BB&T on Thursday said federal and state regulators have approved its planned acquisition of National Penn Bancshares, expanding the Winston-Salem-based bank’s presence in Pennsylvania, Maryland and New Jersey.
The $1.8 billion cash-and-stock deal is expected to close in the next few months.
Big banks such as Charlotte-based Bank of America are largely constrained from buying other banks because of restrictions on the deposit market share they can gain through acquisition. But the mid-sized BB&T has continued to rack up new acquisitions this year.
This summer, the Winston-Salem-based bank closed deals to buy Lititz, Pennsylvania-based Susquehanna Bancshares and The Bank of Kentucky, headquartered near Cincinnati. And this spring it bought 41 branches in Texas from New York-based Citigroup.
As of Sept. 30, Allentown, Pennsylvania-based National Penn had $9.6 billion in assets, $7.0 billion in deposits, and 124 branches in Pennsylvania, New Jersey and Maryland.
“National Penn is a strategically compelling deal that complements the legacy Susquehanna franchise and presents enormous opportunities to leverage our proven community banking capabilities in these mid-Atlantic markets,” BB&T CEO Kelly King said in a statement.
In its order approving the deal, the Federal Reserve Board said BB&T would remain the 17th-largest insured depository organization in the United States after the purchase, with total assets of $219 billion. It would control $153.5 billion in deposits, about 1.2 percent of the U.S. total.
BB&T would become the fifth-largest bank by deposits in Pennsylvania, remain the fifth-largest in Maryland and become the 23rd-largest in New Jersey. Banks can’t expand beyond 10 percent of total U.S. deposits via acquisition, but can go over that limit through natural growth.
When it reviews acquisitions, the Fed examines competition, managerial strength, financial stability and the banks’ record in serving the needs of their communities, including low- and moderate-income neighborhoods.
Both BB&T and National Penn received “Outstanding” ratings on their most recent Community Reinvestment Act exams. But as part of BB&T’s approval to buy the 41 Texas branches this year, the Federal Deposit Insurance Corp. directed BB&T to develop a strategic plan related to CRA, according to the Fed order.
That plan, which received FDIC approval in February, calls for a semi-annual review of BB&T’s branch strategy, lending and marketing efforts. As part of the plan, BB&T has opened branches in moderate-income, majority African American census tracts and stepped up advertising in African American communities.
BB&T previously announced that National Penn’s CEO Scott Fainor will be named a group executive responsible for overseeing multiple community banking regions in Pennsylvania and nearby states.
The Winston-Salem bank is the third-largest in the Charlotte metro area by deposits and employs about 1,900 in the area.