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Truist remains on pace with integration-related workforce, branch reduction goals; about 1,000 employees voluntarily left during third quarter
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Truist remains on pace with integration-related workforce, branch reduction goals; about 1,000 employees voluntarily left during third quarter

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BB T BUILDING 1207470.JPG

The exiting from the former BB&T Corp. headquarters building in downtown Winston-Salem is a significant part of Truist Financial Corp's reduction of 4.3 million square feet of office space since December 2019. 

A significant non-bank acquisition resulted in a net expansion of Truist Financial Corp.’s work force during the third quarter.

However, the bank cautioned Friday that more elimination of full-time job positions are coming in the fourth quarter as it prepares to complete the integration of BB&T Corp. and SunTrust Banks Inc. in the first half of fiscal 2022.

Truist debuted on Dec. 7, 2019, the result of BB&T’s $33.5 billion purchase of SunTrust.

Truist also said it remains on pace for nearly 400 more branch closings and consolidations between now and March 31 to meet its overall goal of 800.

Truist reported in its third-quarter financial report a net gain of 275 employees during the third quarter to 52,675 companywide.

That reflected primarily Truist Insurance Holdings Inc.’s purchase of Constellation Affiliated Partners during the quarter.

Constellation, based in New York, is an insurance distribution platform operating seven managing general agents and program managers. Constellation has more than 20 operating divisions and more than 500 employees across North America.

However, since the acquisition was completed, there still have been 684 full-time equivalent job positions eliminated for an overall total of 5,964, or a 10.1% workforce decrease.

Truist said during its earnings presentation to analysts that its full-time workforce “will decline in the fourth quarter as a result of initial impact from voluntary separation retirement program.”

Kelly King, who retired at Truist’s chief executive on Sept. 12, said during the second-quarter earnings call in July that about 2,000 full-time employees agreed in June to a voluntary retirement or separation from the bank.

“These were totally voluntary decisions on their part,” King said. “This program does help us to reduce costs and create capacity to invest in needed services for our clients.”

Bill Rogers, who succeeded King as chief executive on Sept. 13, told analysts Friday that about half of those 2,000 full-time employees had left the company by Sept. 30.

Some of the future workforce reductions likely will be offset in part by its planned $2 billion purchase of Service Finance Co. LLC, a leading national provider of point-of-sale services primarily for the home improvement industry.

That deal is projected to close by year’s end, pending licensing and regulatory approvals.

Truist said in July that “to create greater capacity for investment in the experience and success of Truist clients, we’re building a more efficient, high-performance company through efforts, such as reducing real estate use, third-party spend, branch redundancy and workforce in some areas.”

Cantey Alexander, Truist’s regional president for the Triad, said in December 2019 the bank has about 3,800 employees in the region that include operations in Forsyth County and its Triad Corporate Center complex in Greensboro near Piedmont Triad International Airport.

Branch initiatives

Truist had a net closure or consolidation of 39 branches during the third quarter for a total of 2,518 as of Sept. 30.

Truist has closed or consolidated 413 BB&T and SunTrust branches over the past 18 months. That put Truist at just above the halfway mark of its plans to close or consolidate 800 branches by first quarter 2022.

The next branch-closing phase appears to include the consolidation of its downtown Winston-Salem retail space, as well as a branch in Burlington and Lexington, and 35 overall in North Carolina.

The N.C. Commissioner of Banks’ website has Truist listed “as pending” a planned closing of its drive-through operations at 150 N. Marshall St. in favor of the 200 W. Second St. branch within its former corporate headquarters.

Truist still would have 13 branches in Forsyth County.

Truist said it remains on pace for a projected $1.04 billion in annual cost savings from consolidating BB&T and SunTrust by Dec. 31. It also is on pace to be at the $1.6 billion cost-savings goal by the end of 2022.

Truist is on track to reduce its non-branch office space by 4.8 million square feet, having reached 4.3 million square feet as of Sept. 30.

Conversion update

Rogers told analysts that the bank had a successful computer system update involving its legacy BB&T network.

The continued economic uncertainty caused by the pandemic convinced Truist management team to be very deliberate with the two key make-or-break integration elements of any bank merger: branch and software/hardware conversions.

The conversion occurred over the recent Columbus Day holiday weekend period. It affected customers’ ability to conduct an online transaction, withdraw cash and pay a bill, including through Zelle.

“After months of intense preparation, we migrated approximately 7 million clients to the new Truist technology ecosystem — our most significant milestone to date,” Rogers said.

“We are excited about these successful milestones in the integration process and are one step closer to the finish line of the merger.”

According to Truist’s website, the next merger step is Truist consumer and commercial products becoming available online and at BB&T branches by year’s end, and in early 2022 for current SunTrust customers.

"Truist continues to march ahead toward major systems conversions in the fourth and first quarters to complete the SunTrust/BB&T merger integration," Janney Montgomery Scott analyst Christopher Marinac said.

"We think cost savings should be fully realized by the second quarter, and on-going overhead should be $3.3 billion per quarter, including merger charges.

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@rcraverWSJ

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