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SunTrust Completes Acquisition of Assets of Pillar Financial
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SunTrust Banks, Inc. (STI - Free Report) has successfully completed the acquisition of the assets of the operating subsidiaries of Pillar Financial, LLC. Included in the buyout are Fannie Mae, Freddie Mac, and Federal Housing Administration Agency’s license transfer approvals.
The acquired assets include Pillar Financial's multi-family lending business, comprising multi-family affordable housing, healthcare properties, senior housing, and manufactured housing specialty teams. The deal also includes Chicago-based Cohen Financial's commercial real estate investor services business and mortgage banking business.
In its latest press release, SunTrust’s Commercial Real Estate Executive, Kathy Farrell said, "This acquisition strategically expands the commercial real estate capabilities of SunTrust, making the bank one of a select number of Agency lenders. It also provides Pillar and Cohen clients access to expanded products and capabilities including: bridge loans, equity for affordable housing developments, and a full suite of capital markets capabilities through SunTrust Robinson Humphrey."
The Pillar and Cohen Financial team are expected to join the SunTrust CRE line of business, part of its Wholesale Banking segment.
The deal, announced in October, was aimed at improving SunTrust’s non-interest income. Management expects the deal to increase the company’s Wholesale Banking segment's annual revenues by roughly $90 million, beginning in 2017. It, however, noted that Pillar's efficiency ratio of roughly 80–85% will have a dilutive effect on the company’s overall efficiency ratio. Nonetheless, the acquisition was expected to be accretive to SunTrust’s Return on assets (ROA), Return on equity (ROE) and net income.
Robinson Humphrey advised SunTrust regarding the financials of the transaction. Beekman Advisors acted as the strategic advisor for Pillar.
SunTrust’s shares gained 29% year to date, outpacing the 19.5% growth for the Zacks categorized Major Regional Banks industry.
The company remains well positioned for future growth given its efficient cost management strategies and initiatives to enhance revenues through growth in loan and deposit balances.
Currently, SunTrust carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the same space include Bank of America Corporation (BAC - Free Report) , Comerica Incorporated (CMA - Free Report) and Citigroup Inc. (C - Free Report) .
Bank of America has witnessed an upward earnings estimate revision of 5.8% for the current year, over the past 60 days. Moreover, its share price is up 34.6% year to date. It sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Comerica also sports a Zacks Rank #1. It has witnessed an upward earnings estimate revision of nearly 9.2% for the current year, over the past 60 days. Its share price is up 61.8% year to date.
Citigroup carries a Zacks Rank #2 (Buy) and has witnessed an upward earnings estimate revision of 1.5% for the current year, over the past 60 days. Also, its shares have gained 15.5% year to date.
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SunTrust Completes Acquisition of Assets of Pillar Financial
SunTrust Banks, Inc. (STI - Free Report) has successfully completed the acquisition of the assets of the operating subsidiaries of Pillar Financial, LLC. Included in the buyout are Fannie Mae, Freddie Mac, and Federal Housing Administration Agency’s license transfer approvals.
The acquired assets include Pillar Financial's multi-family lending business, comprising multi-family affordable housing, healthcare properties, senior housing, and manufactured housing specialty teams. The deal also includes Chicago-based Cohen Financial's commercial real estate investor services business and mortgage banking business.
In its latest press release, SunTrust’s Commercial Real Estate Executive, Kathy Farrell said, "This acquisition strategically expands the commercial real estate capabilities of SunTrust, making the bank one of a select number of Agency lenders. It also provides Pillar and Cohen clients access to expanded products and capabilities including: bridge loans, equity for affordable housing developments, and a full suite of capital markets capabilities through SunTrust Robinson Humphrey."
The Pillar and Cohen Financial team are expected to join the SunTrust CRE line of business, part of its Wholesale Banking segment.
The deal, announced in October, was aimed at improving SunTrust’s non-interest income. Management expects the deal to increase the company’s Wholesale Banking segment's annual revenues by roughly $90 million, beginning in 2017. It, however, noted that Pillar's efficiency ratio of roughly 80–85% will have a dilutive effect on the company’s overall efficiency ratio. Nonetheless, the acquisition was expected to be accretive to SunTrust’s Return on assets (ROA), Return on equity (ROE) and net income.
Robinson Humphrey advised SunTrust regarding the financials of the transaction. Beekman Advisors acted as the strategic advisor for Pillar.
SunTrust’s shares gained 29% year to date, outpacing the 19.5% growth for the Zacks categorized Major Regional Banks industry.
The company remains well positioned for future growth given its efficient cost management strategies and initiatives to enhance revenues through growth in loan and deposit balances.
Currently, SunTrust carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the same space include Bank of America Corporation (BAC - Free Report) , Comerica Incorporated (CMA - Free Report) and Citigroup Inc. (C - Free Report) .
Bank of America has witnessed an upward earnings estimate revision of 5.8% for the current year, over the past 60 days. Moreover, its share price is up 34.6% year to date. It sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Comerica also sports a Zacks Rank #1. It has witnessed an upward earnings estimate revision of nearly 9.2% for the current year, over the past 60 days. Its share price is up 61.8% year to date.
Citigroup carries a Zacks Rank #2 (Buy) and has witnessed an upward earnings estimate revision of 1.5% for the current year, over the past 60 days. Also, its shares have gained 15.5% year to date.
The Best Place to Start Your Stock Search
Today, you are invited to download the full list of 220 Zacks Rank #1 "Strong Buy" stocks – absolutely free of charge. Since 1988, Zacks Rank #1 stocks have nearly tripled the market, with average gains of +26% per year. Plus, you can access the list of portfolio-killing Zacks Rank #5 "Strong Sells" and other private research. See these stocks free >>.