WINSTON-SALEM, N.C., Aug. 24 2006 – BB&T Corporation (NYSE: BBT) principal subsidiary Branch Banking and Trust Company today said it has entered into a purchase agreement to buy insurance premium finance company AFCO Credit Corporation and its Canadian affiliate, CAFO Inc., from Mellon Financial Corporation (NYSE: MEL).
The transaction, terms of which were not disclosed, is subject to regulatory approval and is expected to be completed during the first quarter of 2007.
“This acquisition is consistent with our announced strategy to add high quality, well-managed specialized lending businesses,” said BB&T Chairman and Chief Executive Officer John Allison. “Partnering with the very experienced professionals at AFCO and CAFO will significantly strengthen our insurance premium finance franchise in the United States, as well as provide entry into Canada – a first for BB&T.”
Insurance premium financing is a loan which enables businesses and consumers to pay their insurance costs over time, improving cash flow and providing additional credit and working capital.
The acquisition would move BB&T from the ninth to second-largest provider of insurance premium financing in the United States and the largest in Canada. BB&T already operates insurance premium finance subsidiary Prime Rate Premium Finance Corporation Inc. AFCO and CAFO would operate separately from Prime Rate using their existing brand names as a unit of BB&T’s Specialized Lending Division.
“AFCO is a firm with a premier brand and more than a half-century of experience in making loans to finance property and casualty insurance premiums. That’s as long as the industry has been around,” said Clarke Starnes, BB&T’s manager of Specialized Lending.
“We are very pleased about the opportunities that our upcoming affiliation with BB&T will represent,” said Daryl Zupan, president of AFCO and CAFO. “It’s also very gratifying to know that BB&T shares our long-standing commitment to exceptional customer service and innovative financing solutions.”
Zupan and his existing senior management team will continue to oversee the organization’s 16 offices throughout the U.S. and Canada.
AFCO, which was founded in 1954 and acquired by Mellon in 1993 from The Continental Corporation, has clients that include large conglomerates, medium-sized corporations, municipalities, professional practices, sole practitioners, groups and associations.
AFCO’s U.S. offices are in Atlanta, Baltimore, Boston, Chicago, Dallas, Kansas City, Los Angeles, Miami, New York City, Pittsburgh, San Diego, San Francisco and Seattle. CAFO offices are in Edmonton, Montreal and Toronto.
Pittsburgh-based Mellon Financial Corporation is a global financial services company that provides financial services for institutions, corporations and high net worth individuals, including asset management, private wealth management, asset servicing, payment solutions and investor services. Mellon has approximately $870 billion in assets under management.
More information about Mellon Financial Corp. is available at http://www.mellon.com.
Winston-Salem, N.C.-based BB&T Corporation and its subsidiaries offer full-service commercial and retail banking and additional financial services such as insurance, investments, retail brokerage, corporate finance, consumer finance, payment services, international banking, leasing and trust.
BB&T operates more than 1,400 financial centers in the Carolinas, Virginia, Maryland, West Virginia, Kentucky, Tennessee, Georgia, Florida, Alabama, Indiana and Washington, D.C.
With $116.3 billion in assets, BB&T Corp. is the nation’s ninth largest financial holding company. More information about BB&T Corp. is available at http://www.BBT.com.