BB&T Unit Closes Regions Insurance Group Deal: More to Come?

With an aim to further expand its insurance business, BB&T Corporation BBT through its wholly owned subsidiary, BB&T Insurance Holdings, Inc. has acquired Regions Insurance Group. The financial terms of the transaction, announced in April, were not disclosed. Regions Insurance is a subsidiary of Regions Financial Corporation RF.

Regions Insurance, providing property and casualty insurance and employee benefits products, serves more than 60,000 clients across the Southeast, Texas and Indiana through 30 offices.

The transaction further strengthens BB&T’s wholesale and retail insurance channels. The deal positions the company as the fifth largest insurance broker in the United States and globally.

With the closure of this deal, roughly 50% of insurance brokerage revenues will come from BB&T Insurance's retail network. Notably, in June, BB&T Insurance announced rebranding its BB&T Insurance Services retail broker as McGriff Insurance Services, which includes Regions Insurance.

Moreover, at the time of announcement of the transaction, BB&T had projected a rise in annual insurance brokerage revenues to roughly $2 billion. Further, as part of the deal, the president and CEO of Regions Insurance, Rick Ulmer as well as other associates will join BB&T Insurance’s senior leadership and other positions.

What Next?

With BB&T having a proven track record of successfully integrating acquired businesses, this insurance transaction will improve the company’s top-line growth. The bank plans to further expand its footprint in Texas and Pennsylvania through such opportunistic acquisitions, with the key aim to increase revenues from insurance operations.

Further, BB&T’s strong liquidity position will continue supporting its inorganic growth efforts.

This Zacks Rank #3 (Hold) stock has gained 2.9% so far this year against the industry’s decline of 5.3%.

Stocks Worth a Look

Better-ranked bank stocks include M&T Bank Corporation MTB and East West Bancorp, Inc. EWBC. Both these stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Current-year earnings estimates of M&T Bank have been revised marginally upward in the last 60 days. Further, over the past year, the company’s shares have rallied 3.5%.

East West Bancorp’s current-year earnings estimates have moved 1.3% upward over the last 60 days. The company’s shares have gained 9.6% over the past year.

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