A shift is underway in how community banks approach insurance. Between late 2022 and 2024, most bank activity ran one way: institutions sold agencies to nonbank buyers as private equity capital drove multiples higher. A small but distinct counter-movement has since emerged, with several community banks moving back into agency ownership through 2025 and into 2026.
Arrow Financial Corporation's agreement to acquire Skene Valley Agency, Inc., a Washington County, New York, independent agency, is the latest example. Arrow announced the deal on September 10, with no financial terms disclosed. The acquisition is expected to close by Q3 2026, after which Skene Valley will merge into Upstate Agency, LLC, Arrow's insurance subsidiary.
Arrow Financial's insurance revenue grew from $6.5 million in 2023 to $7.7 million in 2025, according to the company's annual filings. Through H1 2026, insurance revenue topped $4 million.
"On the commercial side, property-and-casualty and life insurance are really great ties to a relationship," said David DeMarco, president and CEO of Arrow Financial Corporation in Glens Falls, New York.
Upstate Agency has operated for more than 50 years. Skene Valley was founded in 2002 by John Hoagland, who remains its president.
Between late 2022 and 2024, several banks sold insurance agencies to nonbank buyers as premium multiples climbed. M&T Bank sold its 67-year-old insurance subsidiary in November 2022. Truist Financial sold its majority stake in Truist Insurance Holdings for $10.5 billion in 2024. Colony Bankcorp paid $3.5 million for Georgia's Ellerbee Agency in April 2025. Columbia Bank of Fair Lawn, New Jersey, followed in September 2025 with the purchase of the Jeanne S. Frey Insurance Agency.
Arrow's deal, announced the same week as a separate agency acquisition by Pennsylvania's First Commonwealth Financial, extends that run.
Those buyers on the other side of the bank divestitures are now pulling back. OPTIS Partners recorded 292 agency acquisitions in H1 2026, down 15% from a year earlier, a seven-year first-half low. The largest PE-backed consolidators cut their pace sharply.
Banks re-entering agency ownership now face a less crowded acquisition market. Arrow's deal for Skene Valley, a 24-year-old agency whose footprint overlaps Arrow's nine Washington County branches, reflects that opening. The acquisition deepens insurance distribution in a market where Arrow already holds a 57% deposit share, according to DeMarco.
Banks approach agency acquisitions differently than PE-backed aggregators. The synergy case is cross-sell and retention, rather than consolidation and cost-cutting. A community bank with a dominant local deposit share acquires an agency to reach the same client base across a broader product set.
That logic works when sellers are willing to choose a community bank over a platform buyer, and some are. The relationship Arrow and Upstate Agency have with Washington County is the value proposition, not scale for its own sake.
