Banks may be showing renewed interest in the insurance brokerage business, if BB&T Corp.'s $500 million acquisition of the North American brokerage business of Cooper Gay Swett & Crawford Ltd. is any indication.

The deal, announced Feb 24, consists of Cooper Gay's U.S. wholesale insurance brokerage operations, specialty managing general agencies including J.H. Blades & Co. and its U.S. reinsurance brokerage business, Cooper Gay said. But it doesn't include Creechurch International Underwriters Ltd., a specialty managing general agent that operates in Canada.

“Banks seemed to be reducing their interest in broker acquisitions in recent years, due in part to a need to focus on adapting to changes in their core market, (such as) capital requirements, regulatory and compliance efforts,” said James Auden, managing director of insurance at Fitch Ratings Inc. in Chicago.

The deal for the Cooper Gay operations is expected to add more than $200 million in revenue annually to BB&T Insurance Holdings Inc., the brokerage unit, and diversify its business, BB&T Corp. said.

“While there has been a high volume of broker acquisition transactions in the last few years, the number completed by banks has significantly declined while the number executed by private equity-owned organizations has increased meaningfully,” said Mr. Auden.

“This transaction may indicate a shift in this trend, which would likely promote higher valuations for future deals if more suitors are seeking acquisitions,” added Mr. Auden.

In contrast, observers do not believe the deal signals a large movement by retailers to return to the wholesale segment.

The deal, subject to regulatory approval, is expected to close in the first half of this year, BB&T said.

“Swett & Crawford is a wonderful company with many very talented employees. Our cultures are well-aligned,” John Howard, chairman and CEO of BB&T Insurance, said last week in an email. “We are both focused on providing exceptional service to our clients.”

Mr. Howard succeeded H. Wade Reece, who retired Dec. 31 after more than 30 years with the company.

BB&T Insurance is the largest general broker with wholesale business, according to the latest Business Insurance ranking.

The acquisition excludes Swett & Crawford's non-U.S. business, which accounts for less than 5% of its total revenue, BB&T said in a statement.

“Swett & Crawford nicely enhances our insurance business and increases and diversifies our overall fee-income profile,” Kelly S. King, BB&T's Winston-Salem, North Carolina-based chairman and CEO, said last week in a statement.

With $200 million in revenue and a $500 million price tag, the deal “appears to have gone for a market price,” Timothy J. Cunningham, managing director at Chicago-based investment banking and consulting firm Optis Partners L.L.C., said last week. The deal will “likely have some strategic value,” he said.

In announcing the $500 million cash deal, Cooper Gay Group CEO Steve Hearn said the proceeds would allow Cooper Gay to “transform our business” and “build for the future with a fresh outlook.”

The deal is credit-positive for Cooper Gay, Bruce Ballentine, vice president and senior credit officer at Moody's Investors Service Inc. in New York, said last week.

“The plan to sell was a positive step for creditors, and reaching an agreement is a further positive step,” said Mr. Ballentine.

On Feb. 26, Standard & Poor's Corp. upgraded Cooper Gay Swett & Crawford to B with a stable outlook from B- and removed it from review with developing implications.

“The stable outlook reflects our view that the company will remain debt-free following transaction close,” S&P said in its report.