Republic Bancshares has taken down its "for sale" sign.
Six months after hiring an investment banker to help it find a buyer, the St. Petersburg, Fla., banking company said last week that it would remain independent "for the foreseeable future."
"Our board went through an exhaustive review process with our investment banker and came to the conclusion that this was the best alternative," said William R. Falzone, chief financial officer at $2.5 billion-asset Republic. The company did not identify the investment banker.
Mr. Falzone said he could not discuss how many offers the company had received or how much potential buyers were willing to pay. But a local newspaper reported last week that Republic had rejected a number of offers it considered too low.
Republic's stock price fell sharply on news that it is no longer on the block.
The shares tumbled 12.18%, to $17.125, on Friday, the first day of trading after Republic's announcement.
Republic was on its way to a banner year in 1998 until early in the fourth quarter when secondary market demand for its mortgage loans abruptly dried up. The company ended up losing a whopping $21 million in the fourth quarter and $12.7 million for the year.
It has since shuttered its once-thriving Flagship Mortgage subsidiary, costing nearly 600 jobs.
Mr. Falzone said the company is originating mortgages only to customers in its markets. He added that Republic, which has 82 branches throughout Florida, is focusing on building its small-business and consumer loan portfolios and had originated about $155 million of loans through the end of May.
Analysts' reaction to Republic's announcement was mixed. Alan Morel, an analyst at Hilliard & Lyons Inc. in Louisville, Ky., said that as the largest bank in the Tampa Bay market and among the largest in Florida, Republic is well-positioned to capitalize on growth in the state.
He pointed out that Republic has plenty of capital left over from a secondary offering last year to finance any expansion needed. He also said he expects the company to build its commercial business through the 24 branches it has opened in the last eight months.
Republic acquired the branches-but not their assets-from the former NationsBank Corp.
"It would have been a shame for them to sell before their potential was realized," said Mr. Morel, who projects that Republic will earn $1.40 a share this year.
But Christopher Parker, an analyst at Ryan, Beck & Co. in Livingston, N.J., said the company still has a lot to prove.
He said Republic must figure out a way to improve its efficiency while trying to turn its new branches into money makers.
"They've got a lot of balls in the air right now," said Mr. Parker, whose 1999 earnings projection is a far more modest 85 cents a share. "The real key task will be in its ability to manage its growth."
The company's leadership is unsettled, too. Its president and chief executive officer, John W. Sapanski, retired this year and was succeeded on an interim basis by board member Alfred T. May. Mr. May has said he will stay on until a permanent CEO is named.