BBT BB and T Corporation

BB&T Corp. has reached an agreement to buy National Penn Bancshares Inc. in a cash and stock deal valued at about $1.8 billion.

The deal, subject to approval by National Penn shareholders, would expand Winston-Salem, N.C.-based BB&T's footprint in the Mid-Atlantic and bolster its deposits by about $6.7 billion.

National Penn, based in Allentown, Pa., has about $9.6 billion in assets and 124 locations in Pennsylvania, New Jersey and Maryland.

BB&T said the merger, expected to close in mid-2016, would cost the company about $100 million before taxes but result in about $65 million in savings a year. Excluding one-time changes, BB&T said it expects the deal to add to earnings in the first full-year.

If approved, David B. Kennedy, National Penn's chief banking officer, would be named president of a new community banking region, based in Allentown.

Meanwhile, National Penn's chief executive, Scott V. Fainor, would become group executive, overseeing several community banking regions, BB&T said.

National Penn's shares edged up in late trading to $10.94.

Write to Maria Armental at maria.armental@wsj.com

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(END) Dow Jones Newswires

August 17, 2015 21:55 ET (01:55 GMT)

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