A trio of banks will buy more than $1.4 billion in franchise loans from GE Capital.
First Horizon in Memphis, Tenn.; Sterling Bancorp in Montebello, N.Y.; and Wintrust Financial in Rosemont, Ill., reached separate agreements to buy loan portfolios.
The $27 billion-asset First Horizon said in a press release Monday that it will form a restaurant franchise business after agreeing to buy $637 million in loans from GE Capital. First Horizon said it will pay cash for restaurant franchise loans in the southeastern and southwestern United States. The company did not disclose the price of the deal, which is expected to close in the third quarter.
First Horizon said it expects the deal to be immediately accretive to its earnings per share. When the deal closes, First Horizon will have more than $800 million in restaurant franchise loans.
"Our bankers are very good at understanding businesses, building relationships and offering products to meet the unique needs of customers in our specialty lines of business," David Popwell, First Horizon's president of banking, said in the release. "We already have several commercial bankers who work closely with restaurant franchise customers. As we build out our new restaurant franchise finance specialty line of business, we will be better able to meet customer needs and court new customers based on the strength of our expanding expertise."
Separately, the $23 billion-asset Wintrust said it will buy about $581 million in performing loans and related relationships from an affiliate of GE Capital Franchise Finance. The deal involves loans to franchise operators — primarily quick service restaurant concepts — in the Midwest and western United States. Wintrust did not disclose the price it agreed to pay; the deal is expected to close in the third quarter.
"This transaction represents the continued strategic expansion of our franchise finance business," Edward Wehmer, Wintrust's president and chief executive, said in a press release. "It is a business we know well and the loans acquired are to firms that, in most cases, are well known to our experienced staff."
Wintrust said the transaction should be "slightly accretive" to this year's earnings per share.
The $12.9 billion-asset Sterling said in its press release that it will buy $190 million portfolio of performing loans in a deal that should close in the third quarter. The company said that borrowers within the portfolio are primarily located in Sterling's core markets of New York, New Jersey, Pennsylvania and Connecticut.