- Key insight: Banks' acquisitions of insurance agencies appear to be picking up after a two-year-plus period dominated by sales of insurance subsidiaries.
- Supporting data: More than a dozen prominent lenders sold bank-owned agencies between late 2022 through 2024.
- Expert quote: "On the commercial side, having property-and-casualty and life insurance are really great ties to a relationship." — Arrow Financial President and CEO David DeMarco.
Is the pendulum swinging back on banks' involvement in insurance?
After a slew of high-profile divestitures, a number of community banks have moved in the opposite direction in recent months, acquiring agencies to bolster their presence in the sector.
On Thursday, Arrow Financial Corp. in Glens Falls, New York, announced that it had paid an undisclosed sum for the Skene Valley Agency. Two days earlier, First Commonwealth Financial in Indiana, Pennsylvania, agreed to purchase Pennsylvania Insurance Specialists.
For the $4.5 billion-asset Arrow, merging the Skene Valley Agency into its Upstate Agency subsidiary creates additional insurance heft in New York's Washington County, where Arrow operates nine branches and holds a dominant 57% share of the $919 million deposit market, according to President and CEO David DeMarco.
"This particular agency is just a great fit in our footprint," DeMarco told American Banker on Thursday. "We have a very strong market share on the bank bank side. Now we're enhancing our insurance [capabilities]."
A spokesman for the $12.3 billion-asset First Commonwealth did not respond by deadline to a request for comment.
The two insurance deals announced this week follow on the heels of other recent agency purchases. In April 2025, Fitzgerald, Georgia-based Colony Bankcorp
The two-and-one-half years prior to 2025 were a very different story. Nonbank buyers, many flush with private-equity capital, acquired insurance agencies from more than a dozen institutions, including some that had been active in insurance for decades.
Buffalo-based M&T Bank sold its 67-year-old insurance agency in November 2022. Similarly, Boston-based Eastern Bankshares had operated Eastern Insurance Group for more than 20 years before agreeing to
The biggest bank agency sale during that period came in February 2024, when Truist Financial in Charlotte, North Carolina,
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At Arrow, management kept close tabs on the sizable premiums that sellers were receiving, but made the strategic decision to hold on to the Upstate Agency, DeMarco said. Indeed, Arrow actually expanded in the insurance business in 2024 with the purchase of an employee-benefits provider in Greenville, New York.
The move paid off. Arrow's insurance revenue, which totaled $6.5 million in 2023, jumped to $7.1 million in 2024 and $7.7 million in 2025. Through the first six months of 2026, Arrow's insurance revenue topped $4 million.
"On the commercial side, having property-and-casualty and life insurance are really great ties to a relationship," DeMarco said. "There's a lot of synergy there."
A mortgage lender, Arrow has also benefitted from selling homeowners insurance to new home buyers. "We hit about 50% referrals," DeMarco said. "That's another great connection."
First Commonwealth is also benefiting from higher insurance income. It reported revenue totaling $2.9 million through the first six months of 2026, compared with $2.6 million during the same period last year.
Arrow, which closed its acquisition of Utica, New York-based Adirondack Bank in July, may not be done expanding in the insurance sector and elsewhere. The company is open to acquiring additional insurance agencies, as well as wealth management firms and other banks, according to DeMarco.
"We're looking to grow and enhance our shareholder value," the CEO said. "We're in a growth mindset."
