![]() Such strategic efforts will likely continue to support revenue growth in the upcoming quarters amid lower interest rates and faltering loan demand. Over the years, these deals have resulted in cost and revenue synergies.Īlso, Truist is planning to continue rationalizing branch footprint, with roughly 800 branch consolidations targeted by first-quarter 2022. Legacy BB&T relied heavily on buyouts to grow, and expand footprint and market share. This is the first major deal for Truist Financial since its formation in December 2019 following the merger between BB&T Corp and SunTrust Banks. The deal is still subject to standard licensing and regulatory approvals, and satisfaction of customary closing conditions. Over the long term, the company expects the acquisition to be accretive to its profitability metrics including return on assets, return on tangible common equity, efficiency ratio and EPS growth. However, if the deal replaces the company’s planned share buyback plan, then it will lead to 1% cash EPS dilution in 2023.įurther, Truist expects the deal to help deploy its strong liquidity and result in reduction of approximately 50 basis points in its Common Equity Tier 1 ratio. The transaction will result in 2% cash accretion to Truist’s earnings per share (EPS) in 2023 in case it is financed through excess cash. The company expects the deal, likely to close in the fourth quarter of 2021, to be financially attractive. Truist already has past business relationship with Service Finance, having purchased more than $2 billion of loans from it since 2018. ![]() Story continues Financial Benefits & Other Details We believe this transaction maximizes value for ECN shareholders and puts SFC in the best position to succeed in its next phase of growth.” ![]() Steven Hudson, CEO of ECN Capital, said, “Truist has been a long-time partner of SFC and is best positioned to build on the successes we’ve had over the last several years. Maguire further added, “We're excited to partner with Mark Berch and the entire Service Finance team.” They will be joining the POS lending unit of Truist's National Consumer Finance and Payments group, and remain based out of Boca Raton. Mike Maguire, head of National Consumer Finance and Payments at Truist, noted that Boca Raton, FL-based Service Finance will expand the scale and capabilities of Truist’s wholesale payments business in lucrative POS industry. Hence, the deal will make Truist one of the prominent providers of POS lending solutions. ![]() This makes Service Finance one of the top three home improvement POS finance companies. In fact, the same has grown almost 30% annually over the past three years. ![]() It helps in providing prime and super-prime borrowers with finance for a wide range of home improvement products and projects.Īpproximately 80% of Service Finance's loan applications are completed on its mobile application, with originations projected to exceed $2.5 billion this year. Service Finance uses proprietary technology to deliver innovative payment solutions to home improvement dealers and contractors. Following the completion of the deal, Service Finance (a wholly owned subsidiary of ECN Capital) together with Sheffield will serve more than 250 manufacturers, associations and other sponsors. Service Finance is one of the leading providers of POS financing solutions for the home improvement industry.Īt present, Truist’s POS lending operation includes Sheffield Financial, which is a leading POS lender in the outdoor power equipment, power sports, trailer and other consumer products segments. With an aim to further augment its point-of-sale (POS) lending business, Truist Financial TFC has inked a deal to acquire Service Finance Company, LLC from Canada-based ECN Capital Corp. ![]()
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