By Maria Saporta
Atlanta will be losing the headquarters of its largest bank with the announced merger of SunTrust Bank and BB&T Corp. (NYSE: BBT).
But the deal is so compelling that it was worth losing the headquarters, according to two key leaders of the Atlanta bank.
“No one is more attached to Atlanta and the brand than I am,” said Bill Rogers, CEO of SunTrust Banks Inc. (NYSE: STI)who initially will be president and COO of the combined bank until 2021, when he becomes the merged bank’s CEO. “That sadness is more than overshadowed and compensated by the excitement we feel today. There’s no way I could let that opportunity pass.”
If approved and implemented, the combined bank would be the sixth-largest bank in the country, but instead of being based in BB&T’s hometown in Winston-Salem or in Atlanta, executives decided to pick a “neutral” location for the combined bank’s headquarters – Charlotte, N.C.
“In conversations, we considered the headquarters being in Winston-Salem, and we considered the headquarters being in Atlanta,” said David Ratcliffe, the retired CEO of the Southern Co. (NYSE: SO) who is SunTrust’s lead director. “When you are trying to do a merger of equals, you don’t want to pick winners and losers. We picked a neutral location to convey the notion of equality.”
Plus locating the headquarters in Charlotte will make it the second-largest financial center in the country after New York, Ratcliffe added.
“Georgia is not losing SunTrust and its presence,” said Ratcliffe, who emphasized that the wholesale banking business will be based in Atlanta. “We will maintain a very strong financial commitment to Atlanta for the foreseeable future. The new company will be a major corporate citizen.”
As proposed, 50 percent of the executive team would be from SunTrust, and 50 percent of the board seats will be directors from SunTrust. Ratcliffe will be on the board of the combined bank, although he said it was too early to tell if he would be the lead director.
Rogers, who spoke by phone from North Carolina, said he has been concerned for a long time about the future of banking and whether SunTrust would have the capacity to serve its customers in the future.
“While I think SunTrust has all those capabilities right now, I didn’t know whether we would in the next decade,” Rogers said.
Rogers has had conversations about the future of banking with BB&T’s CEO Kelly King over the years.
“A few weeks ago it started to take on an accelerated path,” Rogers said. “This is the most financially compelling deal ever done in banking because we are going to create this incredible capacity to invest. I understand it’s ideal for banking. And if that’s so compelling, I can’t let the headquarters be the defining element.”
Rogers has been with SunTrust and its predecessor bank – Trust Company of Georgia – for 38 years, working in Atlanta for most of his career.
“No one is more invested in our brand and our hometown than I am,” Rogers said. “I felt this opportunity was so compelling that I should be able to put that on the table. I know how important this opportunity is.”
Rogers said “every option and permutation was considered” about the name of the bank and its headquarters location.
“This is about moving forward – creating winners and creating a new bank,” Rogers said. The ultimate compromise was putting the headquarters in Charlotte.”
Ratcliffe, who was chairing the board meeting of the Georgia Research Alliance Thursday morning, called the merger “a synergistic opportunity” that was like adding two plus two and getting five.
“Those two strong organizations will be stronger together. Both organizations will be better off together than they were separately,” he said. “The combined new company allows us to be aggressive competitors against the larger banks.
I’m excited and enthusiastic about the future. The opportunity to do something like this does not come around very often.”
Then Ratcliffe showed his loyalty to Atlanta.
“Would I love the new company to be based in Atlanta? Certainly,” Ratcliffe said. “Do my counterparts want it to be in Winston-Salem? I’m certain they do. But this is a merger of equals. It’s truly a combination of two great organizations. I’m excited and enthusiastic about the future. The opportunity to do something like this does not come around very often. We’re going to be fine.”
BB&T’s King is 70 years old, and Rogers is 61, so they were able to agree on the governance and CEO succession.
Rogers said he will have a place of residence in Charlotte as well as Atlanta.
“I will toggle back and forth. My four kids and five grandkids are in Atlanta,” said Rogers, who added that once the deal closes (likely by the end of the year), he will be spending more of his time in North Carolina.
It is not yet known what the merger will mean to the workforce in Georgia, but because it will take about a year for the deal to take place, some of the consolidation of employees could be handled through attrition.
SunTrust has been an important civic player in Atlanta and Georgia, and Rogers said he doesn’t expect that to change.
“We just increased our No. 1 market share in Atlanta,” Rogers said. “Kelly and I both committed that we will be increasing our respective commitment in Atlanta and Winston-Salem.”