Wednesday, September 7, 2022
HomeInsurance LawTexas Capital to promote insurance coverage premium unit to Truist for $3.4bn

Texas Capital to promote insurance coverage premium unit to Truist for $3.4bn

Texas Capital Bancshares has agreed to divest its insurance coverage premium finance subsidiary BankDirect Capital Finance to Truist Monetary in an all-cash deal valued at round $3.4bn.

Upon completion of the transaction, BankDirect Capital will function as a division of Truist’s insurance coverage premium finance enterprise AFCO Credit score Company (AFCO).

Based in 2005, BankDirect Capital Finance provides property and casualty in addition to life insurance coverage merchandise.

The sale kinds a part of Texas Capital’s efforts to re-focus on its core companies and handle bills to create the flagship full-service monetary companies agency in Texas.

The acquisition worth represents an 8.5% asset premium in comparison with the worth of the bought mortgage portfolio as of 30 June 2022.

Texas Capital president and CEO Rob C Holmes stated: “The sale follows a deliberate course of designed to maximise shareholder worth, strengthen our steadiness sheet, simplify our enterprise mannequin and liberate incremental assets to be redeployed to our core companies.

“BankDirect operates a nationwide enterprise and generates fascinating, granular business loans with superior credit score high quality.”

The transaction covers total enterprise unit together with the BankDirect’s fairness pursuits and the related mortgage balances held by Texas Capital Financial institution.

The deal, nonetheless, excludes switch of dad or mum funding, deposits or capital.

Texas Capital stated in assertion: “The divestiture will enhance Texas Capital’s liquidity place because the Mortgage to Deposit ratio is anticipated to say no and the Liquidity Property to Property ratio is anticipated to rise, earlier than giving impact for future redeployment actions.”

Topic to a number of customary closing situations, the transaction is scheduled to shut within the fourth quarter of this yr.



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