Back to top

SunTrust (STI) to Sell Insurance Premium Finance Subsidiary

Read MoreHide Full Article

With the strategy to focus on core Wholesale Banking operations, SunTrust Banks, Inc. (STI - Free Report) announced an agreement to divest its commercial lines insurance premium finance subsidiary, Premium Assignment Corporation (“PAC”) to Kansas City, MO-based IPFS Corporation. The financial details of the deal, expected to close in fourth-quarter 2017, were not revealed.

Hugh S. (Beau) Cummins, III, Wholesale Segment executive at SunTrust said, “PAC has demonstrated good growth and profitability, and has been led by a successful management team. This transaction aligns PAC with a company that has a proven track record in the insurance sector, and one that will hire all PAC teammates.”

Notably, the transaction is still subject to several customary closing conditions. As of Jun 30, 2017, PAC had $1.4 billion in assets and finances commercial lines insurance premiums in all the states. SunTrust had acquired PAC as part of its deal to buy Regional Investment Corporation in 1994.

SunTrust intends to improve profitability for focusing on Wholesale Banking business. Also, the company is continuing with its loan portfolio diversification plan to increase commercial real estate and commercial and industrial loans.

Several major banks including Bank of America Corporation (BAC - Free Report) , JPMorgan Chase & Co. (JPM - Free Report) and Citigroup Inc. (C - Free Report) have been undertaking measures to strengthen core operations and have divested/closed several non-core businesses. These measures significantly boost profitability and enhance shareholders’ value.

More Stock News: This Is Bigger than the iPhone!

It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.

Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.  

Click here for the 6 trades >>



More from Zacks Analyst Blog

You May Like