Skip to main content
Basch Report
Jax Daily Record Thursday, Jun. 20, 201905:20 AM EST

No plans yet for Truist Jacksonville offices; Analyst cuts CSX estimates

Share
BB&T and SunTrust, who are planning to merge, have a combined 38 branches in the area.
by: Mark Basch Contributing Writer

Truist Financial Corp. revealed the site for its new headquarters office in Charlotte, North Carolina, but the company is not ready to announce any decisions on its Jacksonville offices.

In case you missed it last week, Truist is the name chosen by SunTrust Banks Inc. and BB&T Corp. for the company after their planned merger.

As they announced the name, they also announced plans to locate their headquarters in a 47-story tower in Charlotte.

The two banks have a combined 38 branches in the Jacksonville metropolitan area, according to the latest Federal Deposit Insurance Corp. data, and both have presences Downtown.

BB&T’s main local office is in the BB&T Tower at 200 W. Forsyth St., while SunTrust recently moved out of an eponymous 23-story building at 76 S. Laura St. to the nearby Bank of America Tower at 50 N. Laura St.

Some overlapping offices will be closed when the merger is completed, expected later this year, but representatives of both companies said by email last week that no plans have been made for their Jacksonville operations.

“No determinations have been made as far as office space. Until the merger is approved we are two separate companies,” SunTrust spokesman Thomas Crosson said.

“Our combined leadership team is working together to determine the structure of the new organization, but it’s really too early to make any comments about our facilities,” said BB&T spokesman David White.

Office space was one of many details the companies needed to negotiate after agreeing to the $66 billion merger in February.  Atlanta-based SunTrust and Winston-Salem, North Carolina-based BB&T did announce at the time they would put the headquarters of the merged bank in Charlotte and come up with a new name.

“The hope is that a new name will help foster a new culture and a fresh start for the merged firm. Yet, the move comes with risks in terms of cost and confusion,” Wells Fargo Securities analyst Mike Mayo said in a research note after the name was announced.

“There is likely to be a lot of second-guessing on the name, evidenced by a series of unsolicited comments to us since the name came out,” he said.

Janney Montgomery Scott analyst Christopher Marinac said it’s not uncommon for banks to come up with a new identity after a merger.

“These changes may seem strange at first but with time are accepted and become normal,” Marinac said in his research note.

Marinac maintains a positive outlook for the merger.

“Investors must focus on the financial impact,” he said.

Target issue not related to Worldpay

Robert W. Baird analyst David Koning said he was shopping at Target last weekend when he learned about the retailer’s massive cash register outage that prevented customers from checking out.

Naturally, Koning’s thoughts turned to Worldpay Inc., the payments technology company that is being acquired by Jacksonville-based Fidelity National Information Services Inc., or FIS.

Target issued a statement saying it was an “internal technology” issue that was fixed by its own technology team, but Koning still decided to check.

“We reached out to Worldpay, and it said it was not its issue, and its systems were up the whole time,” Koning said in a research note.

“We like the FIS/WP combo,” he said.

SunTrust Robinson Humphrey analyst Andrew Jeffrey also said in a research note last week that he likes the $34 billion acquisition of Worldpay, which FIS hopes to complete in the third quarter.

“We like the combination and believe Fidelity will exceed its $400 million three-year cost synergy target,” he said.

However, Jeffrey is maintaining a “hold” rating on FIS stock.

“We are less bullish on projected organic revenue growth acceleration,” he said. “Any top-line disappointment will limit upside, in our view.”

Ameris wins approval for Fidelity Southern deal

Ameris Bancorp last week said in a Securities and Exchange Commission filing it has received all required regulatory approvals for its acquisition of Fidelity Southern Corp.

Completion of the deal is expected on July 1.

Ameris announced the deal in December to buy Atlanta-based Fidelity Southern (which is not related to Jacksonville-based Fidelity National Financial Inc.) for stock valued at $751 million at the time of the agreement.

After the merger, Ameris Bank’s headquarters will move to Atlanta, but the executive offices of the parent company will remain in Jacksonville.

Rayonier AM announces new CFO

Jacksonville-based Rayonier Advanced Materials Inc. last week announced a realignment of some top executives, including naming a new chief financial officer.

Frank Ruperto, who had been CFO since November 2014, is assuming the role of senior vice president of its high purity and high yield cellulose business.

Marcus Moeltner, who joined Rayonier AM in November 2017 as vice president of corporate development and planning, was promoted to chief financial officer and senior vice president of finance.

Analyst cuts CSX estimates

Deutsche Bank analyst Amit Mehrotra last week cut his earnings forecasts for Jacksonville-based CSX Corp., because of general trends in the railroad industry.

“We are cutting our Rail estimates across the board, which shouldn’t come as a surprise given weak volume numbers,” Mehrotra said in a research report.

He cut CSX’s earnings estimate for 2019 by 8 cents a share to $4.36 and his 2020 earnings estimate by 6 cents to $4.86.

With the slight cut in earnings projections, Mehrotra cut his price target for CSX’s stock from $89 to $87. But that still would be a gain from the stock’s recent trading price in the upper $70s.

“We remain positive on CSX despite market participants feeling that much of the PSR gains are now in the rear-view mirror,” he said.

PSR, or precision scheduling railroading, is the operating model implemented by CSX’s new management team two years ago.

While PSR has increased operating efficiencies, Mehrotra sees opportunities for revenue gains.

“CSX has reorganized its sales efforts to go after merchandise volume opportunities that didn’t exist prior to the company’s restructuring actions,” he said.

“We also think the Intermodal business is much better positioned to capture growth the next time truckload capacity tightens.”

Sauer gets second big Marine contract

The U.S. Department of Defense last week announced Jacksonville-based Sauer Inc. was awarded a $28.3 million contract by the U.S. Naval Facilities Engineering Command to build an outdoor infantry immersion trainer at Marine Corps Base Camp Lejeune, North Carolina.

The facility will be used for small-unit rehearsal training and squad leader decision-making assessment.

Work on the facility is expected to be completed by October 2020.

This is the second recent big Marine Corps contract for Sauer. The specialty contractor in April was awarded a $19.6 million contract for airfield security upgrades at Marine Corps Air Station Cherry Point in North Carolina.

International Baler sales increase

Jacksonville-based International Baler Corp. reported higher sales for its second quarter ended April 30, resulting in a small net profit.

Sales rose from $1.96 million in the second quarter of fiscal 2018 to $2.91 million in this year’s second quarter, according to its quarterly report filed with the SEC.

Although the company shipped more balers, it also incurred higher selling and administrative expenses. However, International Baler still ended the quarter with net income of $1,865, compared with a loss of $52,472 in last year’s second quarter.

Related Stories

Advertisement