For several years Florida's Republic Security Bank has been evolving into a bank in thrift's clothing.
This week, the $280 million-asset West Palm Beach institution is discarding that covering, by applying to the state and to the Federal Reserve Board of Atlanta to scrap its federal thrift charter and become a bank.
"We determined four years ago that this made a lot more sense for shareholders and for the operation of the company than did the existing thrift charter," said Rudy E. Schupp, Republic Security's chairman, president, and chief executive.
Mr. Schupp, who founded the savings bank in 1984 at the age of 32, is not new to bringing the thrift and commercial banking businesses together.
As a director of the Florida League of Financial Institutions, he championed a merger between the thrift association and the Florida Bankers Association, which occurred last spring.
The primary reason behind the conversion is that Republic wants the option of further expanding its commercial loan portfolio to meet the changing needs of its customers in Palm Beach County, said Mr. Schupp.
A recent infusion of new businesses in the area - such as technology and manufacturing firms - have necessitated commercial loan growth, he added.
Republic will join six other federal thrifts that have converted to state banks in the past five years.
As early as 1989 - after the passage of the Financial Institutions Reform, Recovery and Enforcement Act - Republic began making a series of moves toward becoming a commercial bank.
It hired personnel with commercial bank experience, including two former community bank presidents. Today, 75% of Republic Security personnel come from commercial banks, Mr. Schupp said.
It also aggressively diversified its loan and deposit mix. Demand deposits make up more than 30% of its current total, on par with or higher than the levels at most commercial banks in the area, he said.
The evolution took a major step last winter, when Republic Security made the unusual move of acquiring a nearby commercial bank, $80 million-asset Governors Bank Corp., and folding it into the company.
Mr. Schupp said the conversion has nothing to do with the bank and thrift insurance fund controversy stirring at the moment. His company will continue to pay 75% of its insurance premiums to the Savings Association Insurance Fund and 25% to the Bank Insurance Fund.