Texas capital

Latest M&A: Texas Capital Sells Insurance Business for $3.4 Billion

Texas Capital Bancshares is selling its insurance premium finance subsidiary BankDirect Capital Finance to AFCO Credit Corporation, part of Truist.

AFCO will support a loan portfolio of approximately $3.1 billion, Texas Capital said in a statement. The all-cash deal is worth $3.4 billion.

Rob Holmes, CEO and Chairman of Texas Capital, said the sale was “an important step” for the company as it would strengthen its balance sheet while allowing Texas Capital to “to refocus our capital and expense base in line with our strategy of building the leading full-service financial services company in Texas.”

Truist’s chief insurance officer, John Howard, said the acquisition of BankDirect would broaden the company’s offering in the life insurance market and expand its geographic footprint.

“BankDirect’s focus on technology and digitalization to improve the customer experience also reflects our strategic initiatives at Truist Insurance Holdings, further demonstrating how aligned our operations are,” he added.

The deal is expected to be finalized in the fourth quarter of 2022.

Meanwhile, New York-based Gouverneur Bancorp and its sister savings and loan company will acquire Citizens Bank of Cape Vincent (CBCV).

The companies have received regulatory approvals for the transaction, they announced this week, with CBCV set to merge with Gouverneur Savings and Loan Association.

CBCV will be renamed Governor Savings & Loan from September 17, according to the acquiring bank, by which time the transaction is expected to be finalized.

Separately, Mississippi-based BankFirst Capital Corporation announced earlier this month that it would acquire Mechanics Bank, also based in Mississippi. The transaction is expected to close early next year subject to regulatory and shareholder approvals.

BankFirst Chairman and CEO Moak Griffin said the merger “Build on and further strengthen our shared beliefs, community focus and commitment to service excellence and relationship banking”.

The announcement of the deal comes after BankFirst revealed in June that it was set to buy Syvamore Bank and its parent company Tate Financial Corporation. This agreement should be concluded by the end of September.

When the two transactions are complete, BankFirst said it would have 47 offices serving Mississippi and Alabama and assets of more than $2.7 billion.

Separately, Colorado’s National Bank Holdings Corporation completed its acquisition of Utah-based Community Bancorporation, the parent company of Rock Canyon Bank. This brings the company’s assets to $8 billion.