RISMEDIA, March 6, 2007-(MCT)- The "one-stop financial shop" trend in the banking has been impossible to ignore in recent years. Through its LSB Financial subsidiary, the Lincoln Savings Bank expanded its real estate business in July by acquiring Century 21 Golden Cities in Waterloo. The deal was formally announced in February, the second such acquisition LSB Financial has made in the Cedar Valley. LSB acquired Mike Sheehan & Associates Realtors of Waverly last year. Both of the acquired agencies now share the moniker Century 21 LSB Real Estate.
The deal for Century 21 Golden Cities was 2.5 years in the making, according to Century 21 LSB broker Cliff Rudolph. Both sides had discussed merging long ago, but it wasn't until last summer that they finally pulled the trigger.
"It is the perfect combination," said Rudolph. "It is very good for agents, very good for brokers and excellent for the customers."
According to Tom Gronstal, superintendent of the Iowa Division of Banking, financial institutions adding real estate agencies is not common. "There are just a handful of financial institutions around the state that offer realty," said Gronstal.
Erik Skovgard, president of LSB Financial, said the acquisitions fit LSB's core strategy of providing customers with a single, broad financial plan. The Reinbeck-based commercial bank said adding a well-known brand like Century 21 allows customers to search for, purchase and finance a home through their company.
"We now have the Century 21 brand and the LSB brand behind us," said Rudolph. "We can offer customers financing, insurance and mortgages. We are reaching out to a much larger area than the local Realtors are."
According to Gronstal, LSB's expansion into realty was likely a move to increase business with current customers. Gronstal said one of the primary ways that financial institutions increase their business is "to have additional products to sell to existing customers." He added that LSB will try to add new customers with its realty service as well.
The recently acquired real estate agencies should also benefit from the deal. Skovgard vowed not to make any personnel changes at Century 21 LSB in Waterloo, and said the local agents have the full support of LSB's 165 employees at 14 locations. Rudolph said having the bank's marketing department will free up time brokers previously committed to advertising. Skovgard also explained that financial institutions like LSB are better equipped to handle the ups and downs of the real estate market than independent agencies.
In its 105-year history, LSB has learned a thing or two. "We've done six or seven different acquisitions, and we've learned a lot from those," said Skovgard. "It use to be that we would go in and try to apply the LSB culture to whatever we acquired. Now, we try to take the best out of both LSB and whatever culture is being added."
Integrating the culture of Century 21 Golden Cities was especially important with an experienced broker like Rudolph at the helm.
"We knew we wanted to get into real estate, and we were looking for someone with expertise and people of high character," said Skovgard. "We've known Cliff for a long time, and we knew he had 30-something years of expertise, and you can't train that."
Copyright © 2007, Waterloo-Cedar Falls Courier, Iowa
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