Magazine article American Banker

Republic of Fla. CEO Says It's Not for Sale

Magazine article American Banker

Republic of Fla. CEO Says It's Not for Sale

Article excerpt

The chairman of St. Petersburg, Fla.-based Republic Bancshares, which is rumored to be an acquisition target of companies eager to enter the Florida market, insists it will remain independent.

In fact, after spending two years battling bad loans and refocusing the business, William Klich said $2.5 billion-asset Republic may even make a few acquisitions of its own, though not necessarily of banks.

"Obviously people have an interest in us and we have been getting calls quite frequently, but that's not what we intend to do," he said in an interview last week. "The bank is not for sale."

Several analysts have fingered regional banking companies, particularly BB&T Corp. of Winston-Salem, N.C., as suitors. Canadian banking companies also have been "canvassing the state" and shown interest in Republic, said Jeff Davis, an analyst with Midwest Research in Cleveland.

"Republic would provide them with a positive entry into the state," Mr. Davis said.

Mr. Klich, who is also Republic's chief executive officer, has heard the rumors and acknowledges that they have contributed to the 55% run-up in his company's stock price this year. But he said Republic's goal is to become "Florida's premier bank."

"We shrank the bank significantly in the last two years and now we are ready to go into growth mode," he said.

Republic ran into trouble in 1998, when defaults led to a $12.8 million loss at its now defunct Flagship Mortgage Services subsidiary. Mortgage lending problems continued to plague it, forcing a $5 million addition to loan-loss reserves in mid-2000. Securities and loan problems led to a $9.4 million loss late that year.

But in the past 18 months Republic has cleaned up much of its loan portfolio, sold seven branches, and eliminated several business lines. After three straight losing quarters, it posted a first-quarter profit and claimed to have its two largest nonperforming loans under control. …

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