latest-news-headlines Market Intelligence /marketintelligence/en/news-insights/latest-news-headlines/analysts-see-smooth-sailing-for-suntrust-deal-after-bb-t-freed-from-fed-action-51258935 content
Log in to other products

Login to Market Intelligence Platform


Looking for more?

Contact Us

Request a Demo

You're one step closer to unlocking our suite of comprehensive and robust tools.

Fill out the form so we can connect you to the right person.

If your company has a current subscription with S&P Global Market Intelligence, you can register as a new user for access to the platform(s) covered by your license at Market Intelligence platform or S&P Capital IQ.

  • First Name*
  • Last Name*
  • Business Email *
  • Phone *
  • Company Name *
  • City *
  • We generated a verification code for you

  • Enter verification Code here*

* Required

Thank you for your interest in S&P Global Market Intelligence! We noticed you've identified yourself as a student. Through existing partnerships with academic institutions around the globe, it's likely you already have access to our resources. Please contact your professors, library, or administrative staff to receive your student login.

At this time we are unable to offer free trials or product demonstrations directly to students. If you discover that our solutions are not available to you, we encourage you to advocate at your university for a best-in-class learning experience that will help you long after you've completed your degree. We apologize for any inconvenience this may cause.

In This List

Analysts see 'smooth sailing' for SunTrust deal after BB&T freed from Fed action

StreetTalk – Episode 70: Banks' Liquidity Conundrum Could Fuel M&A Activity

Street Talk Episode 70 - Banks' Liquidity Conundrum Could Fuel M&A Activity

StreetTalk – Episode 69: Banks left with pockets full of cash and few places to go

Street Talk – Episode 69: Banks left with pockets full of cash and few places to go

Analysts see 'smooth sailing' for SunTrust deal after BB&T freed from Fed action

BB&T Corp. and SunTrust Banks Inc. are one step closer to completing their merger as the Federal Reserve terminated an enforcement action regarding Bank Secrecy Act and anti-money laundering compliance that was issued against BB&T in 2017.

Regulators are required to review a bank's AML record when considering bank mergers, acquisitions and other applications for business combinations, according to the Bank Secrecy Act/Anti-Money Laundering Examination Manual published on the Federal Financial Institutions Examination Council's website.

Analysts said they were expecting the termination since the North Carolina state bank regulator and the Federal Deposit Insurance Corp. had already removed similar enforcement actions.

"The fact that they were willing and able to announce that deal with SunTrust made you feel like this was coming fairly shortly," said Stephen Scouten, a bank analyst with Sandler O'Neill. "When those other two agencies already removed it, it was kind of a foregone conclusion."

The bank likely discussed the issue with the regulators before announcing the deal, according to analysts. "It's standard procedure to have a conversation with your regulator about something you're planning," said Christopher Marinac, a bank analyst with FIG Partners.

The two banks will still have to go through the remainder of the regulatory process. Analysts said they expect the deal to be approved, however. "What's still left is what's normal," said Brian Klock, a bank analyst with Keefe Bruyette & Woods.

The deal may be approved later than the third-quarter close that bank management is pushing for, according to Marinac. "A fourth-quarter close or even a year-end close seems more likely at this juncture," he said.

Fed Chairman Jerome Powell said the Fed will take its time reviewing the merger. The Fed has scheduled community feedback meetings in Charlotte, N.C., and Atlanta.

Scouten said the enforcement action was the "one issue" that commenters could have pointed to in an effort to stop the merger, but with the termination the banks should have "relatively smooth sailing" when it comes to getting regulatory approval.

The deal received pushback from some members of Congress, and the two banks will need to resolve some issues around deposit concentrations, according to Scouten. "But at the end of the day, we've seen a much more accommodative mindset from the regulatory agencies," he said.

"This should give anyone who had any fear about [the deal] not getting approved another level of comfort," Scouten said.