BB&T Corp. (BBT) and SunTrust Banks Inc. (STI) jointly said Thursday that their chief executive officers are discussing a merger of equals.
Kelly King, chief executive officer of BB&T, and William Rogers, chief executive officer of SunTrust, spoke at a joint public meeting of the Federal Reserve Board and the Federal Deposit Insurance Corporation on the proposed merger.
The companies said they would be investing an incremental $100 million annually into innovation and technology to create a digital client experience.
Branch closures. Cuts in lending to minorities and low-income communities. Fewer loans to small businesses.
Those were among the concerns expressed about the proposed merger of BB&T and SunTrust during a public hearing Thursday on the $66 billion deal. The hearing by the Federal Reserve and Federal Deposit Insurance Corporation was part of both regulators’ review of the combination, which would result in the sixth-largest bank in the U.S. That bank would be headquartered in Charlotte.
It was the first meeting held for the public to address the proposed mega-deal.
More than 100 people attended the meeting at the Charlotte branch of the Federal Reserve Bank of Richmond in uptown. The event drew a range of opponents and supporters, including SunTrust CEO Bill Rogers and BB&T CEO Kelly King.
“While both institutions are strong, we believe that together we can create tremendous value for everyone involved — our clients, associates, communities and shareholders,” King said in his prepared remarks. The combination would provide both banks with greater scale to provide the digital services clients expect, he said.
But critics said the deal has the potential to harm communities.
The combination is creating concerns that it is part of an industry trend that would make lending less accessible to black farmers, said Lesley Weaver, attorney for the National Black Farmers Association, a Virginia-based nonprofit. She urged the Fed and FDIC not to approve the combination.
“And if you are inclined to approve it, we ask for a seat at the table to discuss specific therapeutics,” she said. Those include guaranteed lending to black farmers, financial-literacy training for them and keeping rural branches open, she said.
Reversing a trend
The combination of Winston-Salem’s BB&T and Atlanta’s SunTrust was announced in February and is expected to close in the fourth quarter of this year.
Regulators must still approve the deal, which has prompted concerns from some members of Congress.
California’s Rep. Maxine Waters, chair of the House Financial Services Committee, has said the combination raises many questions and deserves “serious scrutiny” from Congress and regulators to determine whether it would benefit consumers.
For Charlotte, the merger would create a new bank headquartered in the city. That would mark a reversal of Charlotte’s trend of losing bank headquarters.
For now, Bank of America is the only bank headquartered in Charlotte, though many other banks of all sizes have operations there.