(Reuters) -Cadence Bank will sell its insurance brokerage unit to Arthur J Gallagher for $904 million to narrow its focus and redeploy capital to its core banking business, the lender said on Tuesday.
Banks have been retreating from secondary ventures to build capital and shore up their core franchises, as high borrowing costs and tough regulation threaten to upset growth.
Illinois-based insurance brokerage Arthur J Gallagher said the deal will help its property, casualty and employee benefits presence in Texas and across several states in the Southeast.
"The sale will allow us to focus on what we do best," Cadence Bank CEO Dan Rollins (NYSE:ROL) said in a statement.
A media report earlier this month said Truist Financial (NYSE:TFC) was also in talks to sell its insurance business for $10 billion.
Cadence Bank's shares rose nearly 9% to $21.43.
Its construction, real estate, manufacturing, healthcare, professional services and high-net-worth personal lines businesses will also get a boost, Arthur J Gallagher added.