"We are saying to our client-facing performing associates, 'Don't worry, you have a job,'" said BB&T Chairman and CEO Kelly King on behalf of himself and SunTrust Banks Chairman and CEO Bill Rogers. "If you are a client-facing associate, and doing a good job, then your job is assured."
King and Rogers appeared on "Squawk on the Street" after their companies announced before the opening bell on Wall Street a "merger of equals." The terms are a little more equal for Winston Salem, North Carolina-based BB&T, which agreed to buy slightly small SunTrust of Atlanta in an all-stock deal with a combined stock market valuation of around $66 billion.
The deal to create the nation's sixth-largest bank based on assets and deposits calls for SunTrust shareholders to get just under 1.3 shares of BB&T for each share they now own, valuing SunTrust at about $28.24 billion or $62.85 per share. That's about a 7 percent premium to Wednesday's close. SunTrust shares were trading above that premium Thursday, while BB&T's were also seeing a bounce.
The new headquarters of the yet-to-be-named merged company —with about $442 billion in assets, $301 billion in loans and $324 billion in deposits — will be in Charlotte, North Carolina. The deal is expected to close in the fourth quarter.
King, sitting next to Rogers for the interview, cited as a reason for the deal the "tremendous" amount of money that needs to be spent on technology to keep up with the rapid industry shifts to mobile banking. "We needed a digital scale."
For his part, Rogers said the merger should be viewed as "building for the future" and a "doubling down on organic" growth.
After the transaction, King will serve as chairman and CEO of the new bank until Sept. 12, 2021, and then as executive chairman until March 12, 2022. Rogers, who will initially be president and COO of the merged company, will take over as CEO on Sept. 12, 2021, and then add the chairman title on March 12, 2022. After the executive transition, King will continue to serve on the board until the end of 2023.