BancorpSouth Insurance Services Inc. says its purchase of its sixth agency was a step in its plan to further expand into its bank parent's footprint.
The subsidiary of BancorpSouth Inc. in Tupelo, Miss., announced Friday that it had bought the employee benefits firm Kyzar & Co. in Hattiesburg, Miss. The bank said it plans to incorporate Kyzar into the Stewart Sneed Hewes division of BancorpSouth Insurance. The deal's terms were not disclosed.
"There is a strategy in place to make intelligent acquisitions where there is synergy, a similar culture, and similar goals," said Scott Naugle, an executive vice president at BancorpSouth.
An agency's management, product lineup, culture, and location are key considerations when shopping for deals, he said. "We would prefer that the agency is in the bank's footprint, or if it's a smaller acquisition, we want it to be close to one of our existing agencies," he said.
BancorpSouth chairman and chief executive officer Aubrey Patterson, said in a press release, "We have actively expanded our insurance services through the company's six-state market area and will consider other similar acquisitions of market-leading agencies." The $10.8 billion-asset banking company operates 247 sites in Alabama, Arkansas, Louisiana, Mississippi, Tennessee, and Texas.
Insurance is very attractive to BancorpSouth because of the fee income it generates and the potential for cross-selling, Mr. Naugle said. The company expects Kyzar to generate $1 million of commission revenues and growth of 10% to 15% per year. BancorpSouth Insurance reported $55 million of revenue last year, he said.
The agency subsidiary's last purchase was in July, he said. "We are very careful" when considering agency deals, he said. "It's very important that everybody fits and works well together and the businesses integrate."
"We will look at another deal when the right opportunity presents itself," he said.
The Kyzar deal made sense because the agency's culture is a perfect match for BancorpSouth's insurance practice. "The agency brings to our office a desirable set of skills and expertise," Mr. Naugle said. "They do a lot of [property and casualty] business and specialize in larger businesses, much like our business model."
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. It then bought Wright and Percy Insurance Agency in Baton Rouge, La., and Ramsey, Krug, Farrell in Little Rock, Ark. - both in 2003.
Ramsey Krug is a full-service agency specializing in construction and surety, professional liability, and self-insured risk management services.
Kyzar & Co. was founded in 1974 and has specialized in employee benefits, including group medical and life insurance; short- and long-term disability; and retirement products, including 401(k), profit-sharing, and pension plans.
BancorpSouth and its subsidiaries sell, in addition to traditional banking services, mortgage origination and servicing, leasing, credit card, trust and fiduciary, brokerage and investment, and insurance services.
