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GB&T stockholders vote to approve SunTrust merger

Transaction expected to close within 10 days

POSTED: May 6, 2008 5:00 a.m.
HARRIS BLACKWOOD/The Times

Philip Wilheit, chairman of the board of GB&T Bancshares, on Thursday presides over the final shareholders meeting for Gainesville Bank and Trust. Shareholders voted to accept a merger deal with SunTrust.

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The stockholders of GB&T Bancshares, parent company of Gainesville Bank and Trust and six other community banks in North and Central Georgia, have voted overwhelmingly to accept a merger with Atlanta-based SunTrust Banks, one of the largest banks in the nation.

The vote, which took less than 10 minutes to make official, clears the way for the union of the two banks, which was first announced in November.

The transaction is expected to close within the next 10 days. GB&T stockholders will receive 0.1562 shares of SunTrust stock.

"Today, emotions are fairly high, especially among the original members of the board," said Philip Wilheit, chairman of GB&T Bancshares, who presided over the stockholders meeting at the Gainesville Civic Center.

"This is a baby we birthed 20 years ago, brought it to maturity and hit a wall. We recognized what that wall was and reacted to it early," he said. The bank was hit hard by a number of loans in default that were made to builders and developers who were unable to sell the homes they had built.

Richard Hunt, founding president of Gainesville Bank & Trust and the only president of the holding company, was clearly saddened by the occasion.

"It’s an emotional thing to see it come to an end," said Hunt. "But as directors, our No. 1 thing is to do what it is in the best interest of the shareholders, and this (merger) was the best thing to do."

Hunt, who came to Gainesville from Atlanta, said he had only one goal in coming here.

"I wanted to run a good community bank," he said. "If we can get beyond the events of the last 18 months and this terrible market we’re in, I think we can look back with a tremendous amount of pride on our first 19 of our 20 years."

The company began doing business as Gainesville Bank & Trust, which drew a number of its founding directors from the former Gainesville National Bank, which had merged with FirstAtlanta, a holding company that later merged with North Carolina-based Wachovia.

A publicly traded holding company was formed a decade later and the company began its acquisition of affiliate banks.

A number of the founding directors, including Don Carter, Sam Oliver and the bank’s first chairman, Abit Massey, were on hand along with about 100 others for the called meeting to vote on the merger.

The owners of 10.1 million shares, or 71 percent of GB&T’s stock, voted in favor of the merger.

In the past 18 months, the stock went from its highest to lowest levels.

The combination of a 10-month slide in the price of its stock in 2007 and a growing number of developers in default on loans in a slumping housing market was enough for directors of GB&T Bancshares to accept a stock buyout last November from the state’s largest bank.

The announcement of the acquisition of GB&T by SunTrust came on the same day the Gainesville bank holding company announced a third-quarter loss of $6.3 million.

The losses continued as GB&T Bancshares had a $13 million loss in the fourth quarter and for 2007 had a loss of $12.48 million.

SunTrust on Tuesday reported a 44 percent decline in its profits.

The Atlanta-based company had first quarter net income of $283.6 million, or 81 cents per share, compared with $513.9 million or, $1.44 per share, in the first quarter of 2007.

SunTrust closed Thursday at $54.14, up $2.86 from Wednesday’s close. That equates to a value of $8.45 for GB&T stockholders. GB&T closed Wednesday at $8.43, up 50 cents from Wednesday’s close. The stock transaction is expected to close on May 1, however, the conversion of GB&T banks to SunTrust will not be completed until mid- to late summer.



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