The Kentucky Bankers Association and its wholly owned subsidiary, KBA Services, Inc. (KBAS) are bringing Kentucky banks a great opportunity to participate in the sale of title insurance. In the next several years, the delivery channels for these products will be evolving quickly, and the KBA is here to facilitate our members' entry and participation in these markets. We want to help you take advantage of this exciting opportunity for increased profits without the hassles of the administrative management of the agency.
Title Insurance Overview
Title insurance represents a very profitable fee income opportunity when structured and organized properly. The Kentucky Bankers Association and KBA Services have chosen to work with Investors Title Insurance Company of Chapel Hill, North Carolina. Investors Title Insurance Company has more than 35 years of experience working with lender-owned title agencies. They currently work with 23 multiple bank-owned agencies in Alabama, Illinois, Indiana, Kentucky, Maryland, Michigan, Nebraska, New York, North Carolina, Pennsylvania, Tennessee, Virgina and West Virginia.
Multiple bank-owned agencies are generally owned by 10 to 25 banks. The agencies are structured as limited liability companies. Banks are offered ownership based on their asset size and loan volume relative to their peers that invest in that agency. Typically, the ownership that a bank has in an agency ranges from 2 to 18 percent. Total start up capital required has ranged from $150,000 to $400,000. Consequently, at 15 percent ownership the initial capital investment for each participant would range from $22,500 to $60,000. New agencies historically have reached profitability on a cash basis by the fourth or fifth month of operations, initial capital has been completely returned to owners within the first eighteen months and dividends in the next year of operations have doubled the original investment.