SunTrust Banks plans to double its annual community investment in metro Atlanta over the next three years, part of the company’s promise to remain a powerful local civic figure as it merges with rival BB&T.
SunTrust and BB&T are racing toward a planned September completion of the merger, which is expected to create the nation’s sixth-largest bank, to be based in Charlotte, N.C. The companies promised in February to increase investment in Atlanta even as the merger costs the city a coveted Fortune 500 headquarters.
In a wide-ranging interview with The Atlanta Journal-Constitution, SunTrust Chairman and CEO Bill Rogers said though Atlanta will no longer be the headquarters of the combined bank, which has yet to be named, the city will be a critical market for the bank’s future.
“We’ve had an important, key position in the growth of Atlanta for over 125 years, and we recognize that incredible opportunity and responsibility our company has,” Rogers said.
SunTrust will formally announce today that it will increase community investment in the Atlanta area from about $50 million annually to $100 million per year for the next three years.
These investments will take many forms and focus on affordable housing, workforce development, economic development and financial literacy. The investments themselves will in some cases originate as donations from the SunTrust Foundation. Others will include targeted investments through new market tax credits and low-income housing tax credits.
Earlier this year, SunTrust donated $5 million to affordable housing programs overseen by the Westside Future Fund, which is steering redevelopment of historic neighborhoods near Mercedes-Benz Stadium and the Atlanta University Center. Rogers said that donation is one example of the company’s renewed Atlanta commitment.
In February, SunTrust and BB&T announced a tie-up to create a bank valued at $66 billion. Atlanta will be home to the new company’s corporate and investment banking. BB&T’s home in Winston-Salem, N.C., will be the company’s community banking hub.
SunTrust is Georgia’s largest bank and No. 1 in metro Atlanta in terms of deposits. It is second in total number of branches, with 154 offices as of June.
BB&T, which has a regional hub in Atlantic Station, ranks fourth in total deposits and retail locations in the metro area.
The merger is expected to bring cost reductions totaling $1.6 billion annually by 2022. Overlaps in the markets that the banks serve will undoubtedly lead to branch closures and layoffs as the banks combine and find redundant operations.
The companies, which have been shuttering branches as business shifts to online channels, said about 740 of the banks’ more than 3,000 branches are located within 2 miles of each other, offering prime targets for closings.
Rogers said Tuesday he could not discuss specifics about job cuts or branch closures.
“Because our businesses are so complementary, and we don’t have a lot of client overlap, we’ve been able to say to everyone who is a performing teammate who handles a client relationship, ‘You have a job,’” Rogers said.
Chris Marinac, a bank analyst in Atlanta with Janney Montgomery Scott, said he expects future job cuts to come more from attrition than layoffs.
Branches also will be closed, and others will have fewer staffers but more technology.
“That’s what big companies are doing right now,” Marinac said. “They’re reallocating resources.”
At a town hall meeting at the Federal Reserve Bank of Atlanta in May, community leaders were generally supportive of the merger. But several expressed concerns about expected branch closures and the potential for the merger to shut out low-income communities from banking services and lending.
That’s particularly worrisome for communities of color, which are often underbanked or in “bank deserts.”
“Whether it’s in banking or in health care or any industry, when there are mergers of large players into superlarge players, we have concerns about less competition, less consumer choice. And consumers might pay more for necessary services to everyday living,” said Liz Coyle, executive director of consumer group Georgia Watch.
Rogers said he is sensitive to such concerns and that “low-to-moderate-income communities remain important” to the company.
“I had probably five or six pages of notes,” he said of the Atlanta Fed town hall. “Here are things we can do better. Let’s do be sure we’re sending the right messages. What came out of that is reflected in what we’re announcing today.”
SunTrust and BB&T leaders continue to map out technology improvements as they not only plan the integration, but draft a blueprint for a better bank, Rogers said. Rogers has traveled globally to observe other financial services and consumer-centric companies to glean new ideas for improving customer service and the work environment for employees.
In another soon-to-come milestone, by the end of June, SunTrust and BB&T are expected to announce the name for the combined bank. The moniker will also become the new name of SunTrust Park and adorn SunTrust’s downtown headquarters complex.
Rogers said the new bank will continue long-term sponsorships of organizations, including the Atlanta Falcons and the Georgia Aquarium. He said the bank is in constant contact with the Braves about the new name.
“The great thing about the relationship with the Atlanta Braves is it never starts from the contract,” Rogers said. “It starts from a great partnership and what’s great for both sides. We don’t have a fine-print relationship, we have a partnership.”
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