BB&T downgrades Allentown HQ
Two longtime Valley executives to retire as company consolidates
BB&T Corp. is eliminating its Center City Allentown regional headquarters as well as positions held by Scott V. Fainor and David B. Kennedy, former executives at National Penn Bancshares and longtime Lehigh Valley bankers.
BB&T is consolidating three Pennsylvania regions into two, which will diminish its corporate presence in Allentown, BB&T announced Thursday.
Allentown was one of 24 regional headquarters the company has across 15 states, primarily in North Carolina, Virginia, Florida and other southern states.
The move comes less than three years after BB&T acquired Allentown-based National Penn. Fainor was CEO of National Penn at the time and Kennedy a senior executive.
BB&T will continue to lease space at Two City Center, 645 Hamilton St., which will “remain an important focal point of our regional footprint,” company spokesman David R. White said.
But the Lehigh Valley will become part of the bank’s King of Prussia-based Delaware Valley region, and current Delaware Valley region President Travis Rhodes will oversee the expanded region (including New Jersey offices) from King of Prussia.
Other parts of the Northern Pennsylvania region will be consolidated into an expanded central Pennsylvania region, overseen by current region President Alex Brame.
Fainor and Kennedy are both
retiring after more than 30 years in banking, White said. Fainor was group executive overseeing the Pennsylvania regions while Kennedy was president of the Allentown-based Northern Pennsylvania region.
Fainor, 57, was CEO and president of National Penn before its $1.8 billion merger with BB&T in April 2016. The Allentown native's decision in 2012 to move National Penn's headquarters — and 275 jobs — to Center City lent credence to burgeoning revitalization efforts.
“His [Fainor's] leadership both at BB&T and in our communities has been exemplary and he has been tireless in his efforts to serve our clients through the transition of National Penn,” White said. “We are grateful for his service and Scott will continue to be engaged with BB&T in the Pennsylvania markets.”
Kennedy, also 57, was previously National Penn's chief banking officer and worked with Fainor at KNBT Bancorp before its merger with National Penn in 2008, as well as at Nazareth National Bank before its merger with Keystone Savings Bank in 2003, which created KNBT.
White said BB&T was fortunate to have Kennedy in a leadership role during the National Penn transition and wished him “all the best in his future endeavors.”
Fainor was not available to comment. Kennedy declined to comment Wednesday.
BB&T has 180 employees on the top three floors of the Two City Center office building. It subleases two other floors to payroll processing company ADP. BB&T is reviewing options for its space at the location, White said.
The company acknowledged that "a few associates” in each of the three existing Pennsylvania regions would be displaced, and White said the company is working to find those employees other positions within the company.
Those who are unable to find an available position will receive a 60-day severance notice and a severance package based on years of service, White said. He declined to provide an estimate of how many employees would remain in Two City Center upon completion of the restructuring.
BB&T has 360 employees across 32 branches and the corporate office in Lehigh and Northampton counties. It has 2,500 employees statewide.
Based in Winston-Salem, N.C., BB&T made its first move into the Northeast in August 2015 when it acquired Susquehanna Bank, the third-largest bank based in Pennsylvania, for $2.5 billion. That same month, it announced plans to acquire National Penn, the state's fourthlargest bank.
BB&T's Allentown-based region comprised 13 counties including Lehigh, Northampton, Carbon, Monroe, Berks and Schuylkill. Berks and Schuylkill are among those joining the central Pennsylvania region.
As of June 30, BB&T has about $2.1 billion in deposits in the greater Lehigh Valley, which represents about an eighth of all deposits in the region and is second only to Wells Fargo's $3.4 billion in deposits, according to the FDIC.
The 32 branches in Lehigh and Northampton counties have shrunk from 36 two years ago, though deposits at those branches have increased 4 percent during that time.
BB&T's local workforce has fluctuated since the National Penn merger. The bank initially trimmed back-office and branch positions, then expanded a call center and added a “credit hub” in Allentown in late 2016 and early 2017, and then this year closed a call center in Allentown, eliminating 50 jobs.
The restructuring announced Thursday is part of a larger strategy BB&T brass has publicly discussed over the last year or so, White said.
BB&T's move is not surprising, said Jamie Sumner, chief analyst at Bethlehem's Seifried & Brew LLC, which provides education and analysis for community banks nationwide.
“Overall, I think for a bank that size, it's kind of business as usual,” said Sumner, whose company doesn't market to BB&T.
For example, Sumner said, banks the size of BB&T are looking to expand into the digital side of banking. Advancements in computer programs and artificial intelligence are making it more economically possible for banks to convert from traditional methods of doing business.
Allentown impact
National Penn's move to Allentown ended a quarter-century spell during which no major financial institution was based in the city. It also represented a further commitment to city leaders' efforts to redevelop the city's struggling urban core.
By that point, National Penn had already provided much of the financing J.B. Reilly and his City Center Investment Corp. needed to develop the first office towers and hotel around PPL Center in the newly minted Neighborhood Improvement Zone tax district. Of the three banks that fronted the initial $35 million to cover the cost of arena site preparation, National Penn invested $22.5 million.
"We think we can be a catalyst," Fainor told The Morning Call in 2013, adding, “This is what banks should do.”
BB&T has a 20-year lease at City Center with two renewal options, according to a 2016 Securities and Exchange Commission filing. Reilly said in a statement Thursday that National Penn's decision to commit to a long-term lease was “one of the major reasons the revitalization of Downtown Allentown has been so successful.
“They really set the tone by committing to help this community,” Reilly said.
Numerous financial services businesses have followed National Penn downtown. In 2015, Morgan Stanley relocated from the suburbs to Three City Center in the 500 block of Hamilton Street. At Tower 6, which opened this year at Sixth and Hamilton streets, City Center signed leases with Merrill Lynch, ESSA, CapTrust Financial Advisors and Morton Brown Family Wealth.
TD Bank also relocated from Northampton County into the Butz Corporate Center at Hamilton and Ninth streets, which the Cherry Hill, N.J., bank first announced in May. There is no retail branch, but the bank's employees work in commercial lending, consumer banking, corporate products and services.
Since the National Penn merger, BB&T has made an effort to invest in the community, donating nearly $2.5 million to Lehigh Valley organizations through its Economic Growth Fund at the Lehigh Valley Community Foundation. Statewide, it has invested $15 million.
White said BB&T is proud to be part of the Lehigh Valley community, and that won't change.
Fainor, a Salisbury Township resident, grew up in the Alton Park neighborhood of Allentown. The Allen High and DeSales University graduate worked his way up from the records administration department of Merchants Bank of Allentown.
Lehigh Valley activist Alan Jennings, who deals with banks on issues such as community reinvestment, called Fainor an “outstanding banker with a big heart for the community in which he was raised.”
“Moving the regional headquarters out of Allentown is a sucker punch. I hope they know that the Lehigh Valley will turn on them if they take another swing at us,” added Jennings, the executive director of the Community Action Committee of the Lehigh Valley.
Kennedy was born in western Pennsylvania but moved to the Lehigh Valley when he was 8 years old (his father was a Bethlehem Steel salesman). The Lower Saucon Township resident earned a bachelor's degree in economics and business from Lafayette College and an MBA from Lehigh University.
Tony Iannelli, president and CEO of the Greater Lehigh Valley Chamber of Commerce, said both Fainor and Kennedy played a crucial role in helping Lehigh Valley businesses flourish.
“Who replaces them and how this all shakes out will certainly have an impact on BB&T's stature in the Lehigh Valley,” he said.