UMB Financial Corp. is set to make its first—and promises not the last—acquisition as part of a strategy to "substantially" expand its insurance services unit.

The Kansas City, Mo., company said last week that UMB Scout Insurance Services Inc. signed a definitive agreement to buy the assets of Chapman-Sander, an independently owned insurance agency in St. Louis. The price of the deal was not disclosed.

Roger Forystek, the president of UMB Scout Insurance, said the acquisition would be the unit's first foray into offering property/casualty insurance. UMB Scout Insurance has offered annuities to retail customers and advanced insurance services to high-net-worth individuals for 20 years, but hired Forystek in the last year to expand the business.

Forystek, who worked for Hub International Ltd., before joining UMB, said he plans to acquire this year or next, but would not specify how many. "We don't have any set goals in terms of numbers," Forystek said in an interview. "We want to grow this business substantially. We want to make this a strategic part of UMB's overall business, but we have no specific goals in terms of revenue or clients."

Analysts said that there are opportunities for smaller banking companies to ramp up their revenue by buying small insurance agencies nationally. For example, Northeast Bancorp in Lewiston, Maine, has bought 10 insurance agencies since 2007, which have helped to vault it to 60th place among all bank holding companies that sell insurance, up from 156th place at the end of 2005, according to the Michael White-Prudential Bank Insurance Fee Income Report. The deals have given the $607 million-asset Northeast a broad market in Maine and New Hampshire.

UMB Scout Insurance remains relatively small. The acquisition of Chapman-Sander would double the size of its work force to 40 people. (Forystek would not disclose UMB Scout Insurance's revenue or assets under management.)

Chapman-Sander would operate as an office of UMB Scout Insurance Services and would retain the Chapman-Sander name. Ron Burlison is to remain president of Chapman-Sander. The deal is expected to close this quarter.

Forystek said he won't make any sweeping acquisitions, but wants to expand "steadily."

"Insurance is not a business that is a tenth of the revenue for UMB or anything right now," he said. "We understand that we are small and fledgling, but this is a strategic focus for the bank and we want to expand our insurance offerings."

UMB Scout Insurance wants to be selective about acquisitions, Forystek said. He said the unit wants to add insurance agencies in its three largest markets—Denver, St. Louis and Kansas City. "If we found opportunities for further expansion in St. Louis that made sense, we'd do that," he said. "We are not overly focused on saying which area must come next. We want to take advantage of the right opportunities when we find the right people to partner with."

Forystek said he also wants to continue to develop UMB Scout Insurance organically, particularly on the life insurance side, as he acquires to develop the property and casualty business. "We want to make this business substantial to our organization," he said. "We don't want to share too much on the timing of our expansion plans, but we know the executives at UMB want to make insurance a more substantial part of the organization."

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