Banknorth Insurance Group plans to step up its agency acquisition pace and branch out into several new states, mirroring its parent's intention to expand outside of New England.
Joseph Fico, the new president of the TD Banknorth Inc. subsidiary, said Wednesday that it would strive to match the Portland, Maine, parent's footprint in the wake of the Toronto-Dominion Bank deal that expanded Bank-north's horizons.
"Our business plan is to expand through acquisition as the bank expands," he said. "The bank is concentrated in New England and upstate New York, and we want to follow their expansion throughout New York, New Jersey, and Pennsylvania."
"We are looking at several agencies right now," said Mr. Fico, declining to elaborate on any pending deal.
Banknorth chairman William J. Ryan has said that he would use a capital infusion from Toronto-Dominion to buy banking companies in New Jersey and the New York metropolitan area. The Canadian bank closed its purchase of a 51% stake in Banknorth on Tuesday.
Mr. Ryan said he would also map out an integration of Banknorth's branch operations with the U.S. operation of Toronto-Dominion, its TD Waterhouse brokerage unit. That ultimately could extend Bank-north's banking presence into Pennsylvania, where the brokerage has offices in Philadelphia and in Jenkintown and King of Prussia, both in the Philadelphia area.
Geography is a key factor in shopping for agencies, Mr. Fico said, but products and services are just as important. "The bank's model is a community banking model, and as we look to acquire agencies, we want community-oriented agencies. And typically it's a general agency that offers personal lines and serves local community businesses," he said.
But he has a structural model in mind for the insurance unit, as well, Mr. Fico said. He was promoted to president of the unit last week from regional president for Massachusetts. (His predecessor, Peter Sparta, died in November at the age of 49 after a long illness.)
In the near term, he needs to find a successor in Massachusetts, he said, but he intends to use a state-president structure for Banknorth Insurance that would match the parent's regional banking presidents.
The insurance and banking parts of Banknorth should work more closely, he said, using the model developed in Massachusetts, where the insurance unit had a 35% revenue increase last year. "It's the fastest-growing office in the insurance group," he said. "The key to our success is working closely with our lending and banking counterparts. I want to develop synergies between those groups."
An agency deal his region did last year exemplified the geographical strategy. "We did complete a Cape Cod agency deal that mirrored the bank's Cape Cod Bank and Trust acquisition," he said.
Though most of Banknorth Insurance's growth has been through acquisition, Mr. Fico said it has expanded de novo as well. "… We opened an office in southern New Hampshire in 2004," he said. "We couldn't find a suitable agency, so we opened an office in Bedford, N.H. We followed a bank office we have there."
Banknorth Insurance wrote $550 million of premium and had $55 million of revenues last year and is looking to improve on this performance through cross-sales to existing customers as well as through acquisitions. "We want to sell more products to existing clients, like cross-selling p/c with employee benefits," he said.
"In Massachusetts, we have a business development officer responsible for meeting with various banking centers. This individual is to, on a daily basis, be in one of those centers and discuss with them what our capabilities are," Mr. Fico said.
"If a Banknorth bank client has an insurance issue, we are positioned and experienced in their mode of business. The business development position is sales-oriented, but it's really an ongoing educational position," he said.
Mr. Fico, who joined the company in July 2003, said he does not know how many agency deals the insurance group has done overall but that three have been completed since he was hired, including two in 2003, for Bogino & DeMaria Inc. in Avon, Conn., and Field & Quimby Inc. in Belfast, Maine.
"That pace will quicken," he said. Mr. Sparta's death and the pending TD Bank deal slowed agency purchases, he added.
