BB&T in Winston-Salem, N.C., has received the Federal Reserve Board's blessing to buy Susquehanna Bancshares in Lititz, Pa.
The approval could give more comfort to other regional banks considering acquisitions. A number of other large deals have been held up by regulators in recent years, including M&T Bank's pending purchase of Hudson City Bancorp in Paramus, N.J.
The $189 billion-asset BB&T agreed in November to buy the $18.7 billion-asset Susquehanna for roughly $2.5 billion.
As mandated by the Dodd-Frank Act, the Fed had to evaluate whether such a large merger would threaten the overall banking system, determining that the deal "would not appear to result in meaningfully greater or more concentrated" risk.
"Both the acquirer and the target are predominately engaged in retail commercial banking activities," the Fed said in its approval.
BB&T's activities and structure lack the "complex interrelationships or unique characteristics that would complicate resolution of the firm in the event of financial distress," the Fed added. "In addition, the organization would not be a critical services provider or so interconnected with other firms or the markets that it would pose a significant risk to the financial system in the event of financial distress."
BB&T said in a press release Tuesday that it expects to complete the acquisition on Aug. 1. Systems conversion will take place by the end of this year.
"We are very pleased to receive this approval and excited to move forward with the merger," Kelly King, BB&T's chairman and chief executive, said in a press release Tuesday. "Susquehanna is a strategically compelling deal expanding our franchise into a contiguous, attractive region that presents tremendous opportunities. The diversity of our markets is a key element of our long-term success."
BB&T received Fed approval last month to buy the nearly $2 billion-asset Bank of Kentucky Financial in a deal that was recently completed.