First Niagara Bank’s purchase this week of an Ithaca, N.Y., agency gave its insurance subsidiary a foothold in an area it considers “very attractive” — and where a local competitor, Tompkins Trustco Inc., bought an agency at the turn of the year.
First Niagara Risk Management Inc., the bank’s insurance unit, announced the purchase Tuesday of the L.A. Lama Insurance Agency, which has annual premium of about $7 million. It was the bank’s eighth agency purchase since 1999, all in upstate New York.
John D. Hoffman, the unit’s chief executive officer, said Wednesday, “The Lama agency is the preeminent agency in Ithaca, and that area is very attractive to us.”
“Once we feel it fits our model, our biggest criteria [are] for product compatibility” and geographic placement, he said.
Daniel E. Cantara, a First Niagara Risk Management senior vice president, said the purchase complemented its lending and banking presence in Tompkins County, where it has three offices, and furthers the company’s strategy to establish financial service centers in key upstate markets.
Tompkins Trustco is No. 1 in deposit market share in the county, at 54.4%. First Niagara Financial Group Inc., the thrift-company parent of the bank and insurance unit, trails M&T Bank Corp., HSBC Holdings PLC, and two community banks, in sixth place, with a deposit share of 5.1%, according to Federal Deposit Insurance Corp. data.
Tompkins Insurance Agencies Inc., which had initiated its business in 2001 with purchases of two agencies in western New York, far from its home county, said in early January that it had bought Banfield & Associates Inc. in Ithaca on Dec. 31.
First Niagara decided to buy the Lama agency because it lies in the bank’s footprint, said Mr. Cantara, and because of the agency’s focuses on personal lines and small-business insurance.
The insurance unit’s product line includes personal and commercial insurance; risk management; employee benefits and administration; and life, disability, and long-term-care coverage. Including Lama, First Niagara has the second-largest insurance agency in Buffalo, the eighth-largest in Rochester, and the fifth-largest in the Albany area, ranked by premium.
The thrift company has assets of $7.8 billion and deposits of $5.1 billion.
When First Niagara considers agency deals, Mr. Cantara said, “our focus has shifted a little since we got into the business in 1999. We were largely a commercial agency in western New York, but now through subsequent acquisitions, we have substantial opportunities in Buffalo, Rochester, and Albany.”
“Our focus now is on the potential to cross-sell personal lines and small-business accounts,” he said.
First Niagara is interested in other potential acquisitions, Mr. Cantara said. “We think there are a lot of opportunities for acquisitions in insurance now that some sellers are becoming more realistic about price,” he said, though First Niagara does not currently have any deals on the burner.
The Lockport company is content in its western New York footprint, but expanding outside the region is a possibility if the right deal came along, he said. “We are primarily interested in upstate New York, but if we found an agency that was financially compelling outside the area, we would consider a deal,” he said.
The Lama agency is to be absorbed into First Niagara Risk Management and to continue specializing in property, casualty, life, and employee benefits products. It was established in 1960 and has more than 8,500 individual and business customers in or near Tompkins County. Robert A. Lama is to remain with the company as a vice president.
