SunTrust Banks in Atlanta will sell its commercial insurance premium finance subsidiary, Premium Assignment Corp., to IPFS Corp. in Kansas City, Mo., at the end of the year, the company said Monday.
SunTrust has owned the Tallahassee, Fla.-based business, which finances commercial-line insurance premiums nationwide, since 1994 when it acquired Andrew Jackson Savings Bank. It had roughly $1.4 billion of assets on June 30.
In a note to investors, FIG Partners in Atlanta said it suspected that the insurance business no longer fit into SunTrust’s wholesale banking focus. While wholesale banking generated about 44% of SunTrust’s pretax earnings in its latest filing, the commercial premium finance business accounted for only around 0.4% of pretax income, FIG estimated.
Hugh S. Cummins III, the wholesale segment executive at SunTrust, said in a news release that the sale would allow the $207 billion-asset SunTrust to focus on its wholesale banking businesses “while generating value for SunTrust shareholders."
He added that he expects IPFS to retain all of Premium Assignment’s employees.
SunTrust Robinson Humphrey and Colonnade Securities served as the financial advisers to SunTrust. Lazard served as the financial adviser to IPFS Corp.