SunTrust doesn't expect significant job cuts in NCF acquisition

By The Associated Press

Posted 8:30AM on Monday 10th May 2004 ( 21 years ago )

SunTrust Banks Inc. said administrative positions could be affected but it doesn't expect significant job cuts from its nearly $7 billion purchase of National Commerce Financial Corp., which is known for its outlets in supermarkets and retail stores.Shares of both banking companies fell Monday on news of the cash and stock deal.The deal announced Sunday would make SunTrust the nation's seventh-largest bank with $148 billion in assets and $97 billion in deposits.SunTrust spokesman Barry Koling said there will be job cuts among the companies' 33,000 employees, mostly in back-office functions, such as administrative and operational positions.Specifics are still being worked out, but Koling indicated the number won't be significant."I don't think we're talking thousands," he said.Jeff K. Davis, an analyst with FTN Midwest Research in Nashville, said he expects NCF's offices in Memphis and Durham, N.C., to be hit particularly hard."There will be expense reductions that will mostly be born by National Commerce," Davis said. "How many folks that will be, who knows?"Management changes are expected as well, but executives at Atlanta-based SunTrust and Memphis, Tenn.-based NCF would not go into details during a conference call with analysts on Monday. The companies said Sunday that no branch-based job eliminations will result from any branch consolidations.NCF president and chief executive William R. Reed Jr. will be a member of SunTrust's policy and management committees, but beyond that his exact role at the merged company has not been determined, said SunTrust chairman and chief executive L. Phillip Humann. Four NCF board members will join SunTrust's board, Humann said.Shares of SunTrust fell $5.08, or 7.6 percent, to close at $61.80 on the New York Stock Exchange, where shares of National Commerce Financial fell 70 cents to close at $31.10.Humann said the deal, which is subject to regulatory and shareholder approval, would expand SunTrust's reach in the South and provide strong growth potential, especially in the supermarket and retail store segment where NCF specializes with in-store ATM machines and banking centers. The combined bank will operate as SunTrust."If we didn't have the best footprint in banking before, I think you could make the case that we do now," Humann said.NCF is the holding company for National Bank of Commerce, Central Carolina Bank & Trust and NBC Bank. It operates in Tennessee, North Carolina, South Carolina, Mississippi, Arkansas, Georgia, Virginia and West Virginia.National Bank of Commerce has had branches in Wal-Mart stores since 1991. In a two-year test program begun last fall, some branches in Georgia and Tennessee have been operating under the name Wal-Mart Money Centers.SunTrust operates in Florida, Georgia, Maryland, Tennessee, Virginia and the District of Columbia.Later this week, customers will be able to use ATMs of either bank without a usage fee.The merger follows a string of combinations in the national and regional banking business. Bank of America Corp. recently completed its $47 billion acquisition of FleetBoston Financial Corp., and the proposed $58 billion merger of J.P. Morgan Chase & Co. and Bank One Corp. is pending.In January, Regions Financial Corp. and Union Planters Corp. agreed to merge in a $6 billion deal that creates a Southeastern banking powerhouse. The same month, Huntington Bancshares Inc. announced plans to acquire Unizan Financial Corp. in a stock deal the two companies valued at $587 million.Davis, the analyst, said the NCF deal makes sense for SunTrust because it helps the company round out its geographic base in the South. At the same time, he said he was surprised NCF decided to sell out before expanding its presence in Wal-Mart stores and in the Atlanta market."We're scratching our heads saying, 'Why now?'" Davis said.___On the Net:HASH(0x2863454)HASH(0x28634d8)

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