So can we all agree we are going to be sc--wed once the deal closes? If you look at our earnings, insurance is the primary source of revenue for the company. We can’t rely on the gravy train from the sell to last long.
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I agree with the difference in carrier losses compared to broker revenue, however once the carriers take care of the last few hold states that actually regulate them, they are going to aggressively “renegotiate” those commission fees.
They needed more cash so they could keep giving themselves huge salaries and bonuses.
The way they try and spin the sale is sickening.
HR sent out a notice to TIH teammates with a pension that TIH won’t be participating post close. You’ll keep your accrual, of course, and even those under 5 years will be vested, but that’s it. Doesn’t say if you’ll get credit for 2024 (normally you need 6 months of service and a Q2 close will be shy of that).
The repercussions begin:
Fitch Ratings downgraded Truist Financial's credit rating, calling the insurance business it is selling an "important source of revenue and business diversification
The one-notch downgrade took Truist to an 'A' rating from 'A+.'
Earlier this week, the North Carolina-based bank said it would sell its remaining stake in Truist Insurance Holdings to an investor group led by private equity firms Stone Point Capital and Clayton, Dubilier & Rice.
Truist swung to a loss in the fourth quarter as higher interest rates hammered the bank.
Moody’s Investors Service put the bank on review for a downgrade late Tuesday, saying the sale will mean Truist will be less diversified and have greater reliance on net interest income.
"As a consequence of these factors it will likely have greater earnings volatility and potentially less resilience to unexpected losses," Moody's said.
“Given climate and storm activity in the last 10 years, there are literally 0 models that predict less of that activity in the next 10”
"There are literally 0 climate models that accurately predicted the previous 20 years, so…"
No doubt, but that doesnt change the fact that every carrier still uses them.
“Given climate and storm activity in the last 10 years, there are literally 0 models that predict less of that activity in the next 10”
There are literally 0 climate models that accurately predicted the previous 20 years, so…
Use the insurance sale for stock buybacks, wow!
Maguire added that the company could replace the insurance unit's earnings through a $23 billion balance-sheet repositioning, in which it would reinvest the securities into a mix of cash, shorter-duration securities and off-balance sheet hedges, while still maintaining "substantial capital to play offense." He added the deal also increases Truist's ability to resume share repurchases.
selling off the crown jewel to keep the ship afloat. Just delaying the inevitable. Kelly sold BB&T employees&shareholders down the river to a bunch of SunTrust grifters.
Not odd that stock wasn’t affected. The market has no trust in this leadership.
It’s odd that this didn’t affect the stock.
Your fearless leader has spoken. All is well!
Truist stated: “The sale of TIH and reinvestment of the $10.1 billion of expected cash proceeds are estimated to be $0.20 dilutive to 2024 earnings per share, assuming the sale closed at the beginning of 2024 and the proceeds from the sale were reinvested in cash yielding 4.5%.
“Following closing, Truist intends to evaluate a variety of capital deployment options, including a potential balance sheet repositioning with a goal of replacing TIH’s earnings. Any future actions would be subject to market conditions and other factors.”
"Most insurance companies are having a tough time, there are huge P&C losses from storms, flooding, and fires."
"You should probably know this before sharing your analysis: Insurance brokerages are different than insurance companies. Insurance brokers' revenue is generally tied to premiums, which have been going up due the risks that you mentioned. Insurance broker revenues are soaring."
But what you should know is that TIH is not just a broker...please review all of the wholly owned subs of TIH and/or review the financial statements. Good or bad, the sale does unload expensive risk. Its also more expensive for brokers to operate in high risk high premium market (significantly higher customer activity and carrier underwriting requests, both of which require agents). The margins are no where near as fat as they once were. Given climate and storm activity in the last 10 years, there are literally 0 models that predict less of that activity in the next 10. Its a get your cash while you can kinda deal.
@tjj+1raBE4TF - Guarantee you bill and execs will say we need another RIF layoff initiative after Q1 2024 financials are released. More layoffs are certainly going to occur this year. Project STAR certainly is not the end of layoffs for the year
When your broker premiums “soar” but so do your expenses, and your bottom line makes your borderline unprofitable, your business model is broken.
If you didn't know before the sale. This bank is in trouble and needing cash now. Fed isn't helping to plug the hole by holding rates.
"Most insurance companies are having a tough time, there are huge P&C losses from storms, flooding, and fires."
You should probably know this before sharing your analysis: Insurance brokerages are different than insurance companies. Insurance brokers' revenue is generally tied to premiums, which have been going up due the risks that you mentioned. Insurance broker revenues are soaring.
Bill and execs get rid of anything and everything that was heritage BB&T. The divestiture of the insurance business was a hBBT entity.
The sell of insurance at this point in time is a good thing for the bank overall. The problem is no one trust that this management team, Bill specifically and this BOD to make the right decisions with this windfall and truly grow the core businesses and propel this bank to be the leader in the southeast. No one in their right mind believes Bill, Beau and Mike can reverse the downward trend of this institution.
The messaging is very bizzare rn. TIH folks being told that it was Insurance driven for independence but the writing clearly states Truist needs the capital. Just strange situation all around.
CSBB generates the lions share of revenue at Truist, that’s true at most banks. That’s all types of credit cards, small business loans, auto loans, bank fees. Most insurance companies are having a tough time, there are huge P&C losses from storms, flooding, and fires. Regardless of what people want to believe, that business does not make money and it’s getting worse.
Where does Truist generate the most revenue/earnings from at this time? Serious Q
You're living in a fantasy world if you think anyone will be interested in buying this bank. I don't think it's well known, but Kelly had a lot of contact with Silicon Valley Bank maybe 10 years ago. He called it "best practice" sharing. I'm highly confident he was comfortable modeling their interest rate strategy. So why would anyone buy this bank when they can acquire the customers during the receivership process after the fail? What else do you have here? Leading edge systems (fail). Top talent (fail). Industry beating risk management (lol...fail). The Kelly King Leadership Institute (win...kidding, fail)
Another terrible decision by the worst bank CEO in America. To bad we can't sell BillyBob.
Not sure if just me but this is the first purpose corner I’ve seen with comments turned off…
Clearly positioning the Bank for a sale by jettisoning all non-bank assets. Bill's last con will generate more money for him and his cronies then they'll ever be able to spend, everyone else is sc--wed.
Don’t agree with you at all actually. We are a regional deposit powerhouse and we can energize this rocket ship with the additional capital
If you look at earnings you see nothing of the sort.
Insurance generates a lot of fee income, but doesn’t even come close to generating the kind of interest income the other major divisions produce. In fact, you will see that Insurance spent nearly all the revenue it earned on the slide in the appendix specifically about insurance. Insurance managed to grow its revenue by 7% and its expense by 12%, that’s worse than a wash. That is why it is being sold.