North Carolina-based BB&T Corp. and National Penn Bancshares Inc. has announced an agreement under which BB&T will acquire National Penn in a cash and stock transaction valued at approximately $1.8 billion.
National Penn, headquartered in Allentown, has $9.6 billion in assets, $6.7 billion in deposits and 124 banking offices in Pennsylvania, New Jersey and Maryland.
“The acquisition of National Penn provides a tremendous opportunity to strengthen our franchise in Pennsylvania and continue building the scale necessary to operate efficiently and with high quality service,” BB&T Chairman and CEO Kelly S. King said in a statement. “As the fourth largest bank in the state, we will have a significant presence in these markets. BB&T will have the breadth of market coverage combined with excellent client service levels that will allow us to grow our client base.”
“National Penn is an attractive, well run company with strong management. National Penn’s culture, commitment to its communities and business model are a strong fit with BB&T’s,” King added.
The acquisition, announced late Aug. 17 by Winston-Salem, N.C.-based BB&T, comes just a couple of weeks after it closed its purchase of Susquehanna Bancshares Inc., a deal valued at about $2.5 billion.
“I am very proud of the strong and consistent financial performance delivered by the team members of National Penn,” said National Penn President and CEO Scott V. Fainor in a release. “We believe partnering with a high-quality company such as BB&T will continue to benefit our shareholders, employees, customers and communities.”
In a conference call Tuesday, Aug. 18, King said that the planned acquisition will lead to the closure of approximately 25 overlapping branches and back office job cuts, though a final number has not yet been determined. The location of the branch and its performance will be two of the main factors in determining whether a particular branch will close, Brown told the Philadelphia Business Journal on Tuesday.
BB&T spokesman David White emailed a statement from the company to The Mercury stating there will be no job changes prior to the transaction’s closure, which is expected to take place by the middle of 2016.
“Those decisions will be communicated to employees as soon as possible,” the statement reads. “Regardless of these decisions, BB&T expects to retain all high-performing direct customer-facing employees and revenue producers in these areas.”
Over the next few months, National Penn’s approximately 2,000 employees will be notified of their future BB&T job assignments. Displaced employees will have first consideration for internal job openings. For those employees who will not have a position following the closing, they will have at least 60 days notice, a severance package and outplacement services, according to the statement.
The press release states that Fainor will be named group executive and will oversee multiple community banking regions with deposits in excess of $30 billion in Pennsylvania and contiguous states. In addition, BB&T plans to establish a fourth community banking region for eastern Pennsylvania, headquartered in Allentown, and will name David B. Kennedy, National Penn’s chief banking officer, as the president of the region.
BB&T plans to continue National Penn’s tradition of commitment to its communities by creating a $5 million fund to support ongoing economic development in the greater Lehigh Valley and Berks County communities, according to the release.
Under the terms of the agreement, which was approved by the board of directors of each company, merger consideration will be approximately $1.8 billion consisting of 70 percent BB&T common stock and 30 percent cash.
This acquisition is subject to customary closing conditions including regulatory approvals and approval by National Penn shareholders.
Headquartered in Boyertown since its predecessor – National Bank of Boyertown was founded in 1874 – National Penn Bancshares announced in October 2012 plans to move its headquarters from Boyertown to Allentown by spring 2014. A new 11-story corporate headquarters opened in May 2014 on Hamilton Street in Allentown.