Magazine article American Banker

In GLB-Era Switch, Title Insurer Buying Bank

Magazine article American Banker

In GLB-Era Switch, Title Insurer Buying Bank

Article excerpt

In a first-of-its-kind deal, a Virginia title insurance company has agreed to buy a small commercial bank in Fountain Valley, Calif.

Though banking companies routinely buy title insurance firms, Land America Financial Group Inc. in Richmond is reversing the roles, shelling out $27.6 million in cash for Orange County Bancorp, the $240 million-asset parent of Centennial Bank.

Land America chief financial officer G. William Evans said owning a bank would improve his company's efficiency because it could concentrate its wire transfers, escrow transactions, and other business into a bank that it owns. It currently uses multiple banks throughout the country for these services.

Founded in 1979, Centennial operated as a thrift and loan until it converted to a state-chartered commercial bank in 1999. It has deposits of $194 million, and commercial real estate loans make up about 83% of its $203 million loan portfolio.

"It's got a very simple business model and we found that attractive," Mr. Evans said.

Ron Robertson, Orange County's president and chief executive officer, said it had been looking for a buyer that would give it plenty of autonomy and agree to retain its employees.

"If a bank had bought us, we would have been split up," Mr. Robertson said. "I wanted to avoid that. We've all worked very hard to make this bank what it is."

The deal was announced Friday and is expected to close in the fourth quarter.

Banks and title insurance firms were not allowed to own one another until the landmark Gramm-Leach-Bliley Act of 1999 removed that restriction. …

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