Frost National Bank of San Antonio is expanding its insurance business into Fort Worth with its fourth agency acquisition in two years.

Frost Insurance Agency, which is owned by the $7.8 billion-asset bank, said Thursday that it had agreed to buy AIS Insurance and Risk Management, which sells property-casualty lines, employee benefits, business succession plans, and risk management services to small and midsize businesses.

The deal for AIS "rounds out our insurance operations in the state," said Dick Evans, chairman and chief executive officer of Cullen/Frost Bankers Inc., Frost National's parent company.

Frost National has 80 branches in Texas and an investment management operation in the Dallas-Fort Worth area called Frost Brokerage Services, which has $13 million of assets under management.

The product of three acquisitions, Frost Insurance Agency offers property-casualty and life insurance, employee benefits, and estate planning services to commercial and individual customers. It had revenues of $15 million in 2000, Mr. Evans said.

"Our marketing is more targeted toward commercial insurance right now - matching up with opportunities that come from the banking institution," Mr. Evans said.

But the bank cross-sells among all its businesses. "We believe a financial services organization needs to be sure it ties all its services together," he said.

AIS is a good fit for Frost Insurance, Mr. Evans said, not only because it is in one of the bank's strong markets but also because of its similar focus on selling a broad range of commercial insurance lines to small and midsize businesses.

AIS' chief executive officer, Mike Delabano, said the decision to sell was driven primarily by the need to be part of a more comprehensive financial services organization. "That is what we saw Frost building," said Mr. Delabano, who will continue to lead the agency after it becomes part of Frost. He said he expects to cross-sell insurance with banking products and to work with the Frost agencies in other Texas cities. Already, 52% of the bank's referrals to the agency result in insurance sales, Mr. Evans said.

AIS Insurance has a staff of 31, which would bring the number of Frost Insurance Agency employees to 180. Mr. Evans and Mr. Delabano would not give revenue figures for AIS.

John Brimberry, director of Frost Insurance Agency, said Frost continues to seek out agency acquisitions that fit its operations, though no other deal is pending.

John Wepler, the senior vice president of merger and acquisition services at the consulting firm Marsh Berry & Co. in Concord, Ohio, said AIS is a good match for Frost because of its strong relationships with small-business customers.

Frost Insurance is "very interesting because their post-deal retention of accounts is at an extremely high level," said Mr. Wepler, who helped put together the Frost-AIS deal. AIS also scored well on retention and productivity in Marsh's agency benchmarking studies, he said.

The price was not disclosed. The deal is expected to close Aug. 1.

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