Beneficial Savings Bank has entered the insurance business through an agency purchase, and the Philadelphia bank says it has aggressive expansion plans in banking and wealth management that could include further deals.
George Nise, the president and chief executive officer of Beneficial Savings, said in an interview Monday that he decided to diversify the bank’s sources of fee income by entering the insurance business through the purchase last week of the Philadelphia brokerage firm Paul Hertel & Co.
The subsidiary created to absorb the Hertel purchase, Beneficial Insurance Services, will use the agency to give individual and business customers access to property, casualty, life, health, and benefits insurance. Robert J. Bush is to remain president of the agency.
“We were approached by one of their board members in December 2003 to have a brief discussion,” Mr. Bush said in an interview. “The more we spoke with them, the more we found we had in common. Once we talked about customers, we found that we had a lot of opportunities for cross-selling.”
This is the bank’s first insurance acquisition, said Mr. Nise, and Beneficial Savings will keep looking for appropriate deals. “We will look for some skill sets that this agency doesn’t have,” such as a focus on employee benefits, he said.
Mr. Nise declined to discuss revenue expectations or long-term sales goals for the agency.
Beneficial plans to open six bank branches this year, a more aggressive growth strategy for the bank, Mr. Nise said. “We opened two this past year,” he said. “We made a concerted effort to expand our branch network.”
Doing acquisitions is a new strategy for Beneficial, a bank that has grown organically in the past. Both paths to growth have their benefits, said Mr. Nise, but acquisitions could achieve growth faster.
“We would certainly like to increase market share of the institution,” he said. “Before the end of the year, we’ll have 40 offices, and we will look at banks and wealth management opportunities.” Wealth management services are a natural fit for the bank, he said, because affluent customers, and those that come into wealth, trust their bank to supply a full array of services, including asset management.
The bank has 36 branches in the Philadelphia area and $2.3 billion of assets.
Beneficial is considering other acquisition opportunities among candidates on a target list. Mr. Nise declined to say how many deals are under consideration or to give a timetable, but “there are several companies in the banking and wealth management area” that are very attractive, he said.
Insurance is an added service for commercial customers and a good cross-selling opportunity for the bank, Mr. Nise said. “We do see insurance as a very attractive product. When you establish banking relationships, customers have the confidence in you to provide added quality products and services,” he said.
Mr. Nise said the bank is not actively looking to expand outside Philadelphia and its surrounding counties but continues to keep an eye on the New Jersey market. “We have one office in New Jersey, and we would like to spend efforts in the state,” he said. The bank has no New Jersey expansion plan in place but is open to opportunities throughout the state.
