How Could the SunTrust and BB&T Merger Affect my Retirement Plan?

By Caleb L. Swiney, Spring 2019 IAC Student Intern

Mere minutes after SunTrust and BB&T announced their merger, the internet was flooded with articles discussing everything from how big the resulting bank will be to what the name of the Atlanta Braves home stadium might be changed to. At least one article has even considered the impact that the merger could have on retirement accounts.

So, how could this merger affect your retirement plan? If you don’t have any investment accounts with SunTrust or BB&T, that answer is simple; it won’t have any major impacts on your investments. If you do have a retirement or other investment account at either bank, however, there are some factors that you should consider moving forward.

First, the merger won’t occur until the fourth quarter of 2019. That doesn’t mean that investors will not see some effects immediately. In fact, both companies’ stock saw significant growth after the merger was announced. This growth in value is largely based on the increased amount of assets that the new post-merger bank will have. Economic experts suggest that this merger signifies an overall positive trend in the banking industry and also note that after the merger occurs, former BB&T investors will see around a 13% increase in value per share while SunTrust investors will see an increase of around 9% per share.

On the other hand, not all investors will be pleased with the merger. The newly formed bank plans to have its headquarters in Charlotte, North Carolina and conduct other significant business through its hubs in Winston Salem, North Carolina and Atlanta, Georgia. The integration of these two vast companies will inevitably cause an initial thinning of the herd. For example, the BB&T branch in Allentown, Pennsylvania has already been eyed by some as a likely candidate for the chopping block in the coming merger. Investors whose brokers or advisers are working in these branches should be especially careful in the coming months to stay in contact with these individuals to be sure that they know who is handling the transition of their accounts.

Regardless of whether you have any assets with either BB&T or SunTrust, this last piece of advice is vital in making sure that you don’t fall prey to sloppy or disingenuous brokers or advisers.  Make sure that you define what your retirement plan is and take action in your own investments to avoid any potential pitfalls.