Texas Capital Bancshares is selling its insurance premium finance subsidiary in a $3.4 million deal that gives it cash to put toward “creating the flagship full-service financial services firm in Texas,” the company said.
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The Dallas-based parent of Texas Capital Bank agreed to sell its BankDirect Capital Finance business, including the subsidiary’s $3.1 billion loan portfolio, to AFCO Credit Corp. AFCO is a subsidiary of Truist Financial Corp.
“The sale of BankDirect represents an important milestone for Texas Capital, further enabling us to re-focus our capital and expense base consistent with our strategy of creating the flagship full-service financial services firm in Texas,” said Texas Capital CEO Rob C. Holmes in a statement. “The sale follows a deliberate process designed to maximize shareholder value, strengthen our balance sheet, simplify our business model and free up incremental resources to be redeployed to our core businesses. ”
The all-cash deal represents an 8.5% premium compared to the purchased loan portfolio value, according to Texas Capital.
Texas Capital said the deal will improve its loan-to-deposit ratio – an important measure of banking financial condition. The sale is expected to close later this year, subject to regulatory approvals.
Truist characterized the deal as a strategic investment and said BankDirect’s loan portfolio broadens its life insurance business. The loan portfolio includes both property and casualty and life insurance products across a national geographic footprint.
“The addition of BankDirect expands our team, further diversifies the risk management solutions we can provide our clients and creates new opportunities to fulfill our purpose to inspire and build better lives and communities,” said Truist Chairman and CEO Bill Rogers in a statement. ■
A strong storm that originated over the Pacific has tracked through the Great Basin and is currently transitioning across the Rockies to redevelop across the central High Plains later today into early Saturday morning.