CHARLOTTE, N.C. — Executives at BB&T and SunTrust used a public hearing on their proposed merger to argue that the union will be a boon for underserved markets.
Nearly 50 individuals with widely differing opinions of the deal were set to give testimony Thursday to representatives from the Federal Reserve, the Federal Deposit Insurance Corp. and the North Carolina Commissioner of Banks.
Speaking at the outset, BB&T Chairman and CEO Kelly King and Bill Rogers, his counterpart at SunTrust, sought to assure skeptics that the new company would have proper controls and more resources to serve clients, improve technology and strengthen online security.
“Let me assure you, in the case of this merger, bigger doesn’t mean riskier,” Rogers said.
They said the combined bank will be better equipped to reach new customers and invest in communities.
“What really gets us out of bed in the morning is thinking about ways to serve our clients and make a real difference in their lives,” King said. “The ability to invest for the future is one of the primary factors driving this merger.”
Yet many of the panelists at the hearing — the first of two to be hosted by the regulators — responded with skepticism.
Jennifer Giovannitti, president of the Claude Worthington Benedum Foundation, highlighted each bank’s history in West Virginia, noting that SunTrust had closed all of its branches in the state in recent years. She praised BB&T’s commitment to the area but noted it had shuttered nearly a fifth of its branches in the state since 2014.
Branch closings “affect rural areas,” Giovannitti told the audiences. “A higher number of branches correlates with more loans to small businesses. … Access to capital is important.”
Rogers said that each bank today has a "conservative risk profile" that will be retained in the "combined entity" and that the merged company would meet shifting customer demands.
“Continuing to deliver on our purpose and performance commitments requires us to evolve and invest to keep pace with the changing dynamics of the industry and our clients," he said. "The merger … enables us to do that, faster and more effectively.”
The executives noted the billions of dollars their banks had committed to affordable housing projects and philanthropic efforts. King noted that BB&T’s employees had performed 640,000 hours of community services in the past decade, while Rogers noted the 200,000 hours his employees put in last year.
King also stressed BB&T’s commitment to diversity.
“Diversity and inclusion isn’t just the right thing to do," he said. "It is a strategic business imperative that creates more productive associates, a better understanding of the diverse client base we serve and ultimately better business results.”
“We will continue to foster a diverse and inclusive culture and workforce and create opportunities for the organizations we support,” King added. “We are proud of our diversity progress, but look forward to doing even better.”
BB&T and SunTrust held community meetings in six cities — Atlanta; Baltimore; Fort Lauderdale, Fla.; Philadelphia; Richmond, Va.; and Winston-Salem, N.C. — where they received feedback on affordable housing, financial sustainability, philanthropy and diversity, King said.
But other speakers pointed to each bank’s shrinking branch networks and said they feared the deal would reduce competition and, by extension, access to credit. Representatives from Action NC and Moms Rising took issue with SunTrust’s willingness to finance privately owned prisons.
Lesley Weaver, counsel for the National Black Farmers Association, said that bank consolidation “leads to worse economic situations for borrowers” and that any technology improvements resulting from the deal would have a “dubious” benefit for the group she represents.
Weaver urged regulators to reject the merger, but she said if the agencies are inclined to approve the deal, groups like the NBFA should have “a seat at the table to discuss therapeutic solutions” that could come from the combination.
Panelists provided a lengthy list of commitments they want the new company to make, including more funding for affordable housing and community development, improved website accessibility for those with disabilities and an increased focus on servicing rural communities.
But the deal had its defenders among those speaking at the event. A fair share of backers who pointed to the companies' affordable housing efforts, especially BB&T's.
“BB&T hasn’t always been the biggest bank in our market, but they have always been willing to put more money at risk” to support affordable housing, said Brian Crawford, a lawyer at Sanford Holshouser in Carrboro, N.C.
Some said the combined institution would be in an stronger position to back those efforts.
The merger should allow the new bank to “be transformative in its service to the community,” said Floyd Miller, president and CEO of the Metropolitan Business League in Richmond, Va.
“BB&T’s commitment to community development is a core part of their business strategy,” said Lenwood Long Sr., president and CEO of the Carolina Small Business Development Fund.
Still, Miller and Long said, the new company must do more to support community development financial institutions, especially minority-run CDFIs.
Some panelists were on the fence about the deal; they were pleased with the community efforts of both banks yet worried about the future of those commitments if the deal is approved and completed.
SunTrust has been a good corporate citizen, "but I fear that the commitment might be in jeopardy,” said Tammy Mann, president and CEO of the Campagna Center, an Alexandria, Va., nonprofit that focuses on the needs of children and families.
