SunTrust Banks STI has announced a deal to divest 30 branches across North Carolina, Virginia and Georgia to First Horizon National Corp. FHN. The transaction, expected to close early next year, is still subject to regulatory approval.
As part of the deal, First Horizon will assume deposits worth nearly $2.4 billion for a premium of 3.40%, and roughly $410 million in loans. Notably, this is not related to First Horizon’s planned acquisition of IBERIABANK Corporation IBKC, which was announced last week. (Read more: First Horizon & IBERIABANK to Merge With $75B in Assets)
SunTrust Chairman and CEO Bill Rogers said, “First Horizon is recognized in the industry for its outstanding customer service and commitment to a positive culture. We are 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.”
This branch divestiture is part of the Department of Justice’s (“DOJ”) conditional approval for SunTrust’s “merger of equals” deal with BB&T Corp. . Nonetheless, at the time of announcement of the merger in February, both the companies had noted that at least 740 branches within a two-mile radius of each other might be consolidated or divested. (Read more: Blockbuster Merger: BB&T, SunTrust to Create 6th Biggest US Bank)
While approving the merger, Makan Delrahim, assistant attorney general of the DOJ’s Antitrust Division, said “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.”
Kelly King, BB&T Chairman and CEO added, “This announcement marks another significant and required step toward the merger of equals between BB&T and SunTrust. We look forward to working with First Horizon to ensure a smooth transition for these branch teams and clients.”
The SunTrust-BB&T merger deal still requires nods from the Federal Reserve and the Federal Deposit Insurance Corporation. The combined bank, to be named Truist Financial Corp., will be headquartered in Charlotte.
Currently, SunTrust, First Horizon and BB&T carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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