BB&T and SunTrust vow to minimize employee, client defections
The leaders of BB&T and SunTrust Banks shared their pitches for keeping employees and customers from bolting to rivals as the two banks move closer to completing their megamerger.
While Kelly King, BB&T’s chairman and CEO, said retention packages are part of the plan, management is also “recruiting” its associates by casting the new company as a “dynamic” organization that can change the world. He did not say what kinds of employees would be offered incentive packages to stay on board.
“I’ve been telling people that I wish as I was 40 years old again because this is just so exciting,” King said during BB&T’s conference call Thursday to discuss quarterly results. He said BB&T, based in Winston-Salem, N.C., has had very few defections since announcing the deal on Feb. 7.
“We’re not taking anything for granted, and we’re not expecting our associates to just line up and be good soldiers,” King added. “This could be a place where you can find your purpose in life.”
Retaining top producers will be critical for BB&T and SunTrust, especially in the Southeast where there is significant overlap between their operations. Many banks are licking their chops to poach lenders and clients.
“We’re on offense and recruiting to ‘NewCo’ — the premier financial institution in the country in terms of geographies and markets,” Bill Rogers, SunTrust’s chairman and CEO, said during the Atlanta company’s call. “I’ve never had so many tools to recruit. The calls are coming the other way, trust me, from people who want to join our organization.”
Still, plans are in place to carefully blend the corporate cultures, including weekly planning sessions. BB&T recently hosted several SunTrust executives at its leadership institute in Winston-Salem.
“SunTrust executives have excitedly committed to going through” leadership training, King said. “They loved it. It made me feel very good.”
Brainstorming sessions for the new brand have given Rogers more confidence. Employees for each bank identified the same four “core aspirations” for the brand, Rogers said without divulging any details.
While the plan is to unveil a new brand by late June, Rogers said each company’s retail businesses will operate under legacy brands for 18 to 24 months. Transitioning to the new brand at the right pace is “the sleeves-rolled-up work we’re doing right now,” Rogers said.
“Sure there will be some differences [in culture], but we will celebrate those and view them as opportunities,” Rogers said. “Kelly and I aren’t going to agree on everything. That’s fine. But we will start everything from the right framework, understanding the 'big why.’ That will be good for employees and clients.”
Employee benefits are a good example of where they are taking the best aspects of each company, Rogers said. The new company, for instance, plans to incorporate BB&T’s pension plan and SunTrust’s teammate-focused financial wellness program.
BB&T and SunTrust are conducting listening sessions with community groups and individuals. Regulators have also scheduled two hearings — April 26 in Charlotte, N.C., and May 3 in Atlanta — to allow people to weigh in on the deal. (Charlotte would be the combined bank’s new headquarters.)
“We really want to know what people have to say about this” deal, King said. “We recognize this a major combination and we have a major responsibility in terms of giving back to the community. Both companies have been doing this … but we believe we can do even more.”
Pressed by an analyst to address the stock market’s tepid reaction to the deal — BB&T’s stock is down about 1% since it was announced — King said investors were doing the “prudent” thing by being skeptical of the deal’s projections.
“I don’t blame them for that, but I think the smarter investors will take a leap of faith and trust the experience that Bill and I have had over all these years,” King said. “Those that are more conservative will lay back and wait for us to prove ourselves.”
BB&T is “a tad more confident” in its ability to meet its projections for cost savings and long-term earnings power, King said. “The big levers on this are the expense controls … but the long-term enduring benefits are around cross-levering the specialty focuses” of the companies.
“The more we’ve learned the better we feel about that,” King said.
SunTrust, for instance, noted on its call that it sees a plenty of opportunities to market its capital markets products to BB&T clients.
Rogers acknowledged during SunTrust’s call that he is sometimes awed by the “enormity of the task.”
“While I have every confidence that we have the right team in place … I wake up every morning with a realization that this is a big task that we have to accomplish,” Rogers said.
While King did not address the timetable for regulatory approvals, BB&T received positive news when the Fed announced Thursday that it had freed the company from a consent order tied to anti-money laundering and Bank Secrecy Act compliance.
“Since 2016, our highly experienced AML team has worked tirelessly to ensure our ... program meets and exceeds all required standards," King said in a press release announcing the order's lifting. "Their efforts, along with our significant investments in technology and process improvements, have positioned us well for the future.”