations across the Southeast as banks sought to expand into neighbouring markets as well as to build up their own scale to avoid being swallowed up. In July 1985, the Trust Co. of Georgia and Orlando-based SunBanks, Inc. merged and became the first inter-state banking merger under the reciprocal agreement in the Southeast. The new parent company took the name SunTrust Banks, Inc. but the two banks remained separate legal entities for years, as full operational integration across state lines was still illegal. The newly created SunTrust banks had USD $16.3-billion of assets. Soon after, other smaller acquisitions were made.

In 1986, SunTrust entered the Tennessee for the first time by acquiring the Third National Corp. of Nashville for USD $734-million. SunTrust added Third National’s 12 banks and 134 offices in the state to its 44 banks and 480 offices in Georgia and Florida. Also in 1986, SunTrust Securities was established to expand the bank’s product line.

Following years of operating under a decentralized manner and a mishmash of separate legal subsidiaries, SunBanks in Florida, Trust Co. of Georgia and Third National in Tennessee were unified as SunTrust beginning in 1995, when nationwide banking finally became legal in most states in America.

Recent transactions:

• In 1998, SunTrust made a major move northward when it spent USD $8.6-billion to acquire Richmond-based (Virginia) Crestar Financial Corp. The purchase made SunTrust the 10^th largest bank in the country. Crestar’s 396 branches in Virginia, Maryland and the District of Columbia would join SunTrust’s 697-office network in Florida, Georgia, Tennessee and Alabama.
• Also in 1998, SunTrust spent USD $150-million to acquire Tennessee’s Securities Co., a provider of equities underwriting services.
• In 2001, SunTrust purchased the Florida network of Huntington Bancshares Inc. for USD $705-million. Already a major player in the state, the purchase bolstered SunTrust to the No. 3 bank in Florida with 59 additional branches.
• Also in 2001, SunTrust made a bold move by launching a USD $14.7-billion hostile bid for North Carolina-based Wachovia Corp. SunTrust’s offer was about $1 billion higher than the one that Wachovia had accepted from First Union Corp. However, Wachovia’s shareholders eventually opted to merge with First Union instead of with SunTrust.
• Also in 2001, SunTrust acquired institutional capital markets business Robinson-Humphrey Company from Citigroup subsidiary Salomon Smith Barney to form SunTrust Robinson Humphrey.
• In 2004, SunTrust further cemented its position in the Southeast when it took over Memphis-based National Commerce Financial Corp. for USD $6.98-billion. National Commerce Financial operated primarily as the National Bank of Commerce and Central Carolina Bank with over 460 offices in Tennessee, North and South Carolina, Mississippi, Arkansas, Georgia, Virginia, West Virginia and Alabama. The purchase made SunTrust the No. 7 bank in the U.S. and the third largest in the Southeast with just over 1,690 branches and over 2,700 ATMs.
• In 2012, partly due to more stringent federal capital requirements, SunTrust sold its remaining 59 million of the 60 million shares of The Coca-Cola Co. that it first obtained in 1919 when its predecessor Trust Co. of Georgia underwrote the carbonated drink maker’s the initial public offering. The remaining 1 million shares were donated to the SunTrust Foundation.
• In 2019, Charlotte-based (North Carolina) BB&T Corp. agreed to acquire SunTrust Banks, Inc. for USD $28.24-billion in stock. Announced as a “merger of equals”, the former BB&T shareholders would control 57% of the new bank, with SunTrust holders owning the rest, with a combined market capitalization of about USD $66-billion. The new bank would be known as Truist Financial (pronounced “True-ist”), the unusual choice of which was mocked by many after the announcement. Truist would become the No. 6 bank in the U.S. and be based in Charlotte. SunTrust had about 1,300 branches and BB&T about 1,800 branches. As 740 branches of the two banks are within two miles of each other, many of them might be consolidated within a few years.

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USA Bank Mergers & Acquisitions (Truist Financial)

Truist Financial

Truist Financial Corp. was formed in December 2019 by the merger of BB&T Corp. of Winston-Salem (North Carolina) and SunTrust Banks, Inc. of Atlanta. The merger was announced back in February 2019 and at the time valued at USD $28.24-billion in stock. Announced as a “merger of equals”, the former BB&T shareholders would control 57% of the new bank, with SunTrust holders owning the rest. The unusual choice of the name was mocked by many after the announcement. Truist would become the No. 6 bank in the U.S. and move its headquarters to Charlotte, but Winston-Salem and Atlanta would both retain some "head office" functions for certain divisions of Truist.

At the time of the merger announcement, SunTrust had about 1,300 branches and BB&T about 1,800 branches. A major consolidation of the branch network was expected.

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