The chief executive of Northeast Bank in Lewiston, Maine, says it plans to maintain an aggressive acquisition strategy as it seeks to expand its insurance business — as well as its overall banking operations — throughout Maine and into New Hampshire.
The bank's insurance unit, Northeast Bank Insurance Group, has bought seven small agencies in Maine in the past five years, including five in the last 12 months.
Jim Delamater, Northeast's president and chief executive officer, said the insurance group has accumulated $30 million in total premiums but expects to continue growing from there.
"We want to grow significantly, whether that be through acquisition or through organic growth," he said in an interview last week. "The insurance business is driven by volume, and we need to get the right volume so that we can serve our customers properly."
Northeast Bank Insurance completed its fifth acquisition of the past 12 months with the Sept. 1 purchase of the Hartford Insurance Agency, a family-owned business in Lewiston.
Mr. Delamater said the Hartford agency — which was not associated with the Connecticut insurance giant Hartford Financial Services Inc. but acquired the right to use the Hartford name when it was founded in 1935 — is the largest that Northeast Bank has bought thus far, with $8 million of premiums and 3,700 customers at Aug. 31.
The Hartford agency sells property and casualty insurance, as well as employee health insurance, in the Lewiston and Auburn markets.
He said the insurance group would expand by acquiring agencies "both beyond and within" its parent's footprint. "It is just more affordable to acquire an agency with a customer base than for us to go in and build a de novo branch," said Mr. Delamater, who has worked at the Maine bank for 27 years.
The insurance unit will expand by following the bank, which has $557 million of assets, and vice versa, he said.
"We are going to turn all of the insurance offices that we buy into complete-service branches," Mr. Delamater said. "This will take time, but we see the future of banking, and it is not just in your traditional branches. Northeast's branches will have fee-based services and other opportunities for us to develop noninterest income."
Northeast bought its first insurance agency three years ago with a deal for the Sargent Insurance Agency in Rangeley, Maine, and made its president, Craig Sargent, the president of Northeast Bank Insurance.
In the last 12 months, Northeast has bought Palmer Insurance in Turner, Sturtevant & Ham in Livermore Falls, Southern Maine Insurance Agency in Scarborough, and the Russell Agency in Madison. Northeast Bank has 24 retail sites in western, central, and mid-coastal Maine — 11 bank branches, 12 insurance agencies, and a financial center.
Mr. Delamater said Northeast will focus initially on expanding its insurance presence in Maine but then may look into New Hampshire.
"Customers don't mind buying insurance from us," he said, "but we need to build our scope of products and services in order to be competitive."
Northeast Bank Insurance offers annuities, health insurance, and property and casualty coverage. The unit wants to expand its health insurance products, Mr. Delamater said.
He said developing Northeast's insurance capabilities is only part of its strategy.
"We want to develop ourselves into a full-service institution," he said. "We want to offer one-stop shopping and relationship pricing. We know that we need to develop other profitable lines of business, including investments, wealth management, and insurance, in order to make that happen."
The insurance business will continue to play a crucial role in the bank's expansion strategy, Mr. Delamater said. "Each insurance acquisition gets us households, and that gets us in the door to sell more products and more services," he said. "It enables us to pick up revenue, increase profits, and gain access to more households to cross-sell to."
