Updated 11 months ago
Downsizing and reorganizing: It's not business as usual at the second-largest Florida-based bank.
The fortunes of St. Petersburg-based Republic Bancshares (Nasdaq-REPB) changed abruptly at the end of last year, following three highly profitable years of carving out a niche in mortgage banking and debt-based securities. Forgoing the traditional retail focus on deposits, checking accounts and business loans, Chairman and CEO John W. Sapanski had built the bank into a hybrid institution marketing home equity loans to customers who wanted to consolidate debt. The loans were then packaged as securities and resold at a 7% to 9% profit for Republic. In five and a half years, Sapanski grew the bank's business from $160 million to $2.5 billion. Last summer, however, the bottom fell out of the liquidity and asset-backed securities market, fueled in part by the bond crisis in Russia. Then, a $100 million sale on a mortgage package fell through, and instead of looking at a $7 million profit , the bank foresees a loss of up to $12 million for the year and company-wide restructuring.
Sapanski has delayed his retirement to turn the bank around. He says Republic isn't leaving the mortgage business, but will give up a nationwide push to focus instead on Florida. Recent layoffs are cutting deep, affecting about 20% of the bank's overall workforce of more than 1,500 and more than half its mortgage-business staff -- some 340 jobs. Mortgage-business employees not fired may be retrained. Sapanski says Republic has done its last securitization of debt consolidation loans, but will stay in securitized conventional and government loans. When asked what he'd like the bank to look like months from now, Sapanski describes a small-scale Barnett-type bank with good customer service and an asset mix of business, consumer, commercial real estate and residential loans. It's going to take some time and maneuvering, he admits. "We're a $2.5 billion institution but more like a battleship in a lake right now."
Into the Future
While not technically part of the much-ballyhooed "I-4 Corridor," the Ringling School of Art and Design, a small, private four-year college founded in Sarasota more than 60 years ago by circus legend John Ringling, has quietly made a name for itself in the high-tech computer animation field. The computer animation graduates are eagerly recruited by movie-makers like DreamWorks SKG, Disney and Sony Pictures. About a fourth of Ringling's 180 graduates last year specialized in computer animation, which boasts entry level salaries as high as $50,000. The school is also looking to its future with a pilot program aimed at keeping young women interested in high-tech fields. At Ringling, only seven of 45 computer animation grads last year were women. With funding from a small grant, the school has developed a mentoring program designed to cultivate local high school girls' interest in a high-tech career. Says Maria Palazzi, head of the computer animation department: "My students are the next generation of message makers, making the films, games and moving communication that will influence the next generation. I want women to be equally involved in making those messages."
...in the news
Clearwater -- Manufacturer and distributor of specialty medical products Maxxim Medical (NYSE-MAM) has signed a sole source, multi-year contract to supply custom procedure trays to Santa Barbara-based Tenet Healthcare Corp., which owns 128 acute care hospitals and provides health-related services in 18 states. The contract is valued at approximately $11 million.
Naples -- Guest Services Co. of Virginia paid $1.5 million for a hotel site along the Cocohatchee River, where it plans to build the area's first Doubletree hotel. The hotel chain has 19 other locations in Florida.
Polk County -- Youth Basketball of America and the U.S. Association of Independent Gymnastics Clubs will hold their championships in Polk County this year. Last year, the two events together pumped $11.4 million into the local economy. The gymnastics event will be at Grenelefe Golf and Tennis Resort in May; the basketball championships will be held at county high schools and colleges in July.
Meanwhile in Lakeland, construction is about to begin on a new terminal at Lakeland Linder Airport that will be nearly triple the size of the previous terminal. Travelers flying in will be able to drive to either Disney World or Tampa in about half an hour.
St. Petersburg -- Plasma-Therm (Nasdaq-PTIS) laid off 26 of its 200 employees. The manufacturer of equipment used in the production of computer chips and integrated circuits says the job cuts are mostly due to a re-engineering process and officials don't predict further layoffs at this time. The company says plans are still in the works for a 32,000-sq.-ft. combination research and development, training and customer service facility that will mean an additional 100 jobs once it is completed later this year. A slowdown in the building permitting process has held up construction.
Electronics manufacturer Jabil Circuit (NYSE-JBL) is building a new 60,000-sq.-ft. corporate headquarters slated for fall occupancy. Jabil officials say the company may add as many as 30 positions to its corporate staff this year. Jabil reported record revenues of $448 million for the first fiscal quarter of 1999 ending Nov. 30, 1998 -- a 40% increase over the previous year's first quarter.
In downtown St. Petersburg, a group of local investors called Jannus Landing of St. Petersburg Ltd. has purchased the Jannus Landing music venue and its neighbor, the landmark Hotel Detroit, for $3 million. The open-air concert site will get a $300,000 renovation and revamping. Meanwhile, the hotel is undergoing $2 million in renovations and will be transformed into a hotel-condominium complex where investors can buy rooms and then rent them out or live there themselves. Work is expected to be completed this spring.
Tampa -- Stroh Brewery Co. is closing its plant near Busch Gardens, laying off 154. The fourth largest brewing company in the U.S., Stroh is the last of the big beermakers to leave the Tampa Bay area. Last October, Stroh lost a contract with Pabst Brewing Co. that had made up about a quarter of the Tampa brewery's production in 1998.
The Port of Tampa finished its renovations just in time to welcome Carnival Cruise Lines' megaship Sensation in December. Previously in service out of Miami, the ship now will call Tampa home. Cruise passenger visits to Tampa are expected to double to 500,000 in 1999.
American Viking Lines' twice-weekly ferry service between Tampa and the Yucatan Peninsula in southern Mexico was discontinued in early January after operating for only 7 1/2 weeks. The company was unable to make its monthly lease payment on the cruise ship, Scotia Prince, that had carried passengers, cars and RVs as well as cargo between Tampa and Progreso, the port city near Merida. Officials at the Port of Tampa say they are searching for another cruise ferry to serve the Tampa-Yucatan route.
Downtown Tampa is about to get some much needed additional parking. Beers Construction Co. will be adding three floors to the Barnett/NationsBank Plaza Parking Garage. The $3.6 million project will create an additional 1,200 spaces.
Florida 2012, the group leading Tampa's bid to host the 2012 Olympic Games, will set up shop in downtown Tampa in former Tampa Bay Lightning space on Kennedy Blvd. in the Mack-Cali Center.
The 450 jobs that PricewaterhouseCoopers is bringing to Tampa will be in technology services, corporate real estate, financial services and business travel. The pay will be generally about 15% higher than the average wage in the area.
After flirting with bankruptcy last fall, Danka Business Systems PLC (Nasdaq-DANKY), the St. Petersburg-based copier company, is trying to right itself for a comeback in fiscal year 2000 (Danka's 1999 fiscal year ends March 30). The company has presented a restructuring plan to its bank group, which agreed to loan it another $35 million. Danka has struggled since it purchased Eastman Kodak's copier sales and service business more than two years ago. Company stock fell from $12 in July to $2 in November. Founder and former CEO Dan Doyle resigned in October. He later sold off some shares at a loss, but retained his stock options. Analysts like new company President Brian Merriman. He's turned around other troubled companies, such as Savin Corp. and Konica Business Machines. Merriman says Danka is back on track, but he's not saying much more. Prudential Securities analyst Alex Henderson says Danka may sell some assets and is working on a new agreement to distribute Canon and Toshiba products nationally. "The company is putting to bed a troubled (fiscal) '99. Danka has done all the things necessary to set the stage for a good fiscal year 2000." Despite Henderson's rosy outlook, the company's stock still carries a high risk rating at Prudential and other Wall Street brokerages.