NATIONAL BROKERS AND BANKS FORGE AHEAD WITH DEALS

Rough Notes, Mar 2005

Acquisitions and mergers continue to change the landscape of property/casualty agency ownership. Toward the end of 2004 and the beginning of this year, banks and national insurance brokers acquired a number of retail P-C agencies, wholesalers and benefits brokers. Those transactions shown below involve retail P-C agencies in 10 states.

Arthur J. Gallagher & Co. (www.ajg.com) acquires Horton Insurance Agency, Inc., of Oklahoma City, Oklahoma.

Horton Insurance Agency, Inc., formed originally in 1983, specializes in the construction, property management, public entity, real estate and hospitality industries. The agency focuses on large, complex accounts and has clients throughout the United States. Dick Horton and his staff will continue to operate from their Oklahoma City office under the direction of James J. Braniff III, south central regional manager of Gallagher's Brokerage Services Division - Retail.

Brown & Brown, Inc., acquires assets of C.F. Lake & Company of Minneapolis, Minnesota.

C.F. Lake & Company has annual revenues of approximately $2.6 million. The agency serves the insurance needs of a wide variety of individual and commercial clients. Clifford P. Lake, agency president, and the rest of the agency's staff, are continuing in their responsibilities from their present location. C.F. Lake represents Brown & Brown's first Twin Cities operation.

Brown & Brown also acquired the Ocala, Florida, branch office of a Florida subsidiary of USI Holdings Corporation.

The Ocala office has annual revenues of approximately $1.5 million. Michael Powell and the Ocala USI office staff will be combining with Brown & Brown's existing Ocala operation, under the direction of Brown & Brown's profit center manager, D. Craig Curry. Powell will become the sales manager for the combined operation.

Cabell Insurance Associates (www.cabellinsurance.com) of Charlottesville, Virginia, merges with Bankers Insurance, LLC.

Cabell Insurance Associates maintains offices in Charlottesville and Culpepper, Virginia. All of Cabell's current principals will remain with the agency.

Bankers Insurance is owned by 60 community banks, which created the agency in conjunction with the Virginia Bankers Association's Management Services division. Bankers Insurance has made eight insurance agency acquisitions since 2000 and now operates from 12 offices located throughout Virginia.

First Charter Bank (www.firstcharter.com) of Charlotte, North Carolina, acquires Smith & Associates Insurance Services, Inc., of Charlotte.

Smith & Associates is a property/casualty agency employing 12 people. Its principal owners, John Smith and John Land, will join First Charter Insurance Services (FCIS), the bank-owned agency. FCIS employs 115 people in seven locations and produces more than $100 million in annual premiums. FCIS has made 10 acquisitions since 1998.

Hancock Bank (www.hancockbank.com) of Gulfport, Mississippi, acquires Ross-KingWalker, Inc., of Hattiesburg, Mississippi.

Ross-King-Walker (RKW) is a 104-year-old agency producing approximately $1.75 million in annual revenues. It has 23 employees at its Mississippi offices in Hattiesburg, Pascagoula, Meridian, and Columbia. The agency will continue to operate under the name of Ross-King-Walker, maintaining its staff and offices. It will be an affiliate of the bank's affiliated agency, Hancock Insurance Agency.

Hancock acquired RKW in an all-cash transaction.

Hancock Bank operates 103 full-service offices throughout south Mississippi, Louisiana, and the Florida Panhandle.

Hilb Rogal & Hobbs acquires substantially all the assets of Ed Murray & Sons, Inc., (EMS) of Cheyenne, Wyoming.

Ed Murray & Sons is Wyoming's oldest agency, with roots tracing back to 1877. It also maintains a branch office in Pt. Collins, Colorado. In 2004, EMS produced more than $3 million in revenues. Its areas of expertise include construction-including surety, medical malpractice, moving and storage, condominium, and retail and distribution business.

EMS principals William M. Murray and Garth M. Boreczky acquired ownership of the agency in 1996 and since then have increased revenues three-fold. They will continue to operate the agency's offices as part of HRH's Colorado profit center.

National Penn Bancshares (www.nationalpennbancshares.com) acquires two Pennsylvania agencies: Krombolz Agency, Inc., of West Chester and D.E. Love Associates, Inc., of Yardley.

Krombolz Agency, Inc., (KAI) is a 70-year-old, family-owned firm with seven employees. It writes mostly commercial business. Ernest H. (Skip) Krombolz, Jr., president of KAI, will remain as president of the Krombolz Agency division of National Penn Insurance Agency, the bank's affiliate agency.

D.E. Love Associates, Inc,. has 21 employees. Duane E. Love, who established D.E. Love in 1980, will be president of the new division of National Penn Insurance Agency. The price reported as paid for the agency was $3.1 million.

These acquisitions by National Penn Bancshares were preceded in mid-2004 by its acquisition of Pennsurance, a Berks County agency. "We are responding to customers' requests for services that complement and enhance our traditional banking relationships," said Glenn E. Moyer, National Penn's president.