One of the largest banks in North Carolina, BB&T will purchase the Allentown, Pennsylvania-based National Penn Bancshares in a cash and stock transaction. National Penn, which moved its headquarters into Two Center Center at 645 Hamilton St., employs 275 people in five of the building’s 11 floors, said Scott V. Fainor, National Penn president and CEO.
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The Winston-Salem, N.C., bank said it has agreed to buy National Penn Bancshares Inc. BB&T said Monday’s deal will make it the fourth-largest bank by deposits in the state, the nation’s sixth most-populous. “We believe partnering with a high-quality company such as BB&T will continue to benefit our shareholders, employees, customers and communities”. “BB&T will have the breadth of market coverage combined with excellent client service levels that will allow us to grow our client base”.
BB&T becomes stronger by becoming a bigger player in the Pennsylvania market, Chairman and Chief Executive Officer Kelly S. King said in the news release. Zacks upgraded shares of Penn National Gaming from a “hold” rating to a “buy” rating and set a $21.00 target price for the company in a research report on Monday, July 27th.
BB&T also intends to put up another community banking region in eastern Pennsylvania to be headquartered in Allentown. The Company provides financial services, principally through National Penn Bank, its national bank subsidiary.
BB&T will create a $5 million fund to support ongoing economic development in the Lehigh Valley and Berks County, the companies said. Equity analysts at the Brokerage firm SunTrust Robinson Humphrey maintains its rating on National Penn Bancshares, Inc.
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. National Penn shareholders can opt to receive 0.3206 of a BB&T share or $13 in cash for each National Penn share. The deal price is higher than National Penn’s share value since the financial crisis of 2008-09, but still far below the low $20s a share, where it traded in the mid-2000s. BB&T was also down slightly down, closing at $40.19 on the New York Stock Exchange.
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BB&T said it expects the National Penn purchase to cost about $100 million before taxes but result in about $65 million in savings a year, adding to earnings in the first full year when charges are excluded.
