After a prolonged period when many banks sold their insurance subsidiaries, some community banks are shifting back into acquisition mode. In recent months, a handful of lenders have purchased insurance agencies, signaling a possible reversal of the divestiture trend that dominated the sector from late 2022 through 2024.
Recent Insurance Agency Purchases by Banks
Two deals announced within days of each other illustrate the renewed interest. Arrow Financial Corp., based in Glens Falls, New York, acquired Skene Valley Agency for an undisclosed sum. Two days earlier, First Commonwealth Financial in Indiana, Pennsylvania, agreed to purchase Pennsylvania Insurance Specialists.
These transactions follow other agency purchases earlier in 2025. In April, Colony Bankcorp of Fitzgerald, Georgia, paid $3.5 million for the Ellerbee Agency. Four months later, Columbia Financial in Rahway, New Jersey, acquired the Jeanne S. Frey Insurance Agency.
Why Some Banks Are Buying Again
For Arrow Financial, the acquisition of Skene Valley Agency will be merged into its Upstate Agency subsidiary, strengthening its insurance presence in Washington County, New York. The bank operates nine branches there and holds a 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. “We have a very strong market share on the bank side. Now we’re enhancing our insurance capabilities.”
DeMarco also highlighted the commercial synergy between banking and insurance. “On the commercial side, having property-and-casualty and life insurance are really great ties to a relationship,” he said. “There’s a lot of synergy there.”
Arrow has also benefited from selling homeowners insurance to new home buyers through its mortgage lending operations. “We hit about 50% referrals,” DeMarco said. “That’s another great connection.”
The Divestiture Wave That Preceded the Shift
The current acquisitions contrast sharply with the prior two-and-a-half years. From late 2022 through 2024, more than a dozen prominent lenders sold their bank-owned insurance agencies, often to nonbank buyers backed by private-equity capital. Some of those institutions had been active in insurance for decades.
In November 2022, Buffalo-based M&T Bank sold its 67-year-old insurance agency. Similarly, Boston-based Eastern Bankshares had operated Eastern Insurance Group for more than 20 years before agreeing to sell the agency in September 2023 to help fund its acquisition of Cambridge Trust.
The largest bank agency sale during that period came in February 2024, when Truist Financial of Charlotte, North Carolina, announced the sale of its 80% ownership stake in Truist Insurance Holdings for about $10.5 billion to a group led by two private-equity investors. Truist had sold the other 20% to the same group a year earlier.
Insurance Revenue Growth at Arrow and First Commonwealth
Arrow’s decision to retain and expand its insurance operations has yielded measurable results. The company’s insurance revenue totaled $6.5 million in 2023, rose to $7.1 million in 2024, and reached $7.7 million in 2025. Through the first six months of 2026, insurance revenue topped $4 million.
First Commonwealth is also seeing higher insurance income. It reported revenue of $2.9 million through the first six months of 2026, compared with $2.6 million during the same period last year.
Future Expansion Plans
Arrow, which closed its acquisition of Utica, New York-based Adirondack Bank in July, may continue expanding in insurance and other areas. According to DeMarco, the company is open to acquiring additional insurance agencies, as well as wealth management firms and other banks.
“We’re looking to grow and enhance our shareholder value,” the CEO said. “We’re in a growth mindset.”