Truist: Selling Insurance Brokerage That Streamlines Company and Improves Capital

Truist is selling its remaining stake in its insurance brokerage business at an implied enterprise value of $15.5 billion. The company expects to book a $4.8 billion after-tax gain on the sale that along with some changes in intangible assets will increase the company’s common equity Tier 1 ratio by 230 basis points to about 12.5% under current rules and tangible book value per share by $7.12, or 33%, to around $29. The sale improves Truist’s capital position from below average to above average compared with peers. We don’t anticipate making a material change to our $50 fair value estimate for narrow-moat-rated Truist and assess shares are moderately undervalued.