The Department of Justice today announced an agreement with BB&T Corporation which requires the company to make substantial divestitures in order to resolve antitrust concerns about the company's pending acquisition of First Virginia Banks Inc.
Under the agreement, BB&T will divest 11 First Virginia bank branches and two First Virginia drive-in facilities, with about $290 million in total deposits and loans associated with these branches.
"This divestiture will ensure that banking customers in Virginia will continue to have competitive banking services available," said R. Hewitt Pate, Acting Assistant Attorney General of the Department's Antitrust Division.
In addition, BB&T has agreed that, for a period of time, it will sell or lease any of the branches closed as a result of the merger in specified banking markets to any commercial bank, as long as the bank's offer is equal to or better than any non-bank offer.
The proposed merger is subject to the final approval of the Board of Governors of the Federal Reserve System. The Department said that it will advise the Federal Reserve Board that, subject to the divestiture of specified branch offices and associated loans and deposits, the Antitrust Division will not challenge the merger.
BB&T Corporation is headquartered in Winston-Salem, North Carolina. It has consolidated assets of $80.2 billion and consolidated total deposits of $51.3 billion. BB&T is a financial holding company that conducts its principal activities through three banking subsidiaries.
First Virginia Banks Inc. is a bank holding company headquartered in Falls Church, Virginia. It has consolidated assets of $11.2 billion and deposits of $9.2 billion. First Virginia conducts its principal banking activities through eight subsidiary banks.
Here's my question: Did anyone at the DOJ ask First Virginia's customers what they wanted? Maybe they wanted to be part of the merged BB&T-First Virginia bank. Let's suppose, for argument's sake, that every customer belonging to the divested branches decide to switch their accounts to BB&T. Would the DOJ then prosecute the customers for the sake of "preserving competition"?
I'm also curious as to how the divested branches were selected. Is there some overpaid DOJ lawyer sitting down with a list of First Virginia branches saying "keep this one, lose this one..." Talk about an obvious waste of taxpayer funds.