DS News

88 published despite the collaboration between the GLO and HUD. "As a result, the GLO has been significantly delayed in drafting a State Action Plan for the funds, the critical next step at the state level before the grants can begin to flow." NORTH CAROLINA The Strategic Intent Behind the BB&T & SunTrust Merger North Carolina-based BB&T and Geor- gia-based SunTrust have announced that they will combine in an all-stock merger valued at $66 billion to create the sixth-largest U.S. bank based on assets and deposits. According to Reuters, this is the biggest bank deal since the 2007-2009 financial crisis with the combined company expected to op- erate under a new name and have around $442 billion in assets. It is expected to have $301 billion in loans and $324 billion in deposits. e new bank's footprint would cover the East Coast with new corporate headquarters in Charlotte, North Carolina. In terms of its revenue from the mortgage business, the banks projected the combined fee income of the merged entity at $88 billion with 7 percent coming in through residential mortgage banking. Of the combined loans of $301 billion, 27 percent would be from residential mortgages, the banks said in their presentation to investors. e new entity would be combining the current reach of BB&T and SunTrust bank to reach 10 million households and would have a Top 3 market share across eight states. In a statement, the companies said that the combined company's board of direc- tors and executive management team would be evenly split between the two institu- tions. In the current home markets for both companies, the combined company would maintain the Community Banking Center in Winston-Salem, North Carolina and the Wholesale Banking Center in Atlanta, Georgia reflecting the combined company's commitment to increase the respective banks' current levels of community investment. "is is a true merger of equals, combin- ing the best of both companies to create the premier financial institution of the future," said Kelly S. King, Chairman and CEO at BB&T. "It's an extraordinarily attractive financial proposition that provides the scale needed to compete and win in the rapidly welcomed Pacific Union team members and more than 120,000 customers to their Servic- ing platform. Mr. Cooper, known previously as Nation- star Mortgage, is one of the nation's largest non-bank mortgage servicer and mortgage lender. It has about 7,000 employees, includ- ing 4,000 in Dallas-Fort Worth. Texas Officials: Get Moving on Harvey Relief Money High-ranking Texas officials including Gov. Greg Abbott are calling on the federal government to establish rules that will allow for the flow of $4.3 billion to the state for Hurricane Harvey recovery, as reported in e Eagle. e article pointed out that Texas has been awaiting guidelines from U.S. Depart- ment of Housing and Urban Development (HUD), and the Office of Management and Budget, for the use of grant funds for projects meant to help kickstart storm resiliency initiatives in Harvey-impacted communities. e officials also urged the establishments to be more proactive in their approach to have appropriate systems in place, well in advance of the next hurricane season, which begins in June. Texas Land Commissioner, George P. Bush said that he did not receive a response to his letter to the President asking for him to intervene, from the then-OMB Chief Mick Mulvaney, who is now President Donald Trump's acting Chief of Staff. e delay in response is as an indication that the General Land Office (GLO), responsible for oversee- ing Harvey recovery, could not execute a "state action plan" dictating how the funds may be used, he stated. In response, Houston-area members of Congress, in a letter, urged OMB Acting Director Russell Vought to "expedite the approval of the rules at HUD that will define mitigation projects for Community Develop- ment Block Grant disaster recovery grants." e letter was signed by Gov. Greg Abbott and Texas' two U.S. senators, John Cornyn and Ted Cruz, along with the entire Houston congressional delegation, and U.S. Rep. Michael Cloud of Corpus Christi. e Congress had approved $4.3 billion in February 2018 for Texas as part of a HUD grant program designed to help communities, especially in low-income areas. Texas office- holders wrote that the rules have not yet been evolving world of financial services. Together with Bill's leadership and our new SunTrust teammates, we're going to bring the best of both companies forward to serve our clients and communities." Looking at the strategic and financial benefits of the merger, the banks said that the combined company would preserve and maintain the strong cultures of BB&T and SunTrust to "deliver superior client service and preserve the community banking model to maintain close ties to shared local com- munities." In terms of financial profile and operating metrics, the merger is expected to generate an internal rate of return of around 18 percent. e companies said that the merged entity would also take advantage of its enhanced scale to focus on selecting best of breed systems and processes and making significant investments in technology to "cre- ate a sustainable competitive advantage in an increasingly digital-first world." "By bringing together these two mis- sion- and purpose-driven institutions, we will accelerate our capacity to invest in transformational technologies for our clients. Our shared culture embraces the disruption of technology and we will take this innova- tive mindset to expand our leadership in the next chapter of these historic brands," said William H. Rogers Jr., Chairman and CEO of SunTrust. "With our geographic position, enhanced scale, and leading financial profile, these two companies will achieve substan- tially more for clients, teammates, associates, communities, and shareholders than we could alone. I have tremendous respect for Kelly, his leadership team, and the BB&T associates. We will leverage our respective strengths as we focus together on the future." e new company's leadership team would have King serving as the company's Chairman and CEO until September 2021 with Rogers serving as the President and COO of the combined entity. Rogers will take over as the CEO of the combined entity post-September 2021. e transaction for this merger is ex- pected to be completed by the fourth quarter of 2019. 21% of North Carolina renters could afford to purchase a home in 2017. Source: Urban Institute's Housing Finance Policy Center STAT INSIGHT

• Cover