National Penn Bancshares Inc.'s most recent agency purchase - of Krombolz Agency Inc. in West Chester, Pa. - was just the latest in a campaign to expand fee income and exploit cross-selling opportunities, the leader of its insurance subsidiary says.
Mark S. Swartley, the president of National Penn Insurance Agency Inc. in Boyertown, Pa., said in an interview Monday that National Penn is always looking at opportunities and will not rule out additional agency deals this year.
Insurance is an attractive business line for the parent's National Penn Bank because it brings in "fee income for the bank and rounds out interest rate fluctuations," he said. The bank's customers frequently request insurance products, he added. "It's a strategic idea as well as financial. They want to do business with organizations that they know and trust. And it's an excellent cross-selling opportunity," Mr. Swartley said.
The Krombolz deal was National Penn's third agency purchase in about six months. It added Pennsurance, a Berks County agency, in July and D.E. Love Associates of Yardley in Bucks County on Nov. 30. Pennsurance is a property and casualty insurance broker that sells workers' compensation, business, farm, personal auto, and homeowners coverage.
D.E. Love operates as a division of National Penn Insurance, and Duane E. Love, who established the agency in 1980, is president of the unit. It offers personal and commercial property and casualty insurance, as well as employee benefits programs through relationships with regional and national insurance carriers.
National Penn decided to buy the Krombolz agency because of its strong reputation and location within the parent company's footprint, Mr. Swartley said.
That market footprint in southeastern Pennsylvania defines his subsidiary's geographic ambitions, Mr. Swartley said, so he does not see dealmaking across state lines as a goal.
Krombolz Agency is to operate as a division of National Penn Insurance. Ernest H. Krombolz Jr. is to remain with the company as president of the division. His agency sells property, liability, workers' compensation, auto, and bonding services, as well as individual life and health products, but its business is focused on the commercial side. When considering agency deals, Mr. Swartley said, National Penn "looks at the agency's growth trend, reputation, and if they have a good mix of business, favoring commercial business."
On the bank side, National Penn's recent acquisitions include People's First Inc. in June 2004 and HomeTowne Heritage Bank in December 2003.
Mr. Swartley declined to discuss sales goals for the new agency but said National Penn Insurance brought in revenue of $6 million last year. National Penn Bancshares is a $4.3 billion-asset financial services company operating 73 offices in southeastern Pennsylvania through National Penn Bank and its FirstService Bank, HomeTowne Heritage Bank, and Peoples Bank of Oxford subsidiaries.
