Thrivent's Fraternal Clientele Adds Heft to Its Small Thrift

By Reich-Hale, David | American Banker, January 15, 2003 | Go to article overview

Thrivent's Fraternal Clientele Adds Heft to Its Small Thrift


Reich-Hale, David, American Banker


It's part of a $56 billion-asset company in Minneapolis, and that is not unusual.

It's also a savings bank started by an insurance company after it got a thrift charter -- and this has been done before.

Thrivent Financial Bank, however, has a special story to tell. Its parent, Thrivent Financial for Lutherans, is the year-old product of a merger between Lutheran lay groups that, shortly after the turn of the 20th century, started insurance companies -- in Minneapolis and Appleton, Wis., respectively -- to sell life insurance to their fellow Lutherans.

Now it is a Lutheran financial services company, and the thrift is a subsidiary offering all the usual banking products, from savings and checking accounts to credit cards, money market accounts, and real estate loans.

The year-old, $331 million-asset thrift is community bank size but sells its products primarily to the two million policyholders of its parent. Thrivent has 2.9 million members, and there are 9.5 million Lutherans 18 and older in the United States.

The thrift wants to add products from third-party providers, and its size would pose a stumbling block for most providers because the sales potential would seem to be small. But an analyst says Thrivent should have no problem signing up marketing partners because of the "incredible" loyalty of the parent company's policyholders.

Thrivent Financial Bank has five branches, three in Minneapolis and two in Appleton, where it is based. And it says it expects to add mutual funds, life insurance, and fixed and variable annuities by the end of this year. These three products are already available through the parent's 2,915 financial associates, or captive agents, nationwide. All the products are Thrivent-designed and -underwritten.

"We're dealing with a couple legal challenges in that, because the parent company is a fraternal organization, they're limited (in) the way they can sell some of their products," said Richard Jodarski, the thrift's president and CEO. "So we have to clone the products and create a separate subsidiary. We plan on having all this done by the end of 2003. The financial associates are already offering our banking products, so we're halfway there on the cross-sell."

The thrift is also looking to add investment and insurance products from outside providers but has not yet talked with any.

"If a customer's needs are such that our product isn't the best fit, we want them to have options," Mr. Jodarski said, adding that it is unclear whether the thrift would negotiate a distribution agreement with one provider offering multiple products or add multiple providers to the menu.

"It's easier to manage one relationship, but would that one provider have the best products for each line?" Mr. Jodarski asked. …

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