John W. Sapanski always dreamed of building an empire.

It was that desire that led him to resign as president and chief operating officer of Dime Savings Bank of New York after 38 years there, and take a job at a struggling Florida thrift.

And it was that desire that led him back into banking four years after the thrift failed.

Now, as chairman and chief executive officer of Republic Bancshares, the 67-year-old is finally in a position to make his dream come true.

On Dec. 15, Republic became the only Florida bank to win branches NationsBank Corp. of Charlotte, N.C., was divesting so it could buy Barnett Banks Inc. NationsBank was required to shed $4.1 billion of deposits. Republic will pay $37.8 million for eight branches, including the real estate, $255 million of deposits, and $184 million of loans.

But even before securing those branches, Republic was growing at a steady pace. Since Mr. Sapanski's arrival in 1993 it has grown from $160 million of assets to $1.8 billion.

In fact, with the takeover of Barnett, Republic is now the second- largest commercial bank based in Florida, behind Ocean Bankshares of Miami, and is poised to become No. 1 once the NationsBank deal and another close.

It has taken almost a decade in Florida for Mr. Sapanski to start creating the empire he envisioned when he left Dime.

He came to Florida in 1988 to take over Florida Federal Savings Bank, a St. Petersburg thrift troubled by a student loan scam and bad real estate partnerships. Mr. Sapanski said the management team was making "significant progress" toward reducing operating expenses when the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 took effect. The act, which mandated that the thrift have 2% capital, drove Florida Federal out of business in 1989, he said.

"I think that we were on our way to turning it around," Mr. Sapanski said. "It would have been nice to save the jobs of 1,000 people, but a rule is a rule, and that was not to be the case."

After Florida Federal, he started his own commercial loan servicing company. Eventually he went to work for William R. Hough, president of a Florida municipal bond firm.

In 1993, Mr. Sapanski and Mr. Hough bought the stock of Republic for $4.45 million from First Union Corp. First Union had gained control of the stock from Republic's former owner, Charles Ruttenberg, who had defaulted on a loan. Mr. Hough still owns 56.8% of Republic's stock; Mr. Sapanski owns 6%.

To expand Republic, Mr. Sapanski turned to his thrift past and introduced the bank to mortgage lending.

"When we got there, Republic Bank had never made a residential loan," he said. The bank bought loan packages that were seized from other troubled thrifts from the Resolution Trust Corp., and began marketing itself as a real estate lender.

Republic's real estate mortgage portfolio grew to $1 billion at yearend 1997 from $286 million at the end of 1993. The current figure represents 89% of Republic's total loan portfolio.

The bank is marketing its mortgage services nationwide. Mr. Sapanski said Republic sends out 150,000 loan solicitation mailings per day. It also has loan origination offices in Boston and Irvine, Calif.

Republic used the money it made from real estate lending to grow. It bought $361 million of deposits of a Florida savings bank from the RTC, and has since acquired two other banks in central Florida. It has also picked up numerous branch locations closed during bank mergers and consolidations.

"We moved into locations formerly used by a host of different banks," he said. "There was not as much competition a few years ago as there is today. Essentially, it was a matter of walking in, putting on a new coat of paint, and updating the calendar on the wall. It was a very cost-efficient way to grow."

And last Tuesday, Republic announced plans to buy Bankers Savings Bank, in Coral Gables. That deal would give the bank its first presence in the Miami market.

Kenneth H. Thomas, a Miami-based bank analyst, said that despite Republic's good showing in the past, he still has some concerns about its financial numbers.

"Mr. Sapanski is a bankers' banker," Mr. Thomas said. "But I am a little concerned about the fundamentals. Their numbers are below their peers' average."

As of Sept. 30, the bank reported return on assets of 0.72%, and return on equity of 10.3%. Combined, Florida banks averaged an ROA of 1.31% and an ROE of 14.98% on the same date.

Mr. Sapanski said Republic's weak numbers are a result of the bank's rapid growth-any money earned by the company has been used to expand.

"I always thought we would grow, then stabilize before we grew again," he said. "But over the past few years, everything has come unglued in Florida. We wanted to take advantage of those opportunities. The result is that we have been spending money building the bank rather than pausing to build earnings."

He said increasing shareholder value is still a top priority. "I don't say that lightly, because I am a major shareholder in the bank."

The rapid growth has also extended Republic far beyond its Tampa Bay area base. There are 400 miles between Republic's headquarters here in central Florida and its planned branch expansion into south Florida, and the bank is not yet in any markets in between.

"You could say we don't have the classic concentration, or the critical mass, you normally look for in a region," Mr. Sapanski admitted. "But we believe we can make it work. We aren't just acquiring the real estate, we get the people too. We are getting some well-trained commercial bankers who know the area."

Mr. Sapanski said Republic would be watching for a widely expected second round of NationsBank selloffs.

"The logistics of these far-flung branches will be difficult," said Sam Beebe, a bank analyst in St. Petersburg. "Assuming NationsBank does have a second round of sales, it will give Republic a great opportunity to fill some of its holes in."

Mr. Sapanski said he plans to hang around to fill those holes. Because of his age, analysts have questioned how long he will be at the bank. "For the foreseeable future, I will be here," he said.

"When I was just out of college and working in the accounting group at Dime, I told my wife, 'If I could be the chief bookkeeper here, I would be satisfied for the rest of my career,' " he said. "Needless to say, over time my goals have changed."

And he insists that the goal now is not to build Republic for a sale.

"At first, my goal was to prove I could build a $1 billion asset bank. Now I am at the point of looking to put a statewide institution in place. I want to be around to do that."

Being in new markets also means new competition. Community banks based in the markets Republic is entering say they will compete against Republic the same way they competed against NationsBank.

"This is a very parochial area," said a Florida Keys banker, who spoke on the condition he would not be named. "I would not want to be an out-of- market bank, regardless of its size, trying to stop the momentum of community banks based in this area."

But the new bank in town is ready to do just that. Mr. Sapanski vowed other banks will not be able to steal deposits from Republic.

"My experience is, good service is good service," Mr. Sapanski said. "Customers relate more to individuals than they do organizations. Our message is, 'The same faces you see now are the ones you will be dealing with in the future.'"

And if the local banks do attack Republic in its new territories, they can expect a fight.

"I love competition," Mr. Sapanski said. "If they want (to run ads), that is fine." Then, referring to his lengthy career up north, he added, "What was it Frank Sinatra said? If you can make it in New York, you can make it anywhere."

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