GE Capital puts restaurant finance business on the table

First Tennesse bank, regional bank subsidiary of First Horizon, is to acquire the southeast and southwest regional loan portfolios from GE Capital’s restaurant franchise finance business in a bid to move into the market.

The transaction involves approximately $637 million of loans, which will be combined with existing First Tennessee relationships to establish a restaurant franchise finance specialty lending business. The new line of business will have more than $800 million of outstanding loans after the transaction closes, which is expected to happen later this year.

David Popwell, president of banking for First Horizon, said: “We already have several commercial bankers who work closely with restaurant franchise customers. As we build out our new restaurant franchise finance specialty line of business, we will be better able to meet customer needs and court new customers based on the strength of our expanding expertise.”

Separately, Sterling National Bank, the principal subsidiary of Sterling Bancorp has announced that it has entered into a definitive agreement with GE Capital to acquire a separate portfolio with approximately $190 million of performing restaurant franchise financing loans.

Borrowers within this portfolio are primarily located in Sterling’s core markets of New York, New Jersey, Pennsylvania, and Connecticut. The transaction is expected to close in the third quarter of 2016.

“The acquisition of this loan portfolio supports the continuation of our strategy to leverage existing infrastructure and expertise within commercial finance,” stated Tom Geisel, president of Sterling’s specialty finance division. “These relationships will be managed within our equipment finance group given the loan structures and client businesses are closely aligned. Executing on our team-based delivery model, we welcome these new relationships and will work to build upon them.”