The Virginia Bankers Insurance Center, a 67-member consortium of community banks, has announced its second deal to buy an insurance agency - less than a month after announcing the first.
The consortium said Thursday that it will buy Insurance Partners of Virginia, a full-service agency based in Staunton with offices in Front Royal, Harrisonburg, Stuarts Draft, Waynesboro, and Charlottesville. The sale is expected to close in November.
Last month the consortium announced that it was buying Blue Ridge Insurance Group and its Ewald-Lester Life Agency of Wytheville. That deal is expected to close at the end of this month.
In neither case was the price disclosed.
The consortium was established in July 1999 to help community banks become insurance marketers, by acquiring insurance agencies whose products the banks could sell.
Insurance Partners has 40 employees, about 10 of whom are agents. Blue Ridge has about 20 employees, 10 of whom are agents.
The deal for Insurance Partners of Virginia "is a nice complement to the first one, because it gives us a reach up the I-81 corridor, from Bristol to Winchester," said Bruce Whitehurst, chief administrative officer of VBA Management Services, a for-profit subsidiary of the Virginia Bankers Association. The consortium hired VBA Management as a consultant in agency purchases.
Now the consortium is scouting for agencies in the Richmond, Hampton Roads-Tidewater, and Northern Virginia regions, Mr. Whitehurst said. It wants more agencies so it can offer face-to-face assistance to banks across the state, he said.
Carmen F. Effron, president of the consulting firm C.F. Effron Co. in Westport, Conn., said the consortium is leveling the playing field for community banks that want to participate in insurance. "What you have here is a bunch of small banks that could never buy an agency on their own finding a way to compete by forming alliances."
Mr. Whitehurst said the consortium's members, whose assets average $250 million, will probably begin offering insurance products through the two agencies as soon as the deals are closed.
Some members, including $330 million-asset First Bank and Trust Co. in Abingdon, already offer insurance lines. Leton Harding, executive vice president of First Bank and Trust, said the agency deals present "an opportunity to offer a broader array and products and to have access to greater expertise."
Other members, such as $235 million-asset Bank of Tidewater in Virginia Beach, have not yet offered any insurance products.
Bank of Tidewater president Betsy Duke said that in order for the bank to offer insurance on its own, "we would either have to buy an agency, which we can't afford to do, or get involved in a joint venture, which either goes so well that you want to buy them or so poorly you want them to go away."