Time New York: Wed 13 Dec 21:06 pm  |  Save 15% on H&R Block Online

  
caticonslite_bm_alt

SunTrust Closes Insurance Premium Finance Subsidiary Deal

Zacks

SunTrust Banks, Inc. STI closed the deal 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, announced in September, were not revealed.

The sale is part of SunTrust’s strategy to focus on core Wholesale Banking operations. This was further affirmed by Hugh S. (Beau) Cummins, III, Wholesale Segment executive at SunTrust. He said, “This sale allows SunTrust to continue to focus on our core Wholesale banking businesses, while generating value for our shareholders.”

As of Sep 30, 2017, PAC had $1.3 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 by focusing on Wholesale Banking business. For the nine months ended Sep 30, 2017, the segment reported a 41% year-over-year surge in net income.

Also, SunTrust is continuing with its loan portfolio diversification plan to increase commercial real estate (CRE) and commercial and industrial loans (C&I). As of Sep 30, 2017, CRE and C&I loans were 4% and 47% of total loans held for investment, respectively. Driven by the company’s efforts, these loan portfolios are expected to grow further.

So far this year, SunTrust’s shares have rallied 17.4%, outperforming the industry’s rise of 15.6%.



Currently, SunTrust carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Several major banks including Bank of America Corporation BAC, JPMorgan Chase & Co. JPM and Citigroup Inc. C 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.

Looking for Stocks with Skyrocketing Upside?

Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.

Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.

See the pot trades we're targeting>>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

To read this article on Zacks.com click here.

Zacks Investment Research
<-- You can share this post with your network,
or give us your opinion and leave a comment.
Be sure to check our RSS feeds for updates.