NEW YORK (TheStreet) -- BB&T Corporation (BBT) , North Carolina's second-largest bank, announced Wednesday it has agreed to buy Susquehanna Bancshares (SUSQ) , headquartered in Pennsylvania, for $2.5 billion. But Wall Street isn't pleased about BB&T's growth-at-all-cost strategy.
And BB&T investors are not welcoming the news either. As of 1 p.m. Wednesday, BB&T stock is down 2.17% to $37.50. That's a rebound from its intraday decline of 3.2% to $37.10. Meanwhile, Susquehanna shares are up 32.8% to $13.15.
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The deal, which will be financed with cash and stock, continues BB&T's expansion shopping spree. But to what extent can BB&T -- which competes with other regional banks like SunTrust (STI) and Fifth Third (FITB) -- benefit from this deal and others it has made?
To grow its footprint in Texas, BB&T announced on Sept. 3 that it had acquired 41 retail branches from Citigroup (C) . Texas has been an important growth area for many banks, not just BB&T. And the deal elevated BB&T to one of the largest banks in Texas with more than $5 billion in deposits.
Soon afterward, BB&T picked off Bank of Kentucky (BKYF) , paying a 28% premium to the bank's most recent closing price. It was an expensive deal, given that Bank of Kentucky is relatively small, with total deposits of $1.6 billion. At the time of the announcement, Bank of Kentucky's total deposits were just 3.5% of BB&T total deposits of $45.7 billion. The deal elevated BB&T to the No. 2 bank in Kentucky.