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While the local effects of a planned merger between BB&T and SunTrust are unknown, site work continued Thursday for a new bank building in historic downtown Wilson.
"We congratulate BB&T on its continued growth, soon becoming the sixth-largest bank in the country," said Wilson City Manager Grant Goings. "BB&T has consistently demonstrated a long-term commitment to its hometown, and we have received assurances that commitment remains. We look forward to breaking ground on the new downtown facility later this month."
In August, BB&T announced a $35 million project to replace the aging towers on Nash Street with a state-of-the-art building nearby. In December, city crews began work on saving commemorative pavers from the Paul V. Berry Hickory Grove Park and relocating electric, broadband, stormwater and sewer infrastructure for the development.
Thursday's announcement had many questioning how the merger might affect the company's investment as well as employment for the 2,200 BB&T employees in Wilson County.
"The new company expects to retain all high-performing direct client-facing employees and revenue producers," BB&T Vice President of Corporate Communications David White said in a statement. "For those employees who will not have a position following closing or systems conversion, they will receive at least 60-day notice, a severance package and outplacement services."
ANATOMY OF THE MERGER
BB&T CEO Kelly S. King and SunTrust CEO Bill H. Rogers Jr. participated in an interview Thursday morning with CNBC, noting changes to the banking industry prompted the planned merger.
"While each one of us are doing fine today, we both recognize that to go forward, to move forward with the best premier financial institution, we needed additional scale so that we can make the technological investments necessary to provide the digital platform and other technological support features," King said. "And so as we talked over the last few weeks, we recognize that we had two great companies that were doing fine, but working together, we could do even better."
The two banks represent 275 years of experience and a combined $442 billion in assets. Officials said once the merger is complete, the bank will operate under a new name with headquarters and an innovation and technology center planned for Charlotte.
King, 69, plans to serve as the chairman and CEO of the combined company until Sept. 12, 2021 when he'll transition to executive chairman through March 12, 2022. Until the end of 2023, King will continue to serve on the board of directors. Meanwhile, Rogers will initially serve as the president and chief operating officer before taking the reins as CEO from King in 2021.
Officials said the executive management team of the combined bank will be split equally between BB&T and SunTrust staff. BB&T shareholders will own about 57 percent while SunTrust will own the rest of the company when the merger is complete.
"We will be working together to pick the best systems, the best processes, the best people in all of the various areas," King said in the CNBC interview. "So it's a methodical and very difficult process, but it's conceptually fairly easy to understand what to do. The key is to do it, do it fast, do it efficiently, keep a keen eye on your clients and associates, be very sensitive to your communities, and that's exactly what we're going to do."
Bank officials said the merger is slated to be completed this year. N.C. Office of the Commissioner of Banks public information officer Ha Nguyen said the regulatory hurdles start with a merger application. State staff would evaluate the application to "determine whether interests of the customers and communities served by the banks would be adversely impacted by the proposed merger." He said a decision to approve or deny the proposal will come within 60 days and happen simultaneously with federal regulatory processes.
DOLLARS AND SENSE
BB&T has roots in Wilson dating back to 1872, but Thursday's announcement prompted fears similar to those felt when BB&T announced a merger with Southern National Corp. in 1995. The deal led to the relocation of the company headquarters from Wilson to Winston-Salem and affected many local jobs.
The BB&T offices in downtown Wilson house one-fourth of the company's local employees. Officials said in August that once the new building is complete, it will house the 550 employees from the towers along with 100 more employees but leave staffing levels at other BB&T facilities in Wilson untouched. White reiterated the company's commitment to Wilson Thursday.
"The technology center in Wilson is extremely important to BB&T," White said.
Addressing employee retention in Wilson was not possible Thursday as company officials worked to address broader-scale concerns. For example, the two banks have thousands of locations across the Southeast and 750 branches within two miles of each other. CNBC's David Faber pushed King and Rogers about the potential for layoffs.
"We're going to be compassionate. We're going to plan long-term," Rogers said. "If you think about the branch consolidations as an example, it really doesn't start until 2020. We have natural attrition in our business so ...I think over time we'll be able to consolidate and do this in a way that has the least amount of impact for teammates and associates as much as possible."
SunTrust's nearest branches are in Dunn and the Triangle, so branch consolidation is unlikely to affect Wilsonians. The announcement did highlight roughly $1.6 billion in annual cost savings through facilities, information technology and systems, shared services, retail banking and third-party vendors.
"As we lean forward, it's not about looking backwards. It's about looking forward," King said on CNBC "Squawk on the Street." "It's about how do we create the kinds of products and services and processes that not only meet the needs of our clients, but exceed the needs of our clients."
Local officials remained optimistic about BB&T's ties to Wilson.
"I think it just heightens our awareness and reminds us how critically important BB&T is to this community," said Wilson Chamber of Commerce President Ryan Simons. "During their history in Wilson, through the good and bad times, BB&T has shown a strong commitment to this community and we expect that to continue. We look forward to the opportunities this merger provides."