The decision of Republic Bancshares in St. Petersburg, Fla., to shutter its troubled mortgage banking unit and eliminate 340 jobs can be traced to turmoil in the financial markets.

In the third quarter the company sold a package of subprime mortgage loans on the secondary market at a 107% premium. But by the fourth quarter- with markets in Russia, Asia, and South America in peril-skittish investors were offering less than Republic spent to make those loans.

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