Truist explores sale of Afco Credit specialty lending unit - Bloomberg

Truist Financial Corp (NYSE:TFC) is exploring a sale of its specialty lending unit Afco Credit Corp., according to a Bloomberg report, marking the latest move by the regional lender to streamline balance-sheet exposure and refocus on core commercial banking operations. The Charlotte-based bank is collaborating with financial advisers to gauge buyer interest for the insurance premium finance provider, which manages roughly $6 billion to $7 billion in assets.

The lender is currently weighing an outright divestiture of the business alongside options to unload the portfolio assets directly, people familiar with the matter told Bloomberg, noting that the assets are anticipated to attract bids from private credit firms. While final valuation terms remain undetermined at this preliminary juncture, the transaction is expected to command a premium relative to the underlying asset base.

The strategic review signals an early operational pivot under newly appointed Chief Executive Officer Mike Lyons, who took the helm last month following his tenure as head of Fiserv Inc. Lyons is moving to shed tertiary lending divisions in a bid to redirect capital and operational resources toward Truist's branch footprint, digital platforms, and deposit-gathering capabilities that anchor net interest margins.

Afco primarily originates short-term commercial financing that enables mid-market enterprises, including commercial trucking fleets and construction operators, to fund upfront property and casualty insurance obligations. Any divestment would trim Truist's specialized credit commitments during a period when regional banking institutions are carefully optimizing risk-weighted assets against evolving capital expectations.

Truist shares rose approximately 1% following the report, lifting the stock's trailing 12-month advance to 11%. Deliberations remain in their initial phases, and people familiar with the process emphasized that the discussions may not ultimately culminate in a finalized transaction.