Though some banking companies have soured on Florida because of its severe economic problems, BB&T Corp. is expanding its insurance operations in the Sunshine State.
The Winston-Salem, N.C., banking company closed its third Florida agency purchase of the past year this week when BB&T Insurance Services bought Oswald Trippe and Co. Inc. in Fort Myers. And the company does not plan to stop there.
Wade Reece, the president of the Raleigh, N.C., insurance unit, said the purchase of Oswald Trippe supplied "an important missing piece to our equation" in the state "because we didn't have anything in southwest Florida." The company is looking for more deals, he said.
In the past five years BB&T Insurance developed a network of agencies in both the Orlando and Tampa-St. Petersburg areas. All told, BB&T Insurance owns eight Florida agencies.
"We know we are more bullish on Florida than some of our competitors," Reece said in an interview Tuesday. "Florida has felt the effects of the recession more than most states, but we believe it is still a vibrant economy there and things will come back. We have done well in Florida in the past, and we think that there will be opportunities there in the future."
Carmen Effron, an analyst who heads C.F. Effron Co. LLC in Weston, Conn., credited BB&T for being opportunistic and buying "when much of the market is too scared to move."
"The market is soft, so it is a good time to buy if you have the cash to invest," she said. "Florida is feeling the pain of housing issues and the credit crunch, but at some point things will turn around, and BB&T will benefit because I have to imagine they are buying things at a fraction of what they paid for their first acquisitions in Florida."
Burton Greenwald of BJ Greenwald Associates in Philadelphia said the North Carolina company is in a "position to be aggressive."
"There may be a vacuum in Florida now that some of the other major banking players have stepped out of the state," he said. "BB&T has always been more aggressive on the retail side than some of the other banking companies."
Florida has become a much larger market for BB&T's overall operation in the last three months. It bought the failed Colonial Bank of Montgomery, Ala., which broadened the company's presence in southwest Florida. It got $23 billion of assets and assumed $19 billion in deposits through the Colonial deal.
In December, it bought two Florida insurance agencies — Tapco Underwriters Inc., a wholesaler based in Burlington, N.C., but with offices in Clearwater, Fla., and Manassas, Va., that serve small, hard-to-insure companies such as dry cleaners, and J. Rolfe Davis Insurance, a Maitland, Fla., property and casualty and employee benefits specialist.
The J. Rolfe Davis purchase expanded BB&T Insurance in Orlando, a market it entered in March 2008 when it bought Burkey Risk Services of Maitland and Boynton Beach. Tapco, which had 175 employees, had about $200 million of premium volume per year, doubling BB&T Insurance's size by premium volume in the managing general agent business.
BB&T Insurance also operates the Florida agencies BB&T-Iler Wall & Shonter in St. Petersburg, BB&T-Wyman, Green & Blalock in Bradenton and BB&T-Landrum Yaeger in Tallahassee.
"The Florida franchise has been good to us," Reece said. "It has been a really critical part of our growth. Five years ago, we had no presence in Florida, and today we are generating $70 million in revenue in Florida. The growth has come pretty quick."
Oswald Trippe, which will change its name to BB&T Oswald Trippe, has eight Florida offices, in Cape Coral, Miami, Naples, Sarasota, Holmes Beach, Weston and Ocala. It also has four offices in North Carolina that were not part of the deal.
The Trippe agency, founded in 1982, was "geographically critical" for BB&T Insurance to fill out its footprint in Florida, Reece said. "We think that there are tremendous cross-selling opportunities in the Florida area," he said. "Oswald Trippe does a lot of business insuring condominium associations in the region, and there are opportunities to cross-sell other products and services to those organizations."
Reece said that BB&T sees Florida as an opportune market to add scale.
"The insurance brokerage business is dependent on having and maintaining scale," he said. "BB&T has developed a strong book of business through a lot of key affiliates, but I don't know that we have achieved the ultimate scale that we want to have. … We have seen a lot of insurance divestitures as other banks are looking at the business that they are in and realizing that insurance is not making a significant impact. They are looking to sell and reinvest, and we are looking to acquire and add scale."
BB&T, which has offered insurance services since 1922, wants to add an agency in the Jacksonville area, Reece said, but the company is more interested in finding niche agencies to complement its current array of businesses.
"By and large, we are more interested in strategic fits than just geographic fits," he said. "Typically, there are a lot of opportunities within BB&T's footprint, and we are looking at all of them."
This story has been reprinted with permission from American Banker.
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