SunTrust Banks to buy National Commerce

The merger will create the seventh-largest U.S. bank.
ATLANTA (AP) -- SunTrust Banks Inc. is buying Memphis-based National Commerce Financial Corp. in a nearly $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 reported 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 Sunday, 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 NFC 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 pricetag includes $1.8 billion in cash with the balance in stock -- approximately 77.5 million SunTrust shares.
Reaction
"National Commerce, with its great franchise, talented people and high standards, is a superb fit for SunTrust," SunTrust chairman and chief executive L. Phillip Humann said.
The deal, which is subject to regulatory approval, is expected to close by the end of the year.
NCF is the holding company for National Bank of Commerce, Central Carolina Bank & amp; Trust and NBC Bank. It operates in Tennessee, North and South Carolina, Mississippi, Arkansas, Georgia, Virginia and West Virginia.
SunTrust operates in Florida, Georgia, Maryland, Tennessee, Virginia and the District of Columbia.
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