The face of local banking is facing a significant shakeup due to BB&T Corp‘s planned acquisition of Penn National, which may close as early as the middle of next year. This deal comes hot on the heels of its recently completed acquisition of Susquehanna Bancshares.
With its $2.5 billion purchase of Susquehanna Bancshares and the planned $1.8 billion acquisition of National Penn Bancshares, BB&T should become the sixth-largest local deposit taker, following Wells Fargo, TD Bank, PNC Bank, Citizens Bank and Bank of America.
In doing so, it will not only overtake Santander Bank, but also become one of the region’s most significant players. The issue with these acquisitions is that they not only reduces the amount of competition but also effectively eliminate two of Philadelphia’s largest regional banks, a move that might well result in less credit options available for mid-market businesses.
Local bank executive CEO Kirk Wycoff, of Patriot Capital Partners, said that Philadelphia region received a preview of what to expect last year when BB&T announced plans to buy Lititz-based Susquehanna Bancshares.
“Susquehanna customers that left after the BB&T deal did not go to Wells,” he noted. “They went to National Penn. And now they have to move again. I’m talking about the core middle market business client, between $10 to $20 million loan relationships. Banks like Royal Bank America and Republic First are not going to take on a $20 million relationship.”
However, others in the banking industry see this as a promising situation. Bryn Mawr’s CEO, Frank Leto, considers this a “huge opportunity” for his bank and other banks in its weight class. He thinks the turmoil it will cause, such as the immediate dislocation of employees and customers, and the fact that BB&T is not interested in certain types of loans that other banks support, will present opportunities to bring in new business.
This consolidation should put the $10 and $20 million loan range up for grabs, and with only a limited number of banks that can handle those types of loans, there is certainly an opportunity there. The question is whether it will be an opportunity that is beneficial, in the long term, for the customer.
