Truist Financial Corp., which employs thousands of Georgians, announced Tuesday it will sell the majority stake in its insurance division.
The Charlotte-based bank, which formed in 2019 in a merger of BB&T and Atlanta-based SunTrust, is selling the remainder of Truist Insurance Holdings to an investor group led by private equity firms Stone Point Capital and Clayton, Dubilier & Rice. The deal is valued at $15.5 billion, according to a news release.
Truist Insurance Holdings is the fifth-largest insurance brokerage firm in the U.S. with roughly 10,000 employees across the country. A Truist spokesperson declined to say how many of those workers are based in Georgia. The most recent company information puts Truist’s entire Georgia workforce at 7,400.
The sale comes amid wider changes in the banking industry as companies prepare for potentially tougher capital rules, according to Reuters. Banks have reaped large gains from the Federal Reserve’s interest rates hikes during the COVID-19 pandemic, but they’re now grappling with more tepid revenues as high interest rates limit loan growth.
Truist, the seventh-largest U.S. bank with more than $535 billion in assets, reported a net loss of more than $5 billion during the fourth quarter, compared to $1.7 billion in net income a year prior. The company plans to reinvest more than $10 billion from the insurance arm sale, which will help bolster the company’s core banking business.
“We are pleased to have reached an agreement to sell (Truist Insurance Holdings) as it will further strengthen our balance sheet, afford us the ability to maintain our earnings profile and create significant ongoing flexibility to invest in our core banking franchise,” Truist Chairman and CEO Bill Rogers said in the release.
Last year, Truist agreed to sell 20% of its insurance business to a group let by Connecticut-based Stone Point. CD&R, which is based in New York, and Stone Point were joined by Abu Dhabi-based Mubadala Investment Co. and other co-investors in the sale. The release said Truist Insurance Holdings “will be well-positioned to grow” due to the financial backing of the new ownership group.
“Together with our capital partners, we will remain focused on growth and look forward to the opportunity to strengthen our relationships with our clients and business partners — more than ever before,” Truist Insurance Holdings Chairman and CEO John Howard said in the release.
The transaction is expected to be complete during this year’s second quarter.
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