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SunTrust Banks, Inc. Message Board

  • tb121034 tb121034 Dec 18, 2008 4:25 PM Flag

    Bill Rogers

    He will be CEO someday...And that will be great for STI

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    • I dont think Crestar was in nearly as bad a shape as Third National. What a mess that company was. The SunTrust people deserve awards for turning things around there.

      I agree with Dr. Bob that Phil paid way too much for Crestar. I dont know why because Wavhovia, First Union and Bank of America would not have been interested in it. They already had strong Virginia franchises.

    • this is the best, most thoughtful, and factually accurate posting I have ever seen on this board.

      BillMc, sti_good_bank, gillimus and all the others with their heads in the sand should print this out, tape it to their faces like a mask, and enjoy!

    • It is astounding how completely void of facts this posting is.

      Crestar sold out because it was unable to grow and expand...and got into a technical situation where it could not issue more stock or buy back any more. Its efficiency ratio was far superior to SunTrust, its credit quality was solid. It had been trading in 60s when STI, trading in the 80s, made a one for one stock offer at 96% of its share value...a very favorable deal for Crestar shareholders.

      Unfortunately, the market had so little confidence in STI management (Humann, Speigel, Hoepner) that after the deal was announced, the stock languished in the 50s and 60s for the next 5 years. Very little confidence that economies of scale would ensure created downward pressure on the stock.

      Crestar was able to hook up with a benevolent suitor in SunTrust that had not done an acquisition in years, was bloated with non-interest expense, and that had an federated operating model that had not changed since the 1980's.

      As for SunBank, it had more in common (or actually was more complementary) culturally with Crestar than Trust Company. SunBanks needed to become more like Crestar in its OneBank model and Crestar needed the SunBanks approach to the retail market. Crestar Mortgage had a superior model than STI, but really poor leadership in Sterling Edmonds. How he remains on board is a mystery.

      Kirby's rise to the top of STI can also be blamed on Wells. It never made sense to anyone but Wells. Bill Rogers is not unlike Kirby, but his sponsor is Phil Humann and the Macon Mafia. If Rogers does take over as CEO, which seems improbable before STI is sold, look for STI to revert to a 1980s model the market will hate.

      Wells will do to STI what he did to Crestar before he retires in 3 years. But STI will not sell until it is healthier and can expect the kind of premium that Crestar deserved and got.

    • crestar was one of the few virginia banks to survive the early 90"sbecause there was less in real estate exposure, they thrived in the mid 90's as a result of growth by aquiring failed thrifts (i.e. they got their deposits and branches but not their bad loans), and the credit products that are troubling the banking industry today are not products that Crestar focused just have bad information....

    • How different do you think things would be had Ted Hoepner been given the reins instead of Wells? Ted had some personality quirks, but he was a top-drawer banker through and through.

    • I didn't mean to imply that Crestar was in any danger of failing. Just that they were in trouble with asset quality and poor management and investors were clamoring for results. Without a doubt, they were forced to seek a partner. It was their stockholders that did the forcing but the regulators were ecstatic about the merger with SunTrust.

      Crestar had brought in a new executive team from Bank One a few years previous and when those guys realized they weren't going to be able to turn things around and remain independent they started shopping the bank around. SunTrust paid an ENORMOUS premium for Crestar and the market absolutely crucified them for it.

      When we started digging into Crestar's books after the merger (you can only do so much during the due-diligence exercise) we were shocked at how messy things were. They had no discipline in their finance department and I don't know how their auditors let some of that stuff fly. This was, of course, pre-Sarbanes-Oxley, so it was a different environment back then. No doubt, they wouldn't have been able to get away with it in today's environment. What was even more shocking is they took an ex-Crestar person and made him CFO of SunTrust when John Spiegel retired. What a bonehead move that was. At least they finally realized it and corrected it, but almost 5 years later.

      It's just been a comedy of errors and mis-steps ever since the Crestar acquisition. Too bad. Believe it or not this was once one of the most respected banks in the country.

    • SunTrust paid an extremely high premium for Crestar, I recall that much. This was right at the end of a wave of mergers, as I recall. It is certainly true that SunTrust had a sparkling reputation at that time --- whereas Crestar was not in the same league, if I can put it that way. SunTrust's stock price took 10 years to recover, that much we can say for sure.

    • I agree that Crestar was troubled bank at the time STI acquired it. I am not sure regulators were circling though.

      Why is Wells running STI now?

    • conradthecaterpilarkiller conradthecaterpilarkiller Dec 23, 2008 11:32 PM Flag

      You seem to know your stuff about STI and make intelligent posts. I'm just curious why the vitriol towards those on the front lines making sales and dealing with customers. The sales force does not have a lot of authority at STI - they must price deals and follow rules within established parameters. Without someone at the company to sell loans and deposit accounts and other products and service to customers, there would be no need for all of the other functions.

    • If you "controlled the conversion of 8 products" all that tells me is you work(ed) in IT. I've never known anyone from IT that new their *ss from a whole in the ground when it comes to financial matters. That does not qualify you to know what the financial condition Crestar was in immediately prior to the acquisition by SunTrust nor the amount of dubious assets that had to be written off thereafter.

      I don't know why you want to keep your head in the sand about the true facts behind the acquisition. A lot of you Crestar folks share this affliction. Selective memory must be really fun. I should try it sometime.

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