A definitive agreement has been signed by National Penn Bancshares and BB&T Corporation where the latter will acquire the former. The transaction will be in cash and stock and valued in the region of $1.8 billion. This event will expand BB&T’s Mid-Atlantic reach. It will also improve its share in the deposit market to fourth position in Pennsylvania.
Chain of purchases
BB&T, a bank operating out of Winston-Salem, N.C closed buyouts of two other banks this summer: the Susquehanna Bancshares Inc. and Bank of Kentucky Financial Corp. Both the deals were publicized in 2014 and swiftly went through the process of regulatory approval. This happened at a time when regulatory concerns held up other bank deals.
National Penn has its head offices in Allentown, PA. Its total assets are $9.6 billion and deposits add up to $6.7 billion. Employees are spread over 124 banking offices in Maryland, New Jersey and Pennsylvania.
Kelly S. King, the Chief Executive Officer and Chairman of BB&T, says that the National Penn acquisition offers an excellent opportunity to strengthen the BB&T franchise in the Pennsylvania state and then to continue creating scale necessary for high quality service operation. He added that as the fourth biggest banking entity in Pennsylvania, his company will have wider market coverage and superlative client service levels. This will permit the bank to increase its client base.
Rationale and future plans
King said that National Penn is an excellent, well-managed company with robust management. Its culture, business model and commitment to communities gel with BB&T’s. The latter is very much excited to welcome new associates and clients to BB&T. This will help the latter to leverage the latter’s tried and tested community banking capabilities.
Scott V. Fainor, the Chief Executive Officer and President of National Penn, echoed King’s view when he expressed pride at the consistent and strong performance delivered by National Penn team members. He expressed the opinion that partnering with quality companies like BB&T will benefit communities, employees, shareholders and customers.
Scott Fainor will be the group executive of the new entity. He will oversee a number of community banking regions. These regions will have $30 billion in deposits or more in Pennsylvania along with contiguous states. BB&T has plans to form a fourth banking region located in eastern Pennsylvania. This will have its base in Allentown. David B. Kennedy, the chief banking officer of National Penn will be the regional president.