BB&T Corp. Boosts Its Banking Presence in Florida
Basch, Mark, The Florida Times Union
Byline: MARK BASCH
BB&T Corp.'s acquisition of the failed Colonial Bank didn't make a big splash in the Jacksonville market, but it does make North Carolina-based BB&T a major player in Florida. And for that reason, analysts are giving BB&T high marks on the deal.
BB&T acquired Colonial's bank branches on Aug. 14 in a government-assisted deal after Colonial was closed down by the Alabama State Banking Department. Although Colonial was headquartered in Alabama, the majority of its 346 branches were in Florida. According to the Federal Deposit Insurance Corp., Colonial was the sixth-largest bank in Florida with $10.4 billion in deposits as of June 30, 2008. BB&T ranked only 17th in the state with $3.7 billion, but the addition of the Colonial branches vaults BB&T close to fourth-ranked Regions Bank.
BB&T, which had 16 Jacksonville branches, ranked only 13th in Northeast Florida and the addition of Colonial - which had only three branches in St. Johns County - won't do much to raise its profile in the local market.
Although BB&T jumped in the statewide rankings, its overall share of the Florida market is only 3.8 percent, well behind the three top players in the state: Wells Fargo, Bank of America and SunTrust. But analysts did think the deal was the best move possible for BB&T to increase its presence in Florida.
"It's still a small share, but it is difficult to find attractive sizable candidates as the top three players have a 47 percent market share of deposits," J.P. Morgan analyst Vivek Juneja said in a research note last week.
Juneja called the transaction "a good strategic deal."
The deal was announced after the stock market closed on Aug. 14, but rumors of the deal were widely circulated earlier in the day. So BB&T's shares jumped $2.43 higher to $28.23 that day.
"We feel better about the shares and applaud management for being patient in the M&A arena and then parlaying its strength in the cycle into a beneficial deal for shareholders," Keefe, Bruyette & Woods analyst Jefferson Harralson said in a research note.
Speaking of Regions Bank, its parent company, Regions Financial Corp., was trading at its highest level in three months last week after a couple of people indicated some confidence in the stock.
Hedge fund Paulson & Co. reported in a Securities and Exchange Commission filing that it had acquired 35 million shares of Regions. …