H.F. Ahmanson & Co., the nation's second-largest thrift company, is pulling out of branch banking in Florida, citing intense competition in a rapidly consolidating market.
The California-based company, parent of Home Savings of America, has agreed to sell its 27 Florida branches, along with $3.4 billion of deposits, to SouthTrust Corp. for $300 million. The deal, announced Thursday, followed a similar transaction between the two companies earlier this year.
"Clearly the competitive landscape in Florida has changed over the last couple of years, and very dramatically over the last couple of months," said Adrian Rodriguez, a Home Savings spokesman. "It was increasingly difficult for us to compete."
Though out-of-state banks and thrifts once flocked to Florida to serve a booming population, mergers are now creating some daunting competitors.
Most notably, NationsBank Corp. struck a deal in August to acquire Barnett Banks Inc. And Wachovia Corp. has two deals pending in the state- one for the $820 million-asset 1st United Bancorp of Boca Raton, the other for Hollywood-based Ameribank Bancshares, with $280 million of assets.
SouthTrust, based in Birmingham, Ala., clearly plans to be one of the survivors in Florida.
The $29.8 billion-asset company has been building its franchise in Florida since it entered the state in 1987 with the acquisition of Central Bank of Volusia County, a small bank near Jacksonville. Since then, SouthTrust has boosted its Florida deposits to more than $5 billion. And that size should roughly double when all pending deals are completed.
Ahmanson, with $46 billion of assets, now plans to focus on California and Texas, but it will continue to offer residential mortgages in Florida.
Thursday's deal involved the company's branches on Florida's east coast. In June, SouthTrust bought 12 less profitable Ahmanson branches on the Gulf coast for $45 million.
The latest transaction is to pay a 9% premium on deposits, almost double the earlier premium.
Lori Appelbaum, an analyst at Goldman, Sachs & Co., said the transaction would give SouthTrust a broad presence in some very attractive markets.
SouthTrust, which has 174 Florida branches, would enter three new counties-Indian River, St. Lucie, and Dade-and pick up offices in affluent communities like Boca Raton, Boynton Beach, Coral Gables, and West Palm Beach.
In October, SouthTrust said it would pay $160 million in cash to buy $1.1 billion of assets from Barnett. That deal, expected to close in January, would give SouthTrust 60 offices and $931 million of deposits, mostly along Florida's west coast in the Tampa Bay region.
Home Savings has recently held about 1.91% of Florida deposits, ranking it No. 7, Mr. Rodriguez said. That, he noted, is far behind the 31% that the merged NationsBank and Barnett would control.
SouthTrust has 3.05% market share in the state, and was ranked No. 6 at June 30. After this and other deals SouthTrust has pending, it would rank No. 4.
Another likely competitor: Ahmanson's archrival, Washington Mutual of Seattle. Washington Mutual, the nation's largest thrift company, has made it clear that it would like to pick up more branches in Florida.
