The $66 billion merger between BB&T and SunTrust banks, which would create another financial institution headquartered in Charlotte, received the final blessing from regulators Tuesday. It allows the largest bank merger since the financial crisis to move forward.
The Federal Reserve Board and Federal Deposit Insurance Corporation announced they were allowing the merger to progress. In a statement, the banks said they expect to complete the merger Dec. 6, pending satisfaction of customary closing conditions.
The banks previously announced their intent to combine and create a new bank, to be called Truist, that would be based in Charlotte. The merger will create the sixth-largest bank in the U.S. by assets and deposits.
And the merger reverses a trend of Charlotte losing bank headquarters. Truist would join Bank of America in being headquartered in the city, although other banks of many sizes have a presence here.
The merged bank is expected to have approximately $442 billion in assets and $324 billion in deposits.
“We are pleased to have received regulatory approval to merge two strong companies with complementary business models and a high level of cultural alignment,” BB&T chairman and CEO Kelly King said in the statement.
“We’ll be even better together for our clients, teammates, communities and shareholders.”
The banks said in the statement that the combined bank will serve about 10 million U.S. consumer households, in addition to business clients.
The Charlotte headquarters will eventually house about 2,000 employees in Hearst Tower in uptown, the banks have said. The new institution is also planning to open an innovation and technology center in Charlotte, which would act as a lab for new banking technology.
The regulatory approval is contingent on the combined company divesting 30 branches and more than $2.4 billion in deposits to “mitigate the competitive effects of the merger.”
This month, the U.S. Department of Justice announced an agreement with the banks for the divestiture, which it says is the largest of its kind in a bank merger in over a decade.
As part of that agreement, the banks announced that First Horizon Bank would acquire 30 SunTrust branches in North Carolina, Virginia and Georgia, and assume $2.4 billion in deposits. None of the branches are located in Charlotte, but there are nine in Winston-Salem and 11 in the Durham-Chapel Hill area.
During congressional hearings about the merger, Democratic lawmakers had raised concerns that the combination of the institutions would harm consumers and result in another large bank that could hurt the U.S. economy if it were to fail.
The merger is a symptom of the larger issue with the country’s financial system being dominated by a handful of institutions, said Bartlett Naylor. He is a financial policy advocate for the Washington, D.C.,-based consumer advocacy group Public Citizen.
“Consumers will suffer a small step backwards,” he said of the merger.
Along with its approval, the Fed issued a consent order against SunTrust for “unfair and deceptive” practices related to misleading or inaccurate statements the bank made to some business customers about the billing and operation for certain additional products between 2013 and 2017. SunTrust stopped doing so and has repaid about $8.8 million in fees to customers since 2016, the Fed said.
BB&T has agreed that the new bank will follow the enforcement action, which includes implementing policies to verify refunds and hand out additional refunds if necessary, the agency said.
Existing customers will continue to be served through their respective bank branches, apps, websites and other services during the transition, the banks said in the statement.
The companies will convert to the Truist brand over the course of two years.
The BB&T name is on the 10,000-seat home of the Charlotte Knights minor league baseball stadium in uptown, and a team official told the Observer in June that the stadium name will be changed at some point.
And Truliant Federal Credit Union is still pursuing a trademark infringement lawsuit over the Truist name, Truliant said Tuesday. Truliant has said the name will create customer confusion, given the proximity of the future bank to the credit union, which is based in Winston-Salem and has branches in Charlotte.