A large Ohio thrift is diving into Florida, announcing plans to open five full-service branches there this fall.

The move will give Third Federal Savings and Loan Association in Cleveland its first major presence outside Ohio. Third Federal is the nation's largest mutually owned thrift at $6.2 billion of assets.

The thrift plans to spread the five branches along 60 miles of Florida's west coast, a strategy that some experts criticize as too little, too late.

Marc A. Stefanski, chairman and chief executive officer of Third Federal, said the expansion will allow the thrift to reconnect with former customers who have headed south.

It is no secret that a lot of folks from the Midwest are moving to Florida, said Mr. Stefanski, whose parents founded the company in 1938. It seems natural for us to follow our customers.

Third Federal plans to offer above-market rates on certificates of deposits to attract market share, the same strategy it has used in Ohio. The company plans to begin newspaper advertising in the next few weeks, introducing potential customers to the Third Federal name, and offering high-rate CDs over the telephone.

But some Florida consultants said deposit rates are already sky high because of intense competition in west Florida.

Honestly, I don't know anyone who has come into this area, paid up for deposits, and had success with it, said Richard P. Hunt, chairman of Kendrick, Pierce & Co., a Tampa-based consulting firm. There are so many people paying up right now, it is hard to stand out that way.

Kenneth H. Thomas, a Miami bank consultant, said Third Federal might be entering Florida too late. It is much more expensive to do so now than it was in the early 1990s, when some of the state's largest thrifts were failing and out-of-state giants such as First Union Corp. were picking up deposits for next to nothing.

Now, the economy is red hot and mergers have eliminated most of the takeover targets, Mr. Thomas said. The only choice left is to overpay for small franchises, or de novo in and overpay for deposits.

The consultants also questioned Third Federal's decision to spread the new branches over five cities, instead of concentrating its resources in one market.

With the offices so far apart, it is unlikely that many potential customers will find a branch nearby.

Mr. Stefanski countered that Third Federal will be able to add fill-in branches as they are needed and that it will use its status as a mutual company to its advantage to beat whatever rates are offered in Florida.

A stock company has different priorities than ours, because they have to consider their shareholders, he said. We constantly can offer the highest rate on deposits and the lowest on mortgages because of our unique structure.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.