Truist hires former Citi muni bankers to build 'national scope'

Scott McIntyre/Bloomberg

(Bloomberg) --Truist Financial hired more Citigroup municipal-bond veterans, showcasing the Southeast regional bank's deepening commitment to the $4 trillion market as the Wall Street powerhouse leaves the business.

Charlotte, North Carolina-based Truist added Cameron Parks to head infrastructure and government banking. Also joining were Robert Mellinger and Matt Bernstein.

The expansion by Truist, created by the merger of SunTrust Banks and BB&T in 2019, comes as municipal investment banking is showing signs of life. A decrease in borrowing costs this year has pushed state and local debt sales up more than 40% over the year-ago period, according to data compiled by Bloomberg.

Truist Chief Executive Officer Bill Rogers noted the strength of the business line in a February call with analysts. It's "now starting to build up some momentum," he said. "As we see, public finance opportunities are starting to grow."

The bank has been strengthening its muni team since Scott Frail, head of public finance, arrived from Wells Fargo in 2021 and Todd Bleakney joined a year later to oversee trading, sales and research. Truist has made about 20 hires including bankers, traders, and sales personnel from Wells Fargo, Hilltop Securities and T. Rowe Price.

"We are looking at this platform on a much more national scope," Frail said in an interview. "Our reach is clearly coast to coast."

Both executives noted Truist's presence in the Southeast and existing banking relationships with municipalities. They said they see an opportunity for more infrastructure financings there as a part of the region's population growth.

"The expansion was just a natural thing for Truist," Bleakney said.

Other Citigroup alumni at Truist include Jamie Doffermyre, who leads high-yield muni trading, and Jeffrey Swanson, a project finance banker. Sales executives William Hendricks and Dan Mulligan also joined.

Big Bank

Truist last year boosted its standing in municipal-bond underwriting, moving up 12 slots to rank as the 35th largest muni underwriter, according to data compiled by Bloomberg.

As one of the biggest U.S. banks, theoretically it could use its large balance sheet to take more risk in the muni market, whether by buying securities during a selloff or stepping in to support a transaction it's managing.

Such a move would stand in contrast to Citigroup, where the bank decided the municipal finance business is "no longer viable given our commitment to increase the firm's overall returns," according to a December memo to staff.

The departure came after years of Citi being a muni market stalwart, with a public finance team that kept it in the top ranks of underwriters. Banks have been vying to hire bankers from there. Morgan Stanley just snapped up four Citi muni bankers.

As a super regional bank, Truist's push into munis is notable. The space is dominated by the likes of Bank of America and JPMorgan Chase . Other Wall Street firms like Goldman Sachs Group tend to focus on the largest deals. Broker-dealers firms also have a strong presence and work on deals within their region.