Effective December 6, 2019, the Company completed its previously announced Merger with SunTrust pursuant to an Agreement and Plan of Merger dated as of February 7, 2019 and amended as of June 14, 2019. Upon closing, each SunTrust share was exchanged for 1.295 shares of BB&T stock. At the closing, SunTrust merged with and into BB&T, with BB&T continuing as the surviving corporation. In connection with the Merger, the Company changed its name from BB&T Corporation to Truist Financial Corporation. Following the Merger, on December 7, 2019, SunTrust Bank, a wholly-owned subsidiary of SunTrust, merged with and into Branch Bank, with Branch Bank continuing as the surviving bank. In connection with the Merger, Branch Bank changed its name to Truist Bank. SunTrust was incorporated in the State of Georgia and its principal operating subsidiary was SunTrust Bank. The Truist Board of Directors consists of 22 directors with 11 members from each heritage Company's Board.

In connection with the Merger, certain equity awards held by SunTrust employees were converted into Truist equity awards, with the number of shares underlying such award adjusted based on the exchange ratio. Converted equity awards will continue to be subject to the same terms and conditions as applied to the corresponding SunTrust equity award, except that, in the case of SunTrust performance stock unit awards, the number of shares underlying the converted Company equity award was determined based on actual performance through September 30, 2019 and target performance for the balance of the applicable performance period and such award will continue to vest after the Merger solely based on service.

Upon closing, each outstanding share of perpetual preferred stock issued by SunTrust was converted into the right to receive one share of an applicable newly issued series of Truist preferred stock having substantially the same terms as such share of SunTrust preferred stock. The Company issued series I, J, K, L and M non-cumulative perpetual preferred stock with a total par and fair value of $2.0 billion on the Merger closing date. Refer to "Note 12. Shareholders' Equity" for additional information related to the preferred share issuance.


(Dollars in millions, except per share data, shares in thousands)	Amount


Common stock issued	575,067
Share price on December 6, 2019	$	54.24
Fair value of consideration for outstanding common stock	$	31,192
Fair value of consideration for preferred stock	2,045
Consideration related to equity awards	309
Cash in lieu of fractional shares	1
Fair value of merger consideration	$	33,547

The Merger has been accounted for as a business combination. Accordingly, the assets acquired and liabilities assumed are presented at their fair values as of the Merger date. The determination of fair value requires management to make estimates about discount rates, future expected cash flows, market conditions and other future events that are highly subjective in nature and subject to change. Due to the timing of the transaction closing date and the Company’s annual report on Form 10-K, the initial accounting for the business combination is incomplete and the Company’s purchase price allocation is considered preliminary. Fair value estimates related to the acquired assets and liabilities are subject to adjustment for up to one year after the closing date of the Merger as additional information becomes available. Valuations subject to change include, but are not limited to, loans, certain deposits, certain other assets, customer relationships, purchased credit card receivables and the core deposit intangible. Immaterial amounts of the intangible assets recognized are deductible for income tax purposes.


(Dollars in millions)	UPB		Fair Value
Fair value of merger consideration			$	33,547
Assets
Cash and due from banks			1,621
Interest-bearing deposits with banks			4,668
Securities borrowed or purchased under resale agreements			1,191
Trading assets			5,710
AFS securities			30,986
LHFS			3,741
Loans and leases:
Commercial and industrial	$	68,687	67,019
CRE	9,509		9,324
Commercial Construction	2,136		2,089
Commercial Leases	3,967		3,911
Mortgage Loans	28,191		26,899
Home Equity and Direct Lending	15,917		15,654
Indirect Auto	12,373		12,211
Indirect Other	4,678		4,466
Student Lending	6,867		6,678
Credit Card	2,518		2,504
PCI	3,652		3,227
Total loans and leases	$	158,495	153,982
Premises and equipment			1,587
CDI and other intangible assets			2,535
MSRs			1,605
Other assets			13,748
Total assets			221,374
Liabilities and Equity
Deposits			(170,633)
Short-term borrowings			(6,837)
Long-term debt			(19,457)
Other liabilities			(5,113)
Total liabilities			(202,040)
Noncontrolling interest			(108)
Less: Net assets			19,226
Goodwill			$	14,321

Cash and cash equivalents; Interest-bearing deposits with banks, and Federal Funds sold and securities purchased under resale agreements: The carrying amount of these assets is a reasonable estimate of fair value based on the short-term nature of these assets.

Trading assets and AFS Securities: Fair values for trading and AFS securities are based on quoted market prices, where available. If quoted market prices are not available, fair value estimates are based on observable inputs including quoted market prices for similar instruments, quoted market prices that are not in an active market or other inputs that are observable in the market. In the absence of observable inputs, fair value is estimated based on pricing models and/or discounted cash flow methodologies. The majority of AFS securities were priced by third-party vendors whereas trading securities are priced internally. All securities are subject to IPV. Trading loans are valued primarily using quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active by a third-party pricing service.

Loans and leases: Fair values for loans were based on a discounted cash flow methodology that considered credit loss expectations, market interest rates and other market factors such as liquidity from the perspective of a market participant. Loans were grouped together according to similar characteristics and were treated in the aggregate when applying various valuation techniques. The probability of default, loss given default and prepayment assumptions were the key factors driving credit losses which were embedded into the estimated cash flows. These assumptions were informed by internal data on loan characteristics, historical loss experience, and current and forecasted economic conditions. The interest and liquidity component of the estimate was determined by discounting interest and principal cash flows through the expected life of each loan. The discount rates used for loans are based on current market rates for new originations of comparable loans and include adjustments for liquidity. The discount rates do not include a factor for credit losses as that has been included as a reduction to the estimated cash flows. All of the merged loans were marked to fair value as of the Merger date and therefore, there is no allowance related to these loans.

CDI: This intangible asset represents the value of the relationships with certain deposit clients. The fair value was estimated based on a discounted cash flow methodology that gave appropriate consideration to expected client attrition rates, cost of the deposit base, reserve requirements, net maintenance cost attributable to client deposits and an estimate of the cost associated with alternative funding sources. The discount rates used for CDI assets are based on current market rates. The CDI is being amortized over 10 years based upon the estimated economic benefits received.

MSRs: Residential MSRs are valued using an OAS valuation model to project cash flows over multiple interest rate scenarios, which are discounted at risk-adjusted rates. Commercial MSRs are valued using a cash flow valuation model that calculates the present value of estimated future net servicing cash flows.

Deposits: The fair values used for the demand and savings deposits by definition equal the amount payable on demand at the Merger date. The fair values for time deposits are estimated using a discounted cash flow calculation that applies interest rates currently being offered to the contractual interest rates on such time deposits.

Short-term borrowings: The carrying amounts of short-term borrowings are reasonable estimates of fair value based on the short-term nature of these liabilities. The fair value of securities sold short is determined in the same manner as trading securities.

Long-term debt: The fair values of long-term debt instruments are estimated based on quoted market prices for the instrument if available, or for similar instruments if not available, or by using discounted cash flow analyses, based on current incremental borrowing rates for similar types of instruments.

In connection with the merger, on November 8, 2019, BB&T and SunTrust announced that, subject to closing and other customary closing conditions, First Horizon Bank, a wholly owned subsidiary of First Horizon National Corporation, entered into an agreement to acquire 30 branches located in North Carolina, Virginia and Georgia from SunTrust Bank, a wholly owned subsidiary of SunTrust, to satisfy regulatory requirements in connection with the Merger. There are approximately $400 million in loans and leases and $2.4 billion in deposits that will be divested as part of this transaction, which is expected to close in 2020.

The following table presents unaudited pro forma results as if the merger between BB&T and SunTrust occurred on January 1, 2018 and includes the impact of amortizing and accreting certain estimated purchase accounting adjustments such as intangible assets as well as fair value adjustments to loans, deposits, and long-term debt. Merger-related expenses that occurred at the effective date of the Merger or subsequent to the Merger are not reflected in the pro forma amounts. For the year ended December 31, 2019, the Company incurred $298 million of costs related to the Merger which were included in Merger-related and restructuring charges in the Consolidated Statements of Income, and consisted primarily of advisory, legal, banker, and accounting and consulting fees. These costs include $127 million of costs directly related to the transaction, which are reflected in the the year ended December 31, 2018 in the table below. Cost savings are not reflected in the pro forma amounts. The pro forma information does not necessarily reflect the results of operations that would have occurred had BB&T merged with SunTrust on January 1, 2018.