BB&T bank said it has entered an agreement to purchasepremium finance company AFCO Credit Corp. and its Canadianaffiliate, CAFO Inc., from Pittsburgh-based financial servicescompany Mellon Financial Corporation.

Terms of the deal were not released. The transaction is subjectto regulatory approval and is expected to be completed during thefirst quarter of 2007.

The Winston-Salem, N.C.-based BB&T said the deal would movethe bank from the ninth to the second largest provider ofadditional credit and working capital.

A spokeswoman for BB&T said AFCO and CAFO have a total of $5billion in loan originations, or the total amount financed. Sheadded that this is not part of the banks insurance business, buttied to its specialized lending arm.

Premium finance is a loan that enables businesses and consumersto pay their premiums in installments.

BB&T already operates Prime Rate Premium FinancialCorporation Inc. The target acquisitions would operate separatelyfrom Prime Rate Premium and continue to use their current brandnames as units of BB&T's specialized lending division.

Daryl Zupan, president of AFCO and CAFO, and his existing seniormanagement team will continue to oversee the organization's 16offices throughout the U.S. and Canada.

AFCO was founded in 1954 and acquired by Mellon in 1993 from TheContinental Corporation. The company has clients that include largeconglomerates, medium-sized corporations, municipalities,professional practices, sole practitioners, groups andassociations.

AFCO's U.S. offices are in Atlanta, Baltimore, Boston, Chicago,Dallas, Kansas City, Los Angeles, Miami, New York City, Pittsburgh,San Diego, San Francisco and Seattle. CAFO offices are in Edmonton,Montreal and Toronto.