<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "To say that BB & T (NYSE: BBT) is a serial buyer would be a euphemism. His acquisition of SunTrust Banks (NYSE: STI) will be the 32nd on the list of bank mergers or acquisitions since 1999, which excludes a multitude of other non-bank transactions carried out by the bank over the past 20 years. "data-reactid =" 11 "> To say that BB & T (NYSE: BBT) is a serial buyer would be a euphemism. His acquisition of SunTrust Banks (NYSE: STI) will be No. 32 on the list of bank mergers or acquisitions since 1999, which excludes a myriad of other non-bank transactions carried out by the bank over the past 20 years.

Like most supraregional banking institutions with thousands of branches, BB & T has grown through the acquisition of smaller banks, but the goals have steadily grown. While the SunTrust deal puts BB & T back in the spotlight (or sunlight, if you prefer), I thought it was a good time to review some of the biggest deals that BB & T has made. last years.

Bank sign on the building of the company.

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Source of the image: Getty Images.

Since BB & T is largely driven by acquisitions, you can choose many of its historical mergers and acquisitions in a branch map, which now extends as far west as the Texas and as far north as Pennsylvania, because of its habit of developing slowly by buying banks out of its geographical reach.

1. Colonial Bank (Alabama, Georgia, Florida and Texas)

The acquisition of Colonial Bank by BB & T is unique in that it is a "special" FDIC of 2009, a bank purchased from the FDIC on preferential terms. The purchase of banks in times of crisis may work well for the acquirer, since the loan losses resulting from the acquisition of the loan portfolio of another bank are usually shared with the FDIC. That's exactly what happened in this case.

Colonial Bank was a large South institution with $ 25 billion in assets and nearly 350 branches in Alabama, Florida, Texas and around Atlanta, Georgia, where BB & T did the acquisition. Highlighting its branches in the image below would have messed up the map, but suffice it to say that many of the locations in Alabama and Florida that you see are old-fashioned. locations of Colonial Bank.

Map of BB & T branches

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Data source: FDIC. Map made by the author with Google Maps. Black areas indicate the geographic footprint of the acquisitions detailed in this article, excluding Colonial Bank.

2. BankAtlantic (Atlantic coast of Florida)

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "After the colonial bank, BB & T returned to the good bargain bin bought BankAtlantic in trouble in 2012. Surrounded by construction loans and construction loans made prior to the 2008 financial crisis, it sold its Tampa Bay area branches to PNC Financial. Its branches located on the Atlantic coast of Florida were sold to BB & T. "data-reactid =" 60 "> After Colonial Bank, BB & T became a bargain again by buying BankAtlantic, a company in difficulty, in 2012 Filled with real estate and commercial loans and construction loans completed prior to the 2008 financial crisis, it sold its Tampa Bay area PNC Financial. Its branches on the Atlantic coast of Florida have been sold to BB & T.

The story continues

This agreement met with some failures. Initially, BB & T planned to buy its deposits and a portion of its assets in 78 branches, leaving behind a particularly problematic portfolio of underperforming loans. But the creditors have challenged the fact that BB & T take the good and let it collect bad. The decision of a court prevented BB & T from buying only the best of what BankAtlantic had to offer.

In the end, BB & T and BankAtlantic's parent company entered into a transaction in which the acquirer would assume some of the problematic assets as well as the associated liabilities. This transaction has enabled BB & T to become a larger player in the Miami, Florida market, making it the sixth largest player in the deposit market by completing the branches it acquired on the acquisition of Colonial Bank.

3. The Citigroup (Texas) branches

<p class = "canvas-atom-text-canvas Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Texas Citigroup branches lost randomly and In 2013 and 2014, BB & T needed new homes and had purchased 62 agencies from Citigroup in two different transactions, adding to 22 agencies that had survived the Colonial Bank acquisition. is widely developed in Texas by opening new calls de novo data-reactid = "68"> Citigroup branches in Texas were lost and needed new homes when, in 2013 and 2014, BB & T bought 62 branches in Citigroup in two different transactions, adding on the acquisition of Colonial Bank, BB & T expanded in Texas by opening new branches (what the industry calls de novo branches) rather than acquiring other Texas institutions.

treat

deposits

The loans

21 agencies Citi

$ 1.2 billion

134 million dollars

41 Citi branches

$ 2.3 billion

$ 87 million

Total

$ 3.5 billion

$ 221 million

Data source: Company presentations.

Citigroup is the invention of the big banks of financial centers, which mainly generate deposits through thousands of branches across the country. Citi has adopted a "barbell" strategy of lending to millions of US households through its credit card system while focusing on large commercial and corporate clients on the east and west coasts of the United States . The Texas branches were not suitable for Citi, but they were valuable to BB & T, which could add an immediate size to its branch network in Texas.

4. The Bank of Kentucky (south of Cincinnati)

The name of this bank did not necessarily fit. It would have been better known as the "Bank of Kentucky, just south of Cincinnati," as it fed largely on the smaller Kentucky communities in the Cincinnati metropolitan area. What makes this bank attractive is its strategic value.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Although the Bank of Kentucky is the seventh largest bank in the metropolitan area of ​​Cincinnati, Ohio, it was the largest bank of six counties on the Kentucky side of the Ohio River, just south of the city, making it larger than Fifth Third Bancorp, which has its roots in the Cincinnati area. "data-reactid =" 75 "> Although the Bank of Kentucky is the seventh largest bank in the Cincinnati metropolitan area in Ohio, it was the largest bank of the six Kentucky side of the Ohio River immediately south of the city, making it bigger than Fifth Third Bancorp, which has its roots in the Cincinnati area.

The acquisition allowed BB & T to gain a foothold in Ohio. Although the BB & T version of the graduated retail bank works well with retail depositors and borrowers, its balance sheet also gives it the ability to be the lender of choice for companies too large to be on Bank's balance sheet of Kentucky. With assets of about $ 1.9 billion and 32 branches, the Bank of Kentucky was more of a small addition to BB & T than a needle transfer acquisition.

5. (and 6.) Susquehanna and National Penn (Pennsylvania and Maryland)

BB & T doubled its investments in Pennsylvania by buying Susquehanna Bancshares and National Penn Bancshares as part of back-to-back operations completed in 2015 and 2016, respectively. At the time of the acquisition, Susquehanna had 245 branches and 116 at National Penn. While BB & T had already expanded to northern Maryland, these acquisitions have helped it gain a foothold in Pennsylvania.

These acquisitions were well within the BB & T wheelhouse of acquiring small banks, retaining most of their deposits and loans, while eliminating a large portion of duplicate branch and administrative expenses. BB & T was designed to eliminate 30% or more of the non-interest operating costs of each bank shortly after the acquisition, a promise it made.

Together, these banks had about $ 19.6 billion in loans and $ 20.3 billion in deposits, which made them large enough to make a difference but small enough to easily digest. As an indication, BB & T had deposits of about $ 130 billion at the end of 2014.

A bank that always buys something

The banking sector has been consolidating for more than three decades. The number of commercial banks in the United States fell from 14,400 in 1984 to 4,746 in the third quarter of 2018. BB & T contributed to the consolidation of the sector by acquiring 74 banks over this period. In addition, BB & T has also acquired a number of financial companies, including insurance agencies and non-bank lenders.

BB & T's merger with SunTrust is the bank's largest and most important banking operation since the 2008 financial crisis. Once combined, the bank will have $ 301 billion in loans and $ 324 billion in deposits. and will rank sixth among the largest banks in the United States for assets of $ 442 billion.

Size is not his only aspiration. By becoming bigger, BB & T hopes to become more efficient by reducing its operating costs to about half of its net sales, making it the leanest operator of any of the 11 largest banks with which he competes. BBT has been successful in gaining efficiencies through acquisitions, but the acquisition of SunTrust will test whether its acquisition-based model is truly scalable for large banks, not just small ones.

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<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Jordan Wathen does not own any of the shares mentioned. The Motley Fool has no position in any of the actions mentioned. Motley Fool has a disclosure policy."data-reactid =" 93 ">Jordan Wathen does not own any of the shares mentioned. The Motley Fool has no position in any of the actions mentioned. Motley Fool has a disclosure policy.