BancFirst Corp. of Oklahoma City is buying 75% of Century Life Assurance Co., its main insurance supplier, and plans to sell more of its products.
The insurer is owned by the family of the banking company's chief executive officer. The deal, which is expected to close Jan. 1, was announced Monday; the price was not disclosed. Century Life underwrites credit life and other life products. BancFirst Corp. already sells some of its products but plans to sell a wider variety, too.
The banking company, whose $2.5 billion of assets makes it one of the state's largest, has 78 branches in 43 communities. Century Life has $23.2 million of assets and $6.4 million of equity capital.
The insurer's products "fit in with a range of financial services products that we offer as a commercial bank," said Joe T. Shockley Jr., executive vice president and chief financial officer of BancFirst, BancFirst Corp.'s main bank. The bank's commercial or consumer borrowers might also need life insurance "to protect against an unfortunate situation," he said.
Buying control of Century Life from family of David Rainbolt, BancFirst Corp.'s CEO, will "expand the profitability of BancFirst," Mr. Shockley said. The family is also the largest shareholder of BancFirst Corp.
Most BancFirst branches already sell Century Life products, Mr. Shockley said, but the bank will now do more to push them. It will not add other insurers' products, he said.
BancFirst Corp. can own an insurance underwriter because it was rechartered as a financial holding company early this year.
Lana Chan, an analyst in New York with CIBC World Markets, said buying control of Century Life "is definitely a good step toward building the insurance component" of BancFirst's revenue base.
Insurance "hasn't been a meaningful component of their revenue stream," she said, but increasing fee income with products such as insurance is among the company's "key strategic objectives."
The purchase will tie the insurance operation more closely to the commercial bank, Ms. Chan said. "They'll be able to put in better incentive programs for their branch-level people."
Mr. Shockley said that most of BancFirst's 78 branches sell only Century Life products, that but some acquired branches still sell those of other companies.
BancFirst's most recent acquisition was $120 million-asset First Southwest Bank of Frederick, Okla., which was purchased in October. Its three branches are still operating under the First Southwest name; merging them into the BancFirst system is expected to take six to nine months.
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