Six months into its Florida comeback, F.N.B. Corp. of Hermitage, Pa., is enjoying such strong loan growth in the state that it is considering further expansion.
The $5.4 billion-asset F.N.B., which spun off its Florida franchise two years ago, reentered the state in October with loan production offices in Orlando and Sarasota, and last week it said it had opened two more loan offices in Fort Myers and Naples.
Gary Roberts, the president and chief executive of F.N.B's First National Bank of Pennsylvania, said in an interview this week that the company plans to add more loan production offices in the state and has not ruled out converting them into full-service branches.
Senior management has also discussed making an acquisition in Florida, Mr. Roberts said.
F.N.B.'s return to Florida was not part of a strategic plan, he said. Instead, it was initiated by one of the company's former Florida employees, who had expressed interest in spearheading a new lending operation there.
"We saw that as an opportunity to grow our earning assets in a market that we know and with the people we have formerly worked with and certainly trust," Mr. Roberts said.
F.N.B. is making the most of the opportunity.
Its Florida operation generated more than $80 million of loans in the first quarter, Mr. Roberts said, which put it on pace to exceed its goal of $200 million of loans by yearend.
After only six months of operation, loan production in Florida has become a primary driver of loan growth for the entire company. Its president and CEO, Stephen Gurgovits, said in a May 4 press release that First National's 14% growth in commercial loans in the first quarter was primarily "a result of the activities in our Orlando and Sarasota offices."
F.N.B. first entered Florida in 1997, and over the next seven years bought 10 banks there, eventually amassing nearly $4 billion of assets. In 2001 it moved its headquarters from Pennsylvania to Naples.
The company announced in mid-2003 that it was breaking the Florida and Pennsylvania operations into separate companies to "unlock shareholder value." The spinoff, completed in January 2004, created F.N.B. Corp., which had $4.4 billion of assets and about 130 branches in Pennsylvania and Ohio, and First National Bankshares of Florida Inc., which had $3.8 billion of assets and 59 branches in Florida.
In early 2005, Cincinnati's Fifth Third Bancorp bought First National of Florida for $1.6 billion. A number of the First National of Florida employees, including top executive Joseph Hudgins, joined the $107 billion-asset Fifth Third after the deal closed.
But that August, Mr. Hudgins left his new job, saying he had been pressured to accept a buyout of his contract because he "wasn't drinking the Fifth Third Kool-Aid."
A Fifth Third spokeswoman declined to comment for this article.
Shortly after his departure Mr. Hudgins contacted his former co-workers at F.N.B. Corp., and together they began planning a Florida strategy. He is now an executive vice president at First National Bank of Pennsylvania and heads a team of nine lenders, all of them former First National of Florida employees.
Analysts see F.N.B.'s return to Florida as a positive step.
Chris Marinac of FIG Partners LLC in Atlanta said F.N.B.'s previous experience in the Florida market should make it easier for it to generate business.
"I think it's simply a function of opening up the old Rolodex and rekindling some of their old relationships," Mr. Marinac said.
Andrew W. Stapp, a vice president of research at Cohen Brothers & Co. in Philadelphia, said that since F.N.B.'s Florida operation is being run by its former employees, the expansion "doesn't bear the risk of an acquisition where you really don't know the chemistry of the people and how you'll work with them."
Analysts said another reason this is a good move for F.N.B. is that Florida's economy is growing faster than the company's primary markets in western Pennsylvania.
But though moving into stronger markets is integral to F.N.B.'s strategy, Mr. Roberts said he did not expect to rebuild the Florida operation into anything near its former size.
"In today's day and age, with prices of Florida property being what they are, I'm not sure that we could go back and recreate the network of 70 branches and meet the market expectations of being what we once were," Mr. Roberts said.
Instead the company is focusing on bulking up in the southeastern Pennsylvania and northeastern Ohio, Mr. Roberts said.
In its latest deal, announced Dec. 21 and expected to close this quarter, F.N.B. is buying the $367 million-asset Legacy Bank in Harrisburg, Pa., for $75 million.
