Trying to capitalize on its position as a leading mortgage lender in Michigan, Standard Federal Bancorp has acquired an agency that specializes in homeowners insurance.
The Troy, Mich., thrift company bought Curti Insurance Agency Inc., Sterling Heights. The companies did not disclose the price, but chief financial officer Joseph Krul said Standard paid less than $5 million.
"We don't want to release a forecast of sales volume, but we have 400,000 mortgage customers who will be a nice population to go after," Mr. Krul said.
Standard Federal is emulating two larger state rivals that have bought insurance agencies specializing in property and casualty insurance this year. First American Bank Corp., Waterford, and Comerica Inc., Detroit, each bought a small independent agency.
Mr. Krul said $15.4 billion-asset Standard Federal's insurance initiative will focus on the consumer market. But it does plan to sell insurance to businesses while beefing up its corporate banking business.
Standard Federal believes its leading market share in home mortgage lending should command discount prices for insurance from underwriters. To help its cause, the company is planning direct marketing campaigns to its mortgage customers, Mr. Krul said.
The thrift originates 250 mortgages a month, Mr. Krul said.
He added that it would offer other coverages, including auto, life, and employee-benefits products. The insurance program is a small part of the company's plan to offer comprehensive financial services, he said.
Standard Federal started selling annuities and mutual funds in January. "All banks are trying to lock in the family household and give them one- stop shopping," he said.
The new operation will do business as a wholly owned subsidiary under the name Standard-Curti Insurance Agency Inc. The company's general manager and treasurer, Anthony A. Curti, will be the new unit's president. His father, Cataldo, the agency's founder, will oversee commercial insurance initiatives.
Anthony Curti said his company, a relatively small outfit with only 25 employees, was seeking to be "backed by a prominent institution." Competition among insurance agencies in Michigan is forcing a consolidation, he said. The Curti agency, with annual revenues of $20 million, offers policies from more than 50 insurance carriers, he said.
