Magazine article American Banker

BancorpSouth's Agency Deal to Strengthen It in Key State

Magazine article American Banker

BancorpSouth's Agency Deal to Strengthen It in Key State

Article excerpt

BancorpSouth's second agency deal in three months was made in Arkansas, a big market for the banking company but a new one for its insurance operation.

"BancorpSouth has a strong banking presence in Arkansas," with about 20% of its business coming from its 47 branches in that state, said James Threadgill, an executive vice president at the Tupelo, Miss., banking company.

BancorpSouth's deal, an-nounced Monday, was an agreement to buy Ramsey, Krug, Farrell & Lensing Inc. in Little Rock.

The agency is on track to bring in about $13 million of revenue this year, Mr. Threadgill said.

When the deal closes, Ramsey Krug's contribution will bring BancorpSouth's annual property/casualty insurance revenue to between $45 million and $50 million. Including the platform annuities program, the bank expects more than $50 million of insurance revenue, Mr. Thread-gill said.

BancorpSouth chairman and chief executive officer Aubrey Patterson said in a statement that the agency's "reputation both inside and outside their industry positions them well to continue the strong business trend they have enjoyed and to generate noninterest income for our institution."

Mr. Patterson added, "This is our fourth major insurance agency acquisition in four years, and we will consider other similar acquisitions."

In 1999, BancorpSouth bought Stewart Sneed Hewes Inc. of Gulfport, Miss. In 2000, it acquired two smaller Jackson, Miss., agencies, Pittman Insurance and Kilgore, Seay and Turner in one deal.

Most recently, in May 2003, BancorpSouth bought Wright & Percy of Baton Rouge, La.

The company's Louisiana agency deal was unusual because it has no bank branches in Baton Rouge, though it does have several elsewhere in the state.

Though Mr. Threadgill declined to predict the company's expansion plans for Baton Rouge at the time of the Wright & Percy deal, he did say BancorpSouth had a "keen interest" in expanding its various businesses in Louisiana and was looking to Wright & Percy as a foundation for insurance growth in the state.

This week's deal, however, is right in the center of a key market for the bank, which has several branches in Little Rock and nearby communities.

Mr. Threadgill said the group of agencies fit together well both geographically and culturally. …

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