Trustmark Corp. has announced that it plans to buy a Pensacola, Fla., insurance agency in a move to further diversify its revenues and to expand its presence in the Florida Panhandle.
Richard G. Hickson, the chairman and CEO of Trustmark, a Jackson, Miss., banking company, said in an interview Tuesday that the deal would almost double its insurance revenues, to roughly $35 million, excluding its annuity business. The target agency, Fisher-Brown Inc., has $16 million of annual revenues. It specializes in risk management coverage for businesses and individuals.
"Our goal is to bring insurance revenues up to a level of 10% of company revenues," said Mr. Hickson, noting that Trustmark typically has annual revenue of $400 million.
Trustmark was attracted to Fisher-Brown because the agency has "revenues of a fairly significant size, is well diversified in revenues, and has a dominant presence in the Florida Panhandle," said Mr. Hickson. "It was a perfect fit for us."
The Fisher-Brown deal would add experience and success in the life and health insurance business, said Mr. Hickson. This business is very attractive to Trustmark, he said, and the deal is a way to expand and diversify the company's insurance business. Trustmark now focuses on selling commercial and property/casualty insurance, he said.
"Fisher-Brown has a more diverse book of business because of its life and health segments," he said.
The agency is to operate as a subsidiary of Trustmark National Bank separate from the latter's existing agency operation in Mississippi. The deal is expected to close this quarter.
Mr. Hickson declined to disclose the deal's financial details but noted that it is subject to due diligence.
Trustmark's strategy is to expand its insurance business organically, and it expects the insurance arm to provide stand-alone growth for the company. "We expect our insurance revenues to range between an 8 to 12% growth rate based on the cycle of the insurance industry," he said.
Mr. Hickson said Fisher-Brown "may or may not make acquisitions over the next few years depending on the opportunities."
"Fisher-Brown grew its company based on one customer at a time. We want to continue that growth," he said.
Trustmark remains very interested in Florida and Texas as opportunities for further growth on the insurance side. "As a corporation - banking, investment, and insurance - we are very committed to Florida and Texas because we think those two states are in the top four or five [markets] in the country," he said.
"We put most of our growth assets in Florida and Texas," he said, and Trustmark "may consider other opportunities down the road" similar to this latest deal.
"We want to bring wealth management and insurance up to a more significant part of the overall business," said Mr. Hickson.
Gil Bennett, the president and chief executive of Fisher-Brown, said in a press release, "Trustmark shares our commitment to client satisfaction and is a strong financial partner that will enhance our ability to grow and serve the dynamic Florida Panhandle marketplace."
In addition to its headquarters in Pensacola, Fisher-Brown has offices in Milton, Destin, Mary Esther, and Panama City, Fla.
This is the third significant insurance deal for Trustmark in the last six years.
In December 1998, it was the first banking company in Mississippi to buy an agency, Bottrell Insurance Agency Inc., one of Mississippi's largest. Bottrell sells surety bonds, property/casualty coverage, and life and health insurance to businesses and individuals in Mississippi.
In April 2002, Trustmark bought Chandler-Sampson Insurance Inc., a Ridgeland, Miss., agency and merged it with Bottrell.
