The Pennsylvania bank FNB Corp. has capped off a busy year of Florida commercial insurance acquisitions with an agreement to buy the Don Ostrowsky & Associates Inc. agency in Cape Coral.

Friday’s announcement of the deal came just a few weeks after $3.9 billion-asset FNB announced it would buy the James T. Blalock Agency of Venice, also a commercial-lines specialist. Both those deals are set to close next quarter and would give FNB five Florida agency acquisitions, two of which it completed this year.

It would not disclose the prices of the Ostrowsky and Blalock deals.

Without Ostrowsky and Blalock, FNB had the nation’s ninth-largest bank-owned insurance agency operation by 1999 revenues, according to Marsh, Berry & Co. Inc., an insurance-industry analyst in Concord, Ohio.

FNB, which has executive offices in Hermitage, Pa., and Naples, Fla., believes commercial insurance is the best way for it to expand its fee business and improve customer retention, said Gary L. Tice, president and chief operating officer.

“We need to find alternative sources for increasing our top-line revenues,” he said.

Also, Mr. Tice said, commercial lines are more profitable and require less staffing than personal lines of insurance, which entail putting agents in bank branches.

The bank will eventually sell personal lines such as auto, homeowners, and life/health, but not before it has established the commercial-lines business.

“We’re just building the base,” Mr. Tice said. Once FNB has built one, he said, “we will add additional agents, probably throughout our branch network.”

FNB has 151 branches in Florida, Pennsylvania, Ohio, Kentucky, and Tennessee. It would consider opportunities elsewhere but is focusing on agency acquisitions that would complement the branch network on the western coast of Florida stretching from Clearwater to Naples. It is in Naples that FNB expects to make its next insurance agency purchase, Mr. Tice said, though he would not elaborate.

Business clients “really want to have a touchy-feely relationship,” Mr. Tice said, so it is important for FNB to have local agents make sales calls with bankers.

Being able to sell insurance, he added, “will provide more profitability to the bank and enable us to have our customers really committed to FNB.”

The three agencies it has already acquired have “most certainly contributed to the bottom line, and to the earnings-per-share value of this company for the year 2000,” Mr. Tice said. He expects even more earnings value from its insurance agencies in 2001.

But Wayne R. Bopp, an analyst with Robert W. Baird in Milwaukee, said it is hard to tell whether the purchases are aiding FNB’s profitability. “In general, bank revenues have been flat or trending down,” he said.

However, FNB’s decision to try to get more fee income from its commercial customers should work out well for it over time, Mr. Bopp said.

“FNB is a little more of a business bank than a retail bank,” and offering insurance will help it solidify its relationships with business borrowers, he said.

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