Flush with $1.2 billion of new capital from its initial public offering, Third Federal Savings and Loan Association in Cleveland is eyeing an expansion in Florida.
The $8.7 billion-asset thrift formed a mutual holding company, TFS Financial Corp., last month and sold 30% of its stock to the public. The IPO was one of the largest ever for a converting thrift.
TFS said Marc A. Stefanski, its chairman, president, and chief executive, was unavailable to discuss its plans last week.
But Monica Martines, a spokeswoman for Third Federal, said it intends to use the proceeds from the conversion to expand, “especially in Florida.”
Ms. Martines said it would likely build rather than buy, but Theodore P. Kovaleff, an analyst who follows thrift conversions closely, said Third Federal almost certainly would have to consider acquisitions.
“The amount of money they raised is so substantial that I don’t think it would be possible for them to open de novos with all of it,” said Mr. Kovaleff, the senior bank and thrift analyst at Sky Capital LLC in New York.
It would not be possible for Third Federal to hire enough bankers to staff a lot of new locations, he said.
John C. Donnelly, the managing director of financial services at Donnelly, Penman & Partners in Grosse Pointe, Mich., agreed that a good banker is hard to find in Florida.
“Bankers in Florida are a little bit like rock stars right now. They are in very high demand. There’s more capital than there are available talented bankers,” Mr. Donnelly said.
Third Federal’s plan to bulk up there is “another good example of Midwestern capital chasing growth in Florida,” he said.
With much of the Midwest mired in a prolonged economic slump, bankers there have been aggressively expanding into wealthier, faster-growing places, including Texas, California, Arizona, and, most notably, Florida.
Since the beginning of last year banking companies based in the Midwest have struck nine deals in Florida, according to data from SNL Securities LC. Third Federal’s hometown rival, National City Corp., bought banks in Fort Pierce and West Palm Beach, paying more than $1 billion for each.
Mr. Kovaleff said that even though Florida’s housing market has slowed, job and population growth are still strong.
As an example of job growth, he cited the Scripps Research Center’s 2005 groundbreaking for a science center that is supposed to be completed this year in Palm Beach County. “That is going to be an incubator of a lot of new start-up companies. They always form around places like this,” he said.
Third Federal opened its first branch in Florida in 1999 and now has 14 branches there in eight counties, according to Federal Deposit Insurance Corp. data. It has 29 branches in Ohio, mostly in and around Cleveland, but has not added any in the state in nearly a decade.
Mr. Kovaleff said the recent IPO has given Third Federal plenty of options for growth. He also noted that the thrift sold only 30% of its stock, even though it could have sold up to 49.9%.
“They did not sell as much as they could have,” Mr. Kovaleff said. “What this does, it allows them, in an acquisition, to either pay cash or to do a mixture of cash and stock.”
