STI/BBT: Federal, State Bank Regulators Hold First Public Meeting

Relevant Documents:
April 25 Public Meeting Agenda
SunTrust, BB&T Press Release

Takeaways
 

• The Federal Reserve, FDIC, and bank regulators from Georgia and North Carolina today, April 25, held the first of two public meetings on the proposed merger of SunTrust and BB&T, the largest banking combination in the U.S. since the 2008 financial crisis. Today’s meeting was held in Charlotte and the second meeting will be held May 3 in Atlanta.
• Neither the fact of the meeting nor the comments presented today indicate any risk to ultimate regulatory approval of the deal.
• The forum is more akin to a spoken comment file than a hearing. The meeting was presided over by career staff of the Fed and FDIC and no questions or comments are allowed. Speakers are also not allowed to interact with each other. The focus of the meeting was to receive comments on the two banks’ community reinvestment programs.
• Both bank CEOs spoke on the opening panel; only one national group, the National Community Reinvestment Coalition was scheduled to participate. Other organizations speaking during the eight-hour meeting generally represented local organizations, or local branches of national groups.
• SunTrust and BB&T executives strongly defended their banks’ community lending record during their 30-minute presentation.

The Federal Reserve and FDIC today, April 25, held the first of two joint public meetings to receive comments about the proposed merger between SunTrust Bank and BB&T Corp. The pending deal is the largest bank combination in the U.S. since the onset of the financial crisis in 2008.

Neither the fact that the regulators are holding the hearings, nor the comments presented today, indicate regulatory risk to the deal closing by the end of 2019.

The meeting was presided over by two senior, career staff from the Fed and FDIC, respectively. The banking commissioners from both Georgia and North Carolina also attend the meeting. Questions and comments to witnesses are not permitted, nor is interaction between witness panels allowed.

SunTrust CEO William Rogers and BB&T CEO Kelly King spoke first and were accompanied by their respective institutions’ lead community investment executives. The Community Reinvestment Act, or CRA, requires depository institutions to demonstrate their lending in low-and-moderate income communities within their service territories. The banks’ examination grades under the act are a factor in both the FDIC and Fed’s merger reviews and was the principal focus of comments at today’s meeting. Both banks have CRA ratings well above the threshold needed for regulatory approval.

The overwhelming majority of witnesses scheduled to speak represent community and other organizations with local or parochial interests. Jesse Van Tul, CEO of the National Community Reinvestment Coalition, a well known national umbrella group for community and activist organizations, was one of the few witnesses speaking from a national perspective.

The transcript of the meeting will be made part of the public file on the merger application, as will written comments and the transcript of the upcoming May 3 joint meeting in Atlanta.

The parties have indicated that they expect the deal to close no later than the end of 2019, and possibly in the third quarter.

Reorg M&A’s previous coverage of this transaction can be found HERE.

--Andrew Lowenthal