Two Florida community banks are about to wrap up a merger negotiated without the advice of either bank's majority owner.
That's because the controlling shareholder at each bank is the same person.
William R. Hough, president of William R. Hough & Co. Securities, St. Petersburg, owns a controlling interest in both Republic Bancsharesof the same city, the holding company for Republic Bank, and F.F.O. Financial Group Inc., Kissimmee, holding company for First Federal Savings and Loan Association of Osceola County.
Republic's acquisition of F.F.O. is expected to be completed as early as Friday. The price has not yet been determined.
Republic will buy 8.4 million outstanding shares of F.F.O. stock with Republic shares to be valued based on Republic's average stock price during 20 days. Republic's stock closed Wednesday at $24.75 a share.
Sharing an owner could have made proceedings more difficult. To avoid regulatory scrutiny, Mr. Hough was not involved in any merger negotiations, according to John Sapanski, chief executive officer of $1 billion-asset Republic.
But as long as there is full disclosure, no rule prohibits banks with a common majority owner from merging.
As of a joint proxy statement filed Aug. 1, Mr. Hough holds 50.6% of the common stock in Republic and 64.2% of F.F.O.'s common.
The deal, which has received regulatory approval, was negotiated by the boards and officers of the two banks, minus Mr. Hough.
Republic officials said their goal in acquiring F.F.O. is to increase share in the Orlando market.
Republic established a market presence in the area last April when it bought two-branch, $90 million-asset Firstate Financial, Orlando. Since that deal was announced, Republic has been looking to establish a "critical mass" in the region, Mr. Sapanski said.
When the merger is completed, Republic would have 46 branches serving nine Florida counties and total assets of about $1.4 billion.
Mr. Sapanski said Orlando is an important market for Republic because it helps diversify the bank. The deal adds a busy commercial real estate market to the bank's traditional market of West Florida retirement homes.
Mr. Hough bought Republic shares in May 1993 from First Union Corp., Charlotte, N.C., which was holding them as collateral on defaulted loans. Mr. Hough bought into F.F.O. in a separate deal.