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Bank buying insurance firm

January 12, 1998

Bank buying insurance firm

By LAURA ERNDE

Staff Writer

A Frederick, Md.-based bank is purchasing Keller-Stonebraker Insurance, the start of what could be a Tri-State-area trend toward merging the two industries.

F&M Bancorp has signed a letter of intent to buy the insurance agency, officials announced Monday.

The acquisition is believed to be the first of its kind in the area.

Banks all over the country have been trying to offer one-stop shopping for mutual funds, insurance, checking accounts and other financial services.

Insurance agencies benefit by the ability to market insurance to the bank's customer base, said John Schnebly, co-owner of Keller-Stonebraker.

The insurance industry has been in a "merger mode" for decades, Schnebly said.

When his father, Lewis A. Schnebly Jr., bought the business in the early 1950s, there were dozens of insurance agencies in Hagerstown.

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Today, there are fewer than 10.

Keller-Stonebraker customers won't notice any immediate changes due to the merger, John Schnebly said.

In the future, customers may notice improved service because of the added resources, he said.

"Things could only change for the better for our customers," he said.

The firm employs 31 people and has branches in Cumberland, Md., and Keyser, W.Va.

Keller-Stonebraker may have to move its headquarters to a smaller town in either Washington County or Frederick County to comply with federal regulations, he said.

The agency's main office on Eastern Boulevard is expected to remain open.

Schnebly and co-owner Jerry Spessard will continue to manage the office after the transaction.

Keller-Stonebraker, founded by C. Harry Keller in 1901, writes $10.5 million in property and casualty insurance premiums a year, Schnebly said.

Merger talks started because Keller-Stonebraker had a dormant arrangement to sell insurance with Home Federal of Hagerstown, which was bought by F&M Bancorp in 1996.

Details of the agreement must still be worked out and approved by the boards of directors of each company.

F&M Bancorp, with total assets of $1.045 billion, is the fourth largest independent bank holding company headquartered in Maryland.

Its lead bank subsidiary is Farmers & Mechanics National Bank, which operates 24 full-service branches and 32 ATMs in Frederick, Montgomery and Carroll counties.

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