Going Against The Grain

Mutual of Omaha isn't the first or largest insurance company to venture into banking, but it could soon be the most visible.
- US Banker

That's because while other insurance companies rely heavily on the Internet and their own agents to generate deposits and loans, they are going with brick and mortar. Mostly through acquisitions Mutual of Omaha has grown to $4.1 billion in assets and nearly 40 branches (and 3 loan only offices) in nine (9) states.

Jeffrey Schmid, the bank's chief executive, says his goal is to create a brick-and-mortar franchise stretching from Washington State to the Carolinas, and with the backing of a deep-pocketed parent, he has the resources to do it.

"We're in a position now where we can look at every deal that becomes available," Schmid says.

Still, building a nationwide banking franchise one deal at a time is one thing, managing it profitably is another. Mutual of Omaha Bank's strategy is less about establishing critical mass in a handful of states than it is having small branch networks in multiple states. That's not always the most efficient way to run things, as several banking companies have painfully discovered.

And the bank's long-term plans to cross-sell banking products to insurance customers, and vice versa, is also easier said than done, observers say.

Yet perhaps more than most acquisition-minded companies, Mutual of Omaha can afford to be patient; as a mutual owned by its policy holders, it's under less pressure than publicly traded firms to generate profits quickly.
- US Banker

One of the states they are located in, is Texas, However, there won't be a location in the Austin area, where I am moving. Instead the closest branch, will be in Houston (Dallas being the city with their other two Texas branches). Sorry, I already have internet banking, when I move (as I will still have my credit union account, in Topeka). What I need, is a local brick and mortar, for my day to day needs. So while, I am intrigued by Mutual of Omaha having bank branches around the country, it just won't meet my needs.



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