BB&T Corp., which plans to acquire National Penn Bank, said this morning it will make the Allentown home of National Penn the headquarters for BB&T’s eastern Pennsylvania banking region. But the number of employees at the center could be reduced.
The fate of National Penn’s business center in Spring Township and operations center in Boyertown is unclear. About 300 people work in the two Berks locations, while another 300 work in National Penn’s Allentown headquarters in the year-old Two City Center, the linchpin in what has been more than $1 billion in new and scheduled development in the city’s downtown.
Ricky Brown, president of Winston-Salem, N.C.-based BB&T, declined to say if any layoffs would occur. However, there is overlap in the footprint of branches operated by National Penn and Susquehanna Bank – which was recently acquired by BB&T.
“There are a number of locations that will be duplicated,” Brown told Lehigh Valley Business. “We have to make decisions about what locations survive.”
If any locations close, employees will have the opportunity to join BB&T, Brown said.
BB&T plans to establish a fourth community banking region for eastern Pennsylvania, headquartered in Allentown.
“We will operate our regional headquarters there,” Brown said. “We will have to make decisions on what else will be there. All of our client-facing revenue performers, those that are doing well, are guaranteed a job.”
BB&T is planning to acquire National Penn for $1.8 billion in deal that would close in mid-2016. BB&T will acquire National Penn in a cash and stock transaction expected to expand BB&T’s footprint in the mid-Atlantic region and push its deposit market share to No. 4 in Pennsylvania.
David B. Kennedy, National Penn’s chief banking officer, will be president of the community banking region for eastern Pennsylvania.
Scott Fainor, president and CEO of National Penn Bancshares Inc., will become group executive, with responsibility to oversee community banking regions with deposits in excess of $30 billion in Pennsylvania and contiguous states, including Maryland and a portion of West Virginia, he said this morning. Fainor said he will remain at the Allentown office and also be traveling throughout those other sites.
“That reflects the confidence we have in the leadership,” Brown said. “The opportunity to join forces with Scott made sense; now we are going to be a powerhouse.”
PNC, Wells Fargo, TD Bank, Citizens Bank and Santander Bank are a few of the banks Brown identified as BB&T’s main competitors.
BB&T completed its acquisition of Susquehanna Bank on Aug. 1, which gave it its first bank branches in Pennsylvania, said Stephen Trapnell, vice president, director of corporate communications of Susquehanna Bank, a division of BB&T. Those branches are temporarily retaining the Susquehanna brand and operating as a division of BB&T.
The Susquehanna Bank branch conversion to BB&T takes place Nov. 6, Brown said.
National Penn’s conversion to BB&T, if approved by regulators, occurs in mid-2016, he added.
National Penn itself has been fairly active in the acquisition market. Late last year, it acquired TF Financial Corp. (parent company of 3rd Fed Bank), based in Newtown.
Fainor told Lehigh Valley Business he is excited about joining Brown and his executive team.
“I have a sense of urgency and accountability to get started,” he said.
Brown said National Penn’s culture and values match with BB&T and sees the acquisition as a natural continuation of the company’s growth.
“When you take a look at the powerhouse that BB&T is going to be in Pennsylvania, the enhanced shareholder value, larger set of products … it’s a compelling argument and a great deal,” Fainor said.
Under the terms of the agreement, which was approved by the board of directors of each company, merger consideration will be about $1.8 billion, consisting of 70 percent BB&T common stock and 30 percent cash, according to a news release.
“First of all, BB&T is a first-class company that’s made investments in its future,” Fainor said. “National Penn was doing extremely well. We are continuing to execute on our plan and get to our $10 billion in assets.”
National Penn has $9.6 billion in assets, $6.7 billion in deposits and 124 banking offices in Pennsylvania, New Jersey and Maryland.
BB&T has about $210 billion in assets and market capitalization of about $31.3 billion, as of Aug. 17. The company operates 2,149 financial centers in 15 states and Washington, D.C., and offers consumer and commercial banking, securities brokerage, asset management, mortgage and insurance products and services.
For National Penn to reach $10 billion in assets, it requires adhering to costly investments in technology and Dodd-Frank federal regulations. Also, adding products and services is expensive, Fainor said.
Under Fainor’s leadership, National Penn was the first big company to reinvest in a distressed downtown Allentown when it moved its corporate headquarters into Two City Center. The move was part of an overall corporate relocation strategy, Fainor said in a previous interview.
As part of its relocation strategy, National Penn also renovated the former site of its headquarters in Boyertown and put up a new building in Spring Township near Wyomissing. The Spring Township site is the bank’s new Reading Area Business Center, which opened in April 2014 and which includes commercial, retail, finance and operations teams.