Joining a growing list of out-of-state banking companies attracted by Florida's rapid growth, Northwest Bancorp Inc. of Warren, Pa., plans to buy its way into the state with an $11.8 million all-cash deal for a small company outside Miami.
The population of Broward County, the home of Northwest's target, the $89 million-asset Equinox Financial Corp., has been growing by 25,000 to 30,000 a year, and Bill Leonard, a spokesman for county, said that growth is expected to continue for the foreseeable future.
Broward's population was 1.6 million in 2000 but is expected to reach 2.5 million in 2030.
William Wagner, the president and chief executive officer at the $6.4 billion-asset Northwest, said in a press release Thursday, when the deal was announced, that those demographics attracted it to Equinox, a privately held company founded in 1999.
Northwest is the fourth out-of-state banking company this year to announce a deal that would put it in Florida for the first time, to go along with a slew of out-of-state companies that have made multiple acquisitions there in recent years. The buyer in more than half of the 27 Florida deals announced since the beginning of last year was from another state.
Several other companies have moved into Florida by building branches. The $2.8 billion-asset TrustCo Bank Corp NY of Glenville, N.Y., has built six branches in Florida since 2003, and the $8.2 billion-asset Third Federal Savings and Loan in Cleveland has opened 14 in the state since 1999.
Robert Schweitzer, Equinox's president and CEO, said it is obvious why out-of-state banks want to be in Florida.
"We're growing like mad," he said.
Richard D. Weiss, an analyst who covers Northwest for Janney Montgomery Scott LLC in Philadelphia, said the deal caught him off guard. Though it is no surprise that Northwest announced a deal - it has made five acquisitions since 2000 - he expected its next one to be closer to home.
"I figured they would have tried to expand in Maryland," Mr. Weiss said. "The growth in Florida is phenomenal, but the competition is a lot tougher, too."
Northwest acquired Leeds Federal Savings Bank outside Baltimore in 2003 but has not added to its Maryland operations since then, though Mr. Wagner told American Banker in September that Northwest would probably begin looking for expansion opportunities there in the fall of 2005.
James Record, who covers Northwest for Moors & Cabot Inc. in Boston, said the Leeds acquisition - Northwest's first outside Pennsylvania - might have paved the way for the expansion into Florida.
"I think it gave the management team the confidence that it could handle a remote operation," he said. Mr. Record also said Equinox Financial, whose Equinox Bank operates one branch, in the town of Pembroke Pines, also fits the profile of Northwest's acquisition targets: small companies that do not command huge premiums.
"They take a very cautious approach," he said. "They don't like to pay a lot."
Equinox Financial reported a profit of $240,000 for last year but has struggled some with credit quality issues. At yearend its nonperforming loans amounted to 3.11% of its loan portfolio. However, its chargeoffs have been minimal - $26,000 last year.
Northwest expects to close the deal in the fourth quarter. Mr. Schweitzer said the two companies have not discussed whether he and his management team would join Northwest.
