Sioux Falls, S.D.-based Pathward Financial is selling its commercial insurance premium finance business to Delaware-based finance company AFS IBEX Financial Services.
AFS IBEX plans to pay cash for the $617 million insurance business plus a $31.2 million premium. The deal is expected to close by the end of the fiscal year.
Pathward Financial CEO Brett Pharr said the sale helps the $7.4 billion bank deliver on its fiscal 2025 strategy. He noted the sale also “supports our strategy of simplification and gives us the opportunity to accelerate our rotation into higher yielding assets in verticals where we believe we have a competitive advantage.”
Pathward expects the deal “will be relatively neutral” to net income and earnings per diluted share for this fiscal year. The company expects the sale will be increasingly accretive as it redeploys the released capital and deposits into other commercial finance loans and leases.
AFS IBEX Financial Services is a subsidiary of Delaware-based premium finance loan originator and servicer Honor Capital Holdings. The company has offices in Massachusetts, New York, Florida, Texas and California.
Clearwater, Fla.-based financial services company Colonnade Securities LLC served as financial adviser to Pathward.
