Three SunTrust branches in Southside Virginia are among the 30 bank locations being sold to First Horizon Bank in a deal expected to close early next year.
The transaction is to comply with anti-trust regulations prior to the planned merger of SunTrust Banks Inc. with BB&T Corp. to form Truist Financial Corp. A letter of agreement issued Nov. 8 by the U.S. Department of Justice (DOJ) requires SunTrust to divest 28 branches in North Carolina, Virginia, and Georgia.
With this acquisition, First Horizon will take on about $2.4 billion in deposits and $410 million in loans, according to a press release issued jointly by SunTrust, BB&T, and First Horizon.
The divestiture includes the two SunTrust branches in Martinsville and Henry County, located in the Village of Martinsville shopping center on Commonwealth Blvd. and at 3000 Virginia Ave. in Collinsville, respectively. The Patrick County branch at 114 W. Blue Ridge St. in Stuart is also affected.
The acquisition of these and five other branches in Virginia will be First Horizon’s first foray into the state, according to the bank’s website. The Tennessee-based company operates about 270 bank locations in the southeast U.S. The majority of branches to be divested are in the Winston-Salem and Durham/Chapel Hill metro areas of North Carolina.
When and how exactly the local branches will transition from SunTrust to First Horizon is not yet clear, but the banks are working together to retain customers and employees, a spokesperson said.
“We expect the divestiture to close in early 2020,” pending regulatory approval and closing conditions, SunTrust spokesperson Mike McCoy wrote in an email. “Over the next several months, clients of branches to be divested will receive notification from SunTrust. Until the transition is completed, they will continue to have access to all SunTrust products and services and bank just as they do today. We will work closely with First Horizon to provide as seamless of a transition for clients as possible.”
A corporate communications spokesperson for First Horizon did not respond to requests for comment.
The joint press announcement stated that First Horizon plans to “retain all current SunTrust employees in the acquired branches when the transaction closes.”
Before the sale, the DOJ agreement specifies that SunTrust may not transfer or dismiss without cause any branch managers, assistant branch managers, or loan officers at the affected locations and must waive any non-compete clauses for those employees.
“First Horizon is excited to welcome new employees and customers to our family,” Bryan Jordan, First Horizon’s Chairman and CEO, said in the press release. “We are proud of the tradition of trust we have earned for more than 155 years and look forward to working with BB&T and SunTrust to design a seamless onboarding experience.”
According to the DOJ letter, SunTrust and BB&T agree not to impede the operations at any of the divested branches or do anything to decrease the number of customers before the acquisition takes place.
In addition, BB&T and SunTrust may not reacquire any of the divested branches within five years, the DOJ agreement states.
This deal paves the way for the proposed $30.4-billion “megadeal” between SunTrust and BB&T, which would make Truist the sixth-largest U.S. bank holding company serving more than 10 million households in the U.S.
Pending regulatory approval, McCoy said, “We remain hopeful to close the MOE [merger of equals] by year end.”
It is too soon to determine the fate of local BB&T branches under the deal, McCoy wrote in an email.
“We have not determined which branches may be consolidated. However, our commitment to being an active member of our communities is unwavering and local branches will continue to play a key role in the combined company,” he wrote.
Shareholders of both institutions voted overwhelmingly to approve the merger in July, according to bank news releases. Truist will establish a new corporate headquarters in Charlotte, N.C., and plans to maintain the Community Banking Center in Winston-Salem and the Wholesale Banking Center in Atlanta.
Under the proposed agreement, BB&T will retain 57% of shares to SunTrust’s 43%. The combined company’s board of directors and executive management team will be evenly split between the two institutions.
Kim Barto Meeks is a reporter for the Martinsville Bulletin. She can be reached at 276-638-8801.