Less than a week after the Massachusetts legislature freed state- chartered banks to sell insurance, Hoosac Bank in North Adams announced that it was buying an agency.
The bank, a subsidiary of Hoosac Financial Services Inc., said late last week that it would buy Coakley, Pierpan, Dolan & Collins Insurance Agency Inc. for an undisclosed sum.
The North Adams-based property and casualty agency, which has three area offices, sold $17 million of policies last year, said Hoosac president Thomas W. Kelly. About 65% of the policies are commercial and 35% individual, he said.
The $135 million-asset mutual savings bank is also buying North Adams- based True North Financial Services Inc., a small financial planning firm that was broken out of Coakley in May 1997.
Both entities will operate as independent subsidiaries at the bank's new headquarters, which is under construction. Pointing to the experience Sears had with one-stop shopping, Mr. Kelly said he wants to keep the two entities separate from the bank.
"Until we're sure that's what customers want, we don't want to press the issue," he said.
The principals will stay with the insurance agency after the deal closes this summer, Mr. Kelly said. "We need their management-we are not insurance people," he said.
Mr. Kelly was unwilling to discuss the revenues the two companies would bring to the bank. He said that in structuring the deal the bank wasn't concerned about immediate revenues because it is looking at insurance as a long-term business.
The bank needed to get into these products to strengthen existing relationships and fend off competition from other insurance agencies in the future, he said. Though national banks already sell insurance in the state, they are not very active in Berkshire County, where Hoosac operates, he said.