After a brief lull from the serial insurance acquisitions of last year, Wells Fargo (WFC) is back at it.
Chicago, June 4, 2009 – Wells Fargo Insurance Services, Inc. – part of Wells Fargo & Company (NYSE: WFC) – announced today that they have signed a definitive agreement to acquire Grady & Associates, a single office, retail insurance broker in Las Vegas, Nevada. The acquisition closed June 1, 2009, and the terms of the transaction were not disclosed.
Grady & Associates has served customers across in Nevada since 1999. Founded by John Grady, the agency focuses exclusively on health and benefits insurance. The company serves a broad customer base, including customers in the hospitality, construction, hospitals, auto sales and home development industry.
“We’ll continue to service our customers in the same ways we have in the past,” said John Grady, Managing Director of Employee Benefits. “Joining Wells Fargo Insurance Services is a great benefit for our customers. We will expand our health and benefit capabilities to help customers protect their business and employees, and also be able to help them to grow their assets through our Wells Fargo connection.”
“Grady & Associates boasts a highly respected team of professionals,” said Nick Rossi, Regional Managing Director, Mountain West Region. “The team will strengthen and further support Wells Fargo Insurance Services’ existing health and benefits insurance professionals in serving our customers.”
“Grady & Associates is an outstanding retail brokerage firm and we’re excited to welcome the company to Wells Fargo,” said H. David Wood, Executive Vice President, insurance brokerage operations, West. “They will strengthen our growing presence in Nevada and further support Wells Fargo Insurance Services and the Wells Fargo commitment to help our customers succeed financially”.
About Wells Fargo Insurance Services
Wells Fargo & Company is a diversified financial services company with $1.3 trillion in assets, providing banking, insurance, investments, mortgage and consumer finance through more than 10,400 stores, over 12,000 ATMs and the internet (wellsfargo.com) across North America and internationally.Wells Fargo Insurance Services, Inc., along with Wachovia Insurance Services, is the fifth largest insurance brokerage in the world and the largest bank-owned insurance brokerage in the U. S.
Wells is quietly becoming not only one of the largest banks in the US but one of the largest insurance brokers. With Warren Buffett being the largest shareholder in Wells and his Berkshire Hathaway (BRK.A) essentially being an insurance company, this does fit.
I currently hold shares and while I do not trust the veracity of banks earnings currently, I do know this:
1- We need banks
2- Wells Fargo & JP Morgan (JPM) may just be the only two that continue from here on out as is. Citi (C) and Bank of America (BAC) are just very weak.
3- Warren Buffett is a backstop for Wells shareholders that no other bank shareholders have and that means something.
4- Insurance, when run right is VERY profitable and diversifies Wells away from pure banking in a very positive way. This focus by Wells is a very good idea.
What you essentially have is a shrinking base of banks that will handle what banking there is out there. That means a far greater piece of the pie for those left. With that greater piece of the pie will come the profits associated with it.
Yes, Congress has plans for increased regulation but one thing we know, Bankers are smarter that those who write the laws designed to thwart them. They will still find a way to make money after all is said and done.
Would I be running out and buying banks shares now? Personally I am not as I see far other more compelling opportunities elsewhere. That does not mean I am a seller though. I am going to hold and see how this plays out.
Disclosure (“none” means no position):Long WFC, none