S&T Insurance Group LLC has deepened its concentration in its western Pennsylvania market with the purchase this week of a two-agency company that can help it expand its property and casualty business and bolster fee income.
Thomas Kiral, the president of S&T Insurance, said in an interview, regarding the buildup in the property/casualty business, “We’ve been looking at ways to expand this initiative by hiring additional staff and looking at agencies.”
Growing organically is part of his business model, said Mr. Kiral, but agency deals allow for faster growth. He declined to discuss revenue expectations or long-term sales goals for the Bennett Group agencies whose purchase was announced Monday.
S&T Insurance, a subsidiary of S&T Bank in Indiana, Pa., said it bought Bennett Associates Inc. and Cowher-Nehrig & Co., multiline agencies in Ebensburg and Nanty Glo, Pa., respectively. Both are in Cambria County, one of the bank’s market areas.
Mr. Kiral said the agency approached S&T because “the principal of the Bennett Group is ending his career and wants to perpetuate the agency.” The deal gave S&T Insurance additional business in more markets, Mr. Kiral said, because it adds insurance carriers. He declined to say how many carriers it will add or how many he currently works with.
Though growing organically is important, acquisitions are a better way to cross-sell and increase revenue swiftly, he said.
Rick Weiss, an analyst at Janney Montgomery Scott LLC in Philadelphia, said in an interview that banks tend to favor agency deals because they are the easiest way to augment fee income.
S&T Bank’s biggest handicap, however, is precisely its location in slow-growth western Pennsylvania, Mr. Weiss said, so the Bennett Group deal made sense as a means to get the most out of the market by blanketing it.
“We are always in the search process” for deals, Mr. Kiral said, “but [the agency] has to be the right fit.” The timetable is dependent on agencies’ availability and their price structure, he said. “We are very careful [about] the types of agencies we want to talk with and consider merging with,” he said. Prospective deal partners must have competitive pricing and deliver excellent customer service.
A strong cultural fit is also very important, Mr. Kiral said. As Mr. Weiss commented, “With insurance agency deals you really are buying the people” because retaining the current employees makes integrating the agency much easier for customers.
“We are looking at other acquisition opportunities in [the] 10-county bank footprint,” said Mr. Kiral.
As for expanding outside Pennsylvania, Mr. Kiral said it is unlikely but that S&T Insurance may be open to it down the road.
The Bennett Group purchase was the second agency deal by S&T Insurance.
Evergreen Insurance Associates became a division of S&T Insurance in August 2002. It operates offices in Ebensburg, Greensburg, and Brookville, Pa. Evergreen sells employee benefits and life, health, and commercial policies, among other products.
S&T Bancorp Inc., the parent company, operates 49 offices in Allegheny, Armstrong, Blair, Butler, Cambria, Clarion, Clearfield, Indiana, Jefferson, and Westmoreland counties. It has assets of $3 billion.
