Southern banks plan $66B merger

NEW YORK — Southern banking giants BB&T and Suntrust announced they would merge in a $66 billion deal, the first big bank merger since the chaos of the 2008 financial crisis. The deal would create yet another financial titan in the U.S.

The combined company will be the sixth-largest retail bank in the country, putting BB&T and Suntrust in the ranks of other megabanks like Jpmorgan Chase, Bank of America and Wells Fargo.

The banks said Thursday that the combined company will be have $442 billion in assets, $301 billion in loans and $324 billion in deposits serving more than 10 million households. The two banks’ market share will make them a formidable presence in the South, particularly in growing parts of the country like Atlanta and Nashville, Tennessee.

Big bank mergers had been nonexistent since the financial crisis, when a flurry of governmentdirected mergers created a handful of megabanks. Most bank mergers stopped after the crisis because the banks had to clean up their balance sheets, and the regulatory environment under the Obama administration made mergers more difficult.

Since that time, the gap between the size of the big Wall Street banks and the regional banks like BB&T, Suntrust, PNC Bank, Fifth-third and others has only widened. The only bank with the size and scale of the new merged Bb&t-suntrust would be Minneapolis-based U.S. Bank. But even U.S. Bank with $456 billion in assets is dwarfed by the next largest institution, Citigroup, which has more than $1.4 trillion in assets.

The Trump administration is taking a much softer stance on bank regulations, and has appointed dozens of new business-friendly policymakers into critical positions at the nation’s bank regulators.

Further, Congress passed a law last year to ease some of the rules put into place under the Dodd-frank Act after the financial crisis.

“The regulatory environment is much easier for something of this size to happen,” said Brian Klock, an analyst with KBW.

Klock said he believes that with attention of the Suntrust-bb&t deal, as well as the easier regulatory environment, more large bank mergers may be coming.

The combined company will keep a presence in Winston-salem, North Carolina, where BB&T is based.

It will keep a wholesale banking center in Atlanta, where Suntrust has its headquarters.

Shares of Suntrust jumped 8.3 percent in midday trading, while BB&T’S stock rose 2.4 percent.