Damage control tops the agenda of William R. Klich, the new president and chief executive officer of $2.6 billion asset Republic Bancshares in St. Petersburg, Fla.

The SunTrust Bank veteran took the reins March 20. Republic, with 81 branches in 20 counties, is the third-largest bank headquartered in Florida.

Confidence was shaken last month when Republic revealed deficiencies in its warehouse lending division, which provides mortgage companies with interim financing secured by loans held for sale. And some observers wonder how well Republic will manage a branch network that grew more than 40% with last year's purchase of 25 former NationsBank branches.

Republic's stock has been hovering around $12 the past few weeks, down from $20 a year ago.

Mr. Klich is wooing analysts and investors by pledging a fine-tooth-comb review of operations - "Over the next 90 days there will be a very close check on everybody" - as well as conservative underwriting and financial reporting.

He also said he plans to talk with Federal Deposit Insurance Corp. officials and state authorities "to rebuild our credibility."

"The bank has been in a growth mode," he told a group of investors and analysts last week in New York. Now, he said, Republic "needs to digest, and evaluate where it's at,"

"You don't have to be the biggest to be the best," Mr. Klich said. "I learned that at SunTrust. There, credit quality was the goal - and I plan to borrow that culture."

Mr. Klich ran SunTrust's $2.4 billion-asset Gulf Coast operation in Sarasota, Fla.

As for warehouse lending, "I want to be assured we have discovered all of the issues from the past and then move forward," he said.

He and chief financial officer William R. Falzone said Republic has not determined the extent of the damage, but Mr. Falzone said losses would not exceed $6 million.

Mr. Klich said he wants Republic to stop looking for out-of-state business. "Our future focus is Florida banking," he said. "We won't be looking to be doing business out-of-state."

Though the company lost $12.7 million in 1998, mainly because of the failure of its once-thriving Flagship Mortgage subsidiary, it earned $10.7 million last year and expects to do the same "if not a little better" this year, Mr. Klich said.

To boost earnings, he said, he will focus on commercial, small-business, and traditional residential lending. Mr. Klich said he will meet with senior and middle management teams after the April 18 shareholder meeting to put together a three-year business plan.

In his new role Mr. Klich succeeded Alfred May, chairman of Republic Bank, who had been acting president and CEO of the bank since John Sapanski's retirement a year ago.

Roberta Probber, an analyst at Ryan, Beck & Co. in Livingston, N.J., was particularly pleased with Mr. Klich's plans to review and track how each unit and branch makes money.

Analyst Richard D. Weiss of Janney Montgomery Scott in Philadelphia said Mr. Klich is capable of building investor confidence and earnings. He said he was impressed that the new CEO did not make any "wild promises."

"He wasn't afraid to say he didn't know or 'I need more time.' That inspires confidence."

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