The North Carolina Bankers Association has launched a program designed to help its member banks set up insurance and investment divisions.

The group's Community Banking Services subsidiary is working with the program's three insurance providers and one investment firm to help banks establish their own point persons who would sell the providers' products in their branches. Representatives from the insurance and investment companies would also periodically provide back-room support and guidance.

Marc Mahoney, executive vice president at Community Banking Services, said the program is flexible. For instance, the banks can use the insurers' agents and refer customers to them, or they might arrange to have the insurers give bank employees sales training. Participating banks will receive a portion of any sale originated in their branches.

"Banks are looking at other opportunities for revenue and they are looking into insurance and investment," Mr. Mahoney said. "And now they have the opportunity to have their own financial service center with quality providers and a recognizable name."

The majority of members interested in the program are community banks with assets of less than $1 billion. Many of them want to get into the insurance or investment business to compete with larger institutions, but few have the means to buy or start an agency, Mr. Mahoney said.

"An agency acquisition is not a viable option for smaller banks, and from a market standpoint they get the same advantages from this joint venture," he said. "It makes all the sense in the world for smaller banks to get involved."

The insurance providers are Jefferson Pilot Financial in Greensboro and First Financial Resources in Gastonia for life, health, and long-term-care insurance; Independent Agency Services in Research Triangle Park for property and casualty insurance; and Capital Investment Companies in Raleigh for investment services.

Five banks have signed up for investment services and three for life insurance, and Mr. Mahoney said he is confident that 30 banks will be enrolled in the program by yearend.

A handful of states have such coalitions, but this one is different. For instance, the Pennsylvania Bankers Association's initiative only deals with insurance and works with only one provider. And unlike the programs in California and Virginia that are independent from the state trade group, the North Carolina bankers do not have to invest large sums of money to participate.

Banks will also have to invest to participate in a coalition the Michigan Bankers Association plans to kick off in January that the group says will combine aspects of all of these programs.


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