What happened

Shares of BB&T (NYSE:BBT) climbed 10% in April, according to data provided by S&P Global Market Intelligence, as the regional banking company reported first-quarter earnings that came in ahead of expectations, along with progress in its efforts to complete its planned $28 billion acquisition of SunTrust Banks (NYSE:STI).

So what

BB&T, which has been a steady consolidator of banks throughout the Southeast for decades, in February announced plans to buy SunTrust in what would be the biggest bank transaction since the financial crisis. The deal would create the sixth largest bank in the U.S., with more than $440 billion in assets.

A banker with customers.

Image source: Getty Images.

For now, the two banks remain independent, and BB&T on April 18 reported noisy first-quarter earnings of $1.05 per share, slightly ahead of the $1.03 expectations. The quarter was marred by merger-related charges, but investors for the most part were more focused on getting an update on how the deal planning was going than they were with the company's quarterly results.

CEO Kelly King said on BB&T's post-earnings call that the merger planning is "going extraordinarily well," with management at the two companies holding weekly meetings to review and plan for the merger. Regulators held public meetings on the deal in late April and early May, and King said they are on target to get the deal done before year end:

We will be submitting our joint capital plan and stress test in May. We'll be continuing to name additional business leaders as we move down through the organization. We expect to announce our new brand and new name in late second quarter. We will be finalizing the divestiture commitments and undertake the marketing process as we head into the second quarter, and then the shareholder vote is expected in the early third quarter.

Now what

It's highly unlikely regulators will block the transaction, but dealing with regulators and other pre-merger planning is likely going to be a distraction to both management and investors in the months to come and could limit the bank's near-term upside relative to its peers.

The distraction is a risk worth taking, because BB&T needs to do this integration right. The company is an experienced acquirer but has never taken on a project as large as SunTrust.

BB&T has historically been among the best performing U.S. banks, and the SunTrust deal gives it a chance to extend its playbook over a much larger footprint. Investors are eager to see signs the deal is progressing as planned.