BB&T to Get Lending Synergy in Deal for Premium Financier
Gjertsen, Lee Ann, American Banker
BB&T Corp.'s deal to buy Southeastern Fidelity Corp. both expands its premium finance business and adds opportunities for synergies between lending and insurance.
Rick Fowler, a senior vice president and the nonbank acquisitions manager, said the deal to buy the Tallahassee, Fla., premium finance company "really has some positive synergies for us, and it complements an existing business we already have, which is Prime Rate."
BB&T announced its plan to buy Southeastern Fidelity on Wednesday.
Both Southeastern Fidelity and Florence, S.C.-based Prime Rate Premium Finance Corp., which BB&T bought in 1995, finance premium payment plans for underwriters and insureds.
If a customer wants to pay his or her insurance premium in installments -- monthly or quarterly, for example -- the premium finance company pays the insurer for the whole contract period, then receives the customer's periodic payments, plus fees.
Mr. Fowler said that insurance agents often coordinate these arrangements, since they are the ones dealing with the customer.
BB&T has one of the largest insurance operations in the country, he noted, and so has lots of opportunities to refer business to both Southeastern and Prime Rate.
The deal is a "double play," Mr. Fowler said. "We pick up a business that has a financial component to it, that also fits within the framework of our insurance business."
BB&T said it intends to combine Southeastern with Prime Rate after the deal closes. …