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Banking industry

Wachovia Corp. to Acquire Republic Security Financial Corp. for $344 Million

Strategic Insights

— 1 min read

Wachovia Corp., a banking company based in Winston-Salem, N.C., plans to purchase Republic Security Financial Corp., a bank-holding company based in West Palm Beach, Fla. The proposed acquisition will provide Wachovia with access to several major new markets, including Miami, and expand its presence in Florida. Republic Security's main subsidiary, Republic Security Bank, has 99 branches in 11 counties, with few overlaps with Wachovia's existing network in the state.

Key Takeaways:

  • Wachovia Corp. plans to acquire Republic Security Financial Corp. for $344 million in stock, expanding its presence in Florida and providing access to new markets, including Miami.
  • The acquisition will give Wachovia access to Republic Security's 99 branches in 11 counties, with few overlaps with Wachovia's existing network in the state.
  • Republic Security has assets of $3.4 billion and deposits of $2 billion, with four main operating groups: business banking, personal banking, mortgage banking, and trust and investments.
  • Wachovia expects to achieve cost savings of 25-40% over the next few years by consolidating overlapping support functions and reducing redundancies.
  • The acquisition will result in an after-tax expense of about $8 million and is expected to close in the first quarter of next year, pending shareholder approval and regulatory authorization.
  • Wachovia will maintain Republic Security's chairman and CEO, Rudy E. Schrupp, as chairman of Wachovia's Florida banking business, and will help oversee the transition.
  • The acquisition will provide Wachovia with more than 178,000 new customers and increased revenue opportunities for its array of services, including commercial and wealth-management services.

Statistics:

  • Republic Security has $3.4 billion in assets and $2 billion in deposits.
  • Wachovia has total Southeast assets of $72 billion and will rank 10th in Florida in terms of deposits after the acquisition.
  • Republic Security has 850 employees and 99 branches in 11 counties.
  • Wachovia expects to close on its acquisition of DavisBaldwin Inc., an insurance agency based in Tampa, Fla., on Wednesday.
  • Wachovia's wealth-management subsidiary, Offitbank, has an office in Miami.

Sources:

  • WSJ, "Wachovia Buys Republic Security for $344 Million", October [no date given]
  • BizJournals, "Wachovia Corp. plans to acquire Republic Security Financial Corp.", [no date given]
  • News & Record, "Wachovia to buy Republic Security Financial Corp.", [no date given]

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