PUBLIC MEMORANDUM ON COMPETITIVE CONSIDERATIONS ANDAND STATISTICAL ANNEX APPLICATION to the BOARD OF GOVERNORS OF THE FEDERAL RESERVERESERVE SYSTEMSYSTEM by BB&T CORPORATION forfor priorprior approvalapproval to merge withwith SUNTRUST BANKS, INC.INC. and SUNTRUST BANK HOLDING COMPANYCOMPANY pursuant toto Sections 3(a)(3)3(a)(3) andand 3(a)(5)3(a)(5) of the BankBank Holding Company ActAct and Section 225.15 of Regulation YY March 8, 2019 March 8, 2019 PUBLICPUBLIC MEMORANDUMMEMORANDUM ON CCOMPETITIVEOMPETITIVE CONSIDERATIONSCONSIDERATIONS ANDAND SSTATISTICALTATISTICAL ANNEXANNEX BB&TBB&T CORPORATIONCORPORATION MARCHMARCH 8,20198, 2019 DOCUMENT INDEX TAB DOCUMENT INDEX TAB PUBLIC MEMORANDUM ON COMPETITIVE CONSIDERATIONS A UBLIC MEMORANDUM ON COMPETITIVE CONSIDERATIONS P A STATISTICAL ANNEX VOLUME B TATISTICAL ANNEX VOLUME S B Definitions 1 1 Annapolis, MarylandAnnapolis, Maryland 2 Asheville, North Carolina 3 Athens Area, Georgia 4 4 Atlanta, Georgia 5 Baltimore, Maryland 6 Beverly Hills Area, Florida 7 7 Blacksburg, Virginia 8 8 Brevard County, Florida 9 9 Brunswick Area, Georgia 1010 Burlington, North Carolina 1111 Carrollton Area, Georgia 1212 Charleston, South Carolina Charleston, South Carolina 1313 Charlotte, North Carolina-South Carolina 1414 ii ii DOCUMENT INDEX TAB Charlottesville, Virginia 1515 Chattanooga, Tennessee 1616 Cleveland, Tennessee 1717 Columbus Area, Georgia 1818 Dalton Area, Georgia 1919 Daytona Beach Area, Florida Daytona Beach Area, Florida 20 Douglas Area, Georgia 21 Durham-Chapel Hill, North Carolina 22 Eastern Shore, Virginia-Maryland 23 Easton, Maryland 24 Fort Myers Area, Florida 25 Fort Pierce Area, Florida 26 Fort Walton Beach Area, Florida 27 Fredericksburg, Virginia 28 Greensboro-High Point, North Carolina 29 Greenville, South Carolina Greenville, South Carolina 30 Harrisonburg, Virginia-West Virginia 31 Hickory, North Carolina 32 Hilton Head Island, South Carolina 33 Jacksonville Area, Florida Jacksonville Area, Florida 34 Johnson City-Bristol Area, Tennessee-Virginia 35 Knoxville Area, Tennessee 36 LaGrange Area, Georgia-Alabama 37 111 iii DOCUMENT INDEX TAB Lexington, Virginia 38 Lumpkin County, Georgia 39 Lynchburg, Virginia 40 Macon Area, Georgia 41 Martinsville, Virginia 42 Miami-Fort Lauderdale Area, Florida 43 Milledgeville Area, Georgia 44 Naples Area, Florida 45 Nashville, Tennessee 46 Newport News-Hampton, Virginia 47 Norfolk-Portsmouth, Virginia-North Carolina 48 North Lake/Sumter Area, Florida 49 Ocala Area, Florida 50 Oconee County, South Carolina 51 Orlando Area, Florida 52 Panama City Area, Florida 53 Pensacola Area, Florida 54 Polk County, Florida Polk County, Florida 55 Punta Gorda Area, Florida Punta Gorda Area, Florida 56 Raleigh, North Carolina 57 Richmond, Virginia 58 Roanoke, Virginia 59 SaintSaint Augustine Area, Florida 60 iv iv DOCUMENT INDEX TAB SaintSaint Mary’s,Mary's, Maryland 61 Salisbury,Salisbury, Maryland-Delaware 62 Salisbury,Salisbury, North Carolina 63 SarasotaSarasota Area, Florida 64 SavannahSavannah Area, Georgia 65 SeviervilleSevierville Area, Tennessee 66 SouthSouth Boston, Virginia 67 Spartanburg,Spartanburg, South Carolina 68 Staunton,Staunton, Virginia 69 Tallahassee Area, Florida 70 Tampa Bay Area, Florida 71 Tift County, Georgia 72 Valdosta Area, Georgia 73 Washington, DC-Maryland-Virginia-West Virginia 74 Waycross Area, Georgia 75 Wayne County, Georgia 76 West Palm Beach Area, Florida 77 Wilmington, North Carolina 78 Winchester, Virginia-West Virginia 79 Winston-Salem, North Carolina 80 Worcester, Maryland 81 V v TAB A PUBLICPUBLIC MEMORANDUMMEMORANDUM ON COMPETITIVECOMPETITIVE CONSIDERATIONSCONSIDERATIONS Section 3 of the Bank Holding CompanyCompany ActAct ("BHC(“BHC Act")Act”) wouldwould prohibitprohibit thethe Board of Governors of the Federal Reserve (the "Board")“Board”) fromfrom approvingapproving thethe proposedproposed transaction if it would substantiallysubstantially lessen competition inin any bankingbanking market, unlessunless thethe agencyagency determines that the anticompeanticompetitivetitive effects of aa proposedproposed mergermerger oror acquisition areare clearlyclearly outweighed by the probableprobable effect of thethe transaction in meeting thethe convenienceconvenience andand needsneeds ofof thethe communities to be served and thus,thus, in the publicpublic interest.'interest.1 As noted elsewhere in thethe Application,Application, the ProposedProposed TransactionTransaction willwill enhance thethe scale and financial strength of thethe combined company, enablingenabling accelerated investmentinvestment inin innovation and technology toto betterbetter serveserve customers. It willwill havehave a systemically stabilizingstabilizing impact by increasing the combined company'scompany’s diversification, financialfinancial strengthstrength andand competitivecompetitive position against the largest bankingbanking organizations that are disproportionatelydisproportionately gaining marketmarket share for deposits and other financial services. InIn addition, both partiesparties havehave aa strongstrong commitment to investing inin and developing thethe communities inin whichwhich theythey operateoperate andand willwill continue to do so post-merger. Taken togethertogether with thethe competitivecompetitive analysis andand proposedproposed divestitures discussed in the Confidential Memorandum on CompetitiveCompetitive ConsiderationsConsiderations (the(the "Confidential“Confidential Competitive Memorandum"),Memorandum”), the parties submit thatthat thethe ProposedProposed TransactionTransaction willwill be procompetitive, enabling the combinedcombined firm toto betterbetter serviceservice customerscustomers andand competecompete withwith thethe industry'sindustry’s largest players, andand is thus in thethe publicpublic interest.interest. In evaluating thethe competitive effectseffects of a proposed mergermerger oror acquisition,acquisition, thethe Board and the Antitrust Division of the DepartmentDepartment of Justice ("DOJ"),(“DOJ”), pursuantpursuant toto thethe ClaytonClayton Act, as amended, consider all thethe facts in the record. InIn particular,particular, thethe BoardBoard considersconsiders thethe 1 12 U.S.C. § 1842(c)(1); 12 U.S.C. § 1828(c)(5). 1 12 U.S.C. § 1842(c)(1); 12 U.S.C. § 1828(c)(5). number and strength of competitors thatthat wouldwould remainremain in thethe bankingbanking markets,markets, thethe relativerelative sharesshares of total deposits in insured depositorydepository institutions in the bankingbanking marketsmarkets thatthat thethe acquireracquirer wouldwould control as a result of the transaction,transaction, thethe concentration levelslevels of marketmarket depositsdeposits andand thethe increaseincrease in these levels as measured by thethe Herfindahl-Hirschman IndexIndex (the(the "HHI")“HHI”) underunder thethe DOJDOJ BankBank Merger Competitive Review guidelinesguidelines ("DOJ(“DOJ BankBank MergerMerger Guidelines"),Guidelines”), smallsmall businessbusiness lending concentration levels, and otherother characteristics ofof thethe market. BB&T Corporation ("BB&T")(“BB&T”) and SunTrustSunTrust Banks,Banks, Inc.Inc. ("SunTrust")(“SunTrust”) havehave overlapping branch operations inin 80 bankingbanking markets, as defineddefined byby thethe Federal ReserveReserve BanksBanks of Atlanta and Richmond.22 In the vastvast majority of these bankingbanking markets,markets, thethe proposedproposed transaction betweenbetween BB&T and SunTrustSunTrust would bebe consistentconsistent withwith BoardBoard precedentprecedent and thethe DOJDOJ Bank Merger Guidelines. In a subsetsubset of banking markets, the proposedproposed mergermerger exceeds safe harbor levels under the DOJ BankBank Merger Guidelines andand thus, requiresrequires aa moremore thoroughthorough examination of the relevant competitivecompetitive factors toto evaluate thethe proposedproposed merger'smerger’s competitivecompetitive effects. In a number of these markets, thethe partiesparties contend, and show inin theirtheir ConfidentialConfidential Competitive Memorandum, that nono divestitures are warrantedwarranted afterafter a holisticholistic analysisanalysis ofof thethe actual competitive conditions in each market. In others, BB&TBB&T andand SunTrust are proposingproposing 3 divestitures 3 that,that, when takentaken togethertogether with otherother mitigating factorsfactors discusseddiscussed inin detaildetail inin thethe Confidential Competitive Memorandum, ensure that the proposedproposed transactiontransaction willwill presentpresent nono 2 See the Statistical Annex Volume, which includes market share tables for all 80 markets. 2 See the Statistical Annex Volume, which includes market share tables for all 80 markets. 3 As is customary, the parties intend to perform a "householding" 3 As is customary, the parties intend to perform a “householding” exerciseexercise toto ensureensure thatthat divested deposits and loans includeinclude those retailretail andand small-businesssmall-business customerscustomers withwith aa strongstrong nexus to the divested branches, therebythereby ensuring a smoothsmooth transitiontransition ofof accountsaccounts toto thethe divestiture buyer or buyers. Accordingly,Accordingly, the deposit levellevel ultimatelyultimately divesteddivested maymay bebe greater or less than the sum ofof thethe last-reported deposit levelslevels atat thethe divested branches.branches. -2- -2- competitive concerns under the BHCBHC Act or Section 7 of the ClaytonClayton Act.Act. BB&TBB&T andand SunTrustSunTrust propose to divest such