Huntington Bancshares, bucking the trend of bank insurance agency purchases, said Tuesday that it has sold one as part of its continuing exit from Florida - but is maintaining its insurance business in the Midwest.
The $25 billion-asset Columbus, Ohio, bank holding company said it has sold J. Rolfe Davis Insurance back to the management team from which it bought the Orlando agency in August 2000.
But Jeri Grier, a Huntington spokeswoman, said the company has no plan to quit the insurance business in other states. "We are committed to growing our insurance business in our markets that are served by our retail and commercial banking operations," she said, naming Ohio, Michigan, Kentucky, Indiana, and West Virginia. Huntington owns two other insurance agencies, Tice in Columbus and Pollock & Pollock in Cleveland.
Huntington operated branches in Florida until February when SunTrust Banks Inc. of Atlanta closed a $705 million cash deal for the 141-branch network. The Ohio company had decided last year to sell the branches to better focus on its core midwestern operations.
The SunTrust deal did not include Huntington's trust and private banking offices in Naples, Fla., and Stuart, Fla.; its Florida mortgage origination business; the Florida indirect automobile financing business; and the J. Rolfe Davis agency. Ms. Grier said the company intends to keep its remaining Florida operations.
David McKinney, the president and chief operating officer of J. Rolfe, said that, though he "had calls from every player in the country over the last six or eight months" offering to help sell the agency to another bank, he and the top managers decided taking the business back to its pre-sale ownership structure would be best.
He joked that the agency has had "our feet firmly planted in the air for two years," first going through ownership by a publicly traded bank and then, after Huntington sold its Florida branches, deciding how to disentangle the relationship.
The agency retains the leadership it had before the sale. The buyers are a group of 20 employees with small stakes and the top managers - Mr. McKinney; John Watson, executive vice president-commercial lines; Donald Boone, executive vice president-employee benefits; and Bruce Arrow, an executive vice president and the agency's leading producer.
Mr. McKinney said the agency had only just begun to see results from its cross-selling efforts when Huntington sold its Florida branches. The bank ownership model can work, he said. "I think the key to it working is the relationships that form between the insurance agency and the bank." He added that the Huntington managers are "honorable people" and asserted that the partnership would have worked well had the company stayed in Florida.
John Wepler, a senior vice president at Marsh, Berry & Co. in Concord, Ohio, is the consultant who represented J. Rolfe in the original transaction. He said it comes as no surprise that the agency management decided to buy it back. "When Huntington bought J. Rolfe, that was an agenda that was spearheaded by the president of the Florida operation, Jim Dunlap. It was really his vision to do that transaction."
The agency had not intended to sell itself, Mr. Wepler said, but was won over in 2000 by the enthusiasm and plans of Huntington's Florida team. Unfortunately, when Huntington pulled out, J. Rolfe was caught in a situation feared by many agencies that are bought by banks.
"An independent agency that sells to a bank sells to a bank because it perceives its future with the leadership of the bank," Mr. Wepler said. "When the bank sells, it's very difficult."
