After eight years as chairman and chief executive officer of SunTrust Banks Inc., James B. Williams, 65, recently turned over those titles to L. Phillip Humann. Though Mr. Williams has put in 43 years at the Atlanta-based bank, he is not ready to retire; he remains chairman of the executive committee.

Last week he sat down with American Banker a few days after the annual shareholders meeting to discuss consolidation issues and his views on the future of the $60 billion-asset bank.

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SunTrust has not done a major bank acquisition since 1986, but at the shareholders meeting your successor, Phil Humann, indicated it was warming up to acquisitions. He talked about nonbanks as well as banks. Does this indicate a new direction for SunTrust?

No. We've always been willing. We want to expand. We just don't see a whole lot of sense in a lot of these things.

When you make a deal, you say whatever you have to say to sell the deal. You're going to say "synergy" and "efficiency ratio."

But you can't track it. If an acquirer ever quits acquiring, then you can (track it). But you'll see-they have to keep going, and taking those hits. Hits can hide a lot.

We've never had to do that. We're honest about our performance.

What about SunTrust as a seller?:

With our market cap, it is hard for anybody to buy us. We think we're in a position to go like we are and be highly successful.

We've got an enviable price-to-earnings multiple. The market likes us.

So you're saying SunTrust doesn't want to get on the consolidation bandwagon?

We'd like to get on it-in a positive way, where you really do make more money, not where you reduce your net worth and act like you make more money. We know we've got to worry about being out there someday and not seeing anything left.

Wachovia Corp. has long been considered a likely merger partner for SunTrust. Why has that deal not come to fruition?

In a merger of equals, theoretically nobody gets anything, so nobody wants to give up anything. I guess maybe that's what happened.

We are vastly different operations. We're similar in that we're conservative, strong, profitable, classy.

But we aren't similar in the way we run our operations.

There is not any one thing-money, name, location, style-that stopped it.

It's just a little piece of all of those things. But Wachovia is always going to be a possibility for us.

SunTrust was one of the bidders for Barnett Banks Inc. in Florida last summer, before NationsBank Corp. won the deal. How desirable was that franchise to SunTrust?

We wanted to make a deal with Barnett. I was frankly 100% sure that we were going to get the deal. It would have been so good for their shareholders. Our market cap was $13 billion, and we offered the whole thing for it. That's what you call betting the store, but that's how much we believed in that deal.

Is there another Barnett out there?

The other Barnett out there is Wachovia. And I guess someday these Alabama banks might make sense.

What is the most attractive Alabama bank? Is Amsouth of interest?

I really couldn't say anything about them. Really, they are all fine. It would be a matter of price, how much premium they would want over where they are. We don't know anything about the insides of them; we would have to get inside and do due diligence.

What about Compass? They have a growing franchise in Texas now; is that of any interest to SunTrust?

We would rather have a good bank in a distant market than a bad bank in a close market. If there is a right fit where we could make some money, and there was something in the price where we could make some money, it would viable for us to go to Texas.

How can a midsize regional player like SunTrust compete on price and convenience with a nationwide organization like the merger of BankAmerica Corp. and NationsBank would create?

The markets we're in, we think we're already beating them. Where we're not beating them are the markets we're not in. We don't have that housewife in San Diego banking with us.

But we think what mainly has been accomplished with the Bank of America/NationsBank deal is that they've gotten bigger. That was their goal, I guess.

That is not our goal. We like that multiple we've got (20 times expected 1999 earnings) instead of that multiple they've got (14 times, on a pro forma basis). And our shareholders like our stock increase better than they like the competition's.

What do you think the future holds for regional banking companies? How important is size and geographic reach to long-term independence and success?

What I see is continued consolidation. There is a herd instinct out there in all of us.

What's important is to be in a position to do whatever you want to do-to be strong enough, well-managed enough, rich enough to take advantage of any appropriate deal, and to also have the discipline not to pull the trigger too quick. You've also got to have the judgment not to pull it too late.

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