Life insurer Ameritas getting out of banking business with Virginia sale

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Posted: Friday, March 29, 2013 12:00 am

Ameritas of Lincoln is selling its Falls Church, Va., savings bank because, under new federal banking regulations, it doesn't fit the company's life insurance-oriented model.

Acacia Savings Bank is to be purchased by Customers Bancorp Inc. of Wyomissing, Pa., a sale that is being reviewed by the Federal Reserve Bank.

The approval date for the sale is not certain, said JoAnn Martin, president and CEO of Ameritas Life Insurance Corp., and Bill Lester, executive vice president. They spoke to about 120 people at a meeting of the Association for Corporate Growth at Happy Hollow Country Club.

Ameritas acquired the savings bank as part of its 1999 purchase of Acacia Mutual Holding Co. of Bethesda, Md., along with other financial businesses.

Besides the bank, which had $25.6 million in net income on $3.2 billion in assets last year, Ameritas' businesses include the Calvert family of mutual funds, annuities and life, disability, vision, dental and other insurance.

In 2010, the federal government passed the Dodd-Frank Act in response to financial failures that led to the Great Recession. Among other rules, the law requires banks to have more capital to back up their loans and extends a series of new regulations to bank owners.

If Ameritas continued in the banking business, Lester said, meeting Dodd-Frank regulations could become a disadvantage in some of its other businesses. Since the bank is a small part of Ameritas' overall operation, he said, it makes more sense to sell the savings bank. Ameritas has total assets of $18.5 billion.

Not long ago, Lester said, 32 U.S. insurance companies owned banks as part of a popular strategy among financial companies to offer all types of services. Today, when pending sales are completed, there will be only five.

One of those, Mutual of Omaha, is continuing in the banking business because it's a significant part of its operation, contributing $45.5 million to last year's income.

Martin said Ameritas, which has 2,300 employees, continues to seek other acquisitions, including “bolt-on” purchases that add to its existing businesses and “transformational” purchases that add new lines of business within the financial sector.

Contact the writer: 402-444-1080, steve.jordon@owh.com, twitter.com/buffettOWH

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