A North Carolina community bank has bought a second insurance agency in an effort to make insurance services central to its consumer and commercial offerings.

Surrey Bank and Trust of Mount Airy bought Central Insurance Agency, a Mount Airy property and casualty firm, on Wednesday, from Farrie Harrell for an undisclosed price. In June the bank purchased Lowry Insurance Agency, another Mount Airy property and casualty company.

Surrey Bank said the two agencies will operate independently until Feb. 5, when they will be merged and begin operations as SB&T Insurance Inc.

Charles Lowry, the former head of Lowry, will be president of the new company. Mr. Harrell, who is to be named senior vice president, will be responsible for its day-to-day operations.

Edward Ashby, president of $70 million-asset Surrey Bank, said Mount Airy has about 8,500 residents and Surrey County about 65,000. "If we're going to grow within our area, we can't just confine ourselves to what traditional banking used to mean," he said.

The bank, which also owns a majority stake in Friendly Finance LLC, a company that provides financing for automobile dealers, said the purchase of Central Insurance provides an additional referral base for its insurance agents. However, "the challenge is to tie it all together," Mr. Ashby said.

Surrey Bank says it is putting licensed insurance agents in its three branches, as well as making efforts to cross-sell between the customers of the bank and the agencies.

Mr. Ashby predicted that the agencies will provide double-digit return on equity within the next two years.

Carmen Effron, president of C.R. Effron, a Westport, Conn., consulting firm, said buying insurance agencies can present a great opportunity to small community banks if they choose wisely.

In a small community, owning an agency allows a bank "to continue the tradition of personal service to their rural customers" while earning fees and commissions that can help the bottom line, she said.

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