- The Washington Times - Sunday, May 9, 2004

ATLANTA (AP) — SunTrust Banks Inc. said yesterday it was buying Memphis-based National Commerce Financial Corp. in a $7 billion cash-and-stock deal, the latest merger in the wave of consolidation sweeping the financial sector.

The companies said the combination, which followed a bidding war between Atlanta-based SunTrust and Cincinnati-based Fifth Third Bancorp., would create the seventh-largest U.S. bank, with $148 billion in assets and $97 billion in deposits.

Under the terms of the $6.98 billion deal announced yesterday, NCF shareholders would receive $8.625 plus 0.3713 SunTrust share for each NCF share. Based on SunTrust’s closing price Friday, the transaction is valued at $33.46 per NCF share — a 5.2 percent premium above NCF’s closing price on Friday. NCF shares surged 13 percent to $31.80 Friday on speculation a deal was imminent.

The price tag includes $1.8 billion in cash with the balance in stock — approximately 77.5 million SunTrust shares.

“National Commerce, with its great franchise, talented people and high standards, is a superb fit for SunTrust,” said L. Phillip Humann, SunTrust chairman and chief executive. “Our companies complement each other perfectly in terms of customer focus, geographic coverage and business orientation.”

NCF is the holding company for National Bank of Commerce, Central Carolina Bank & Trust and NBC Bank. It operates in Arkansas, Georgia, Mississippi, North and South Carolina, Tennessee, Virginia and West Virginia. National Bank of Commerce has had branches in Wal-Mart stores since 1991.

SunTrust operates in the District, Maryland and Virginia, as well as in Florida, Georgia and Tennessee.

The new bank will have 1,723 full-service offices in 11 states and the District.

The deal, which is subject to regulatory approval, is expected to close by the end of the year. Later this week, customers will be able to use automated teller machines of either bank without a usage fee.

“From a cultural perspective, SunTrust operates a similar banking model of regional banks, with local decision-making that keeps the bankers in tune with and responsive to customers’ needs,” said William R. Reed Jr., NCF president and chief executive officer. “Customers will have access to a deeper and broader array of products and services in a larger geographic footprint.”

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