K.H. Thomas Associates - BranchLocation.com

Hemisphere National To Become Republic Federal
By Jim Freer
Friday, February 16, 2007

The Hemisphere National Bank is changing its name to Republic Federal Bank and is preparing a strategy that will feature free worldwide ATM usage for its customers.

The Miami-based bank also plans to offer a larger menu of loans and other services to its South Florida client base of "doctors, lawyers, engineers and other entrepreneurs," Chairman and CEO Walter Cook said.

Hemisphere will unveil Republic Federal signs at its five offices, all in Miami-Dade County, on Feb. 20, he said.

The change follows Hemisphere's September purchase of most of the deposits and loans of Miami-based Pine Bank, whose owners are based in Brazil.

After adding Pine business, Hemisphere increased its assets from $320 million on June 30 to $713 million on Sept. 30.

The name change shows "that we are a much larger bank" with "an entirely new business focus," Cook said. Surveys of businesspeople showed the word "republic" indicates tradition and strength, he said.

Cook and several other members of Hemisphere management worked for Republic Bank of New York before its 2000 sale to London-based HSBC Holdings.

Cook said, as far as he knows, Republic Federal will be the only South Florida-based bank that will refund customers the fees other banks, in any country, charge for using their ATMs.

Hemisphere already charges no fees to customers who use ATMs at its offices, including Pine's former headquarters at 1001 Brickell Bay Drive. The bank does not charge its customers for using other banks' ATMs in the United States and abroad.

The change, coming within several weeks, will be refunding other banks' fees - which, in some cases, are more than $2 a transaction. (Industry data is not readily available on the number of banks that refund those fees.)

ATM refunds will be popular with former Pine customers, including businesspeople who spend part of each year in South Florida, but are residents of Brazil and other Latin American countries, Cook said.

He would not disclose projected costs for the ATM refunds.

Banking consultant Ken Thomas anticipates those costs might not be large for a bank of Hemisphere's size. He noted that very few depositors it gained from Pine are consumers who frequently use ATMs.

Pine had regulators' designation as a wholesale bank, based on its business plan, in which it did not actively solicit deposits and loans in its local market.

"What Hemisphere is doing with ATMs could be a good strategy for bringing in local customers," said Thomas, president of Miami-based BranchLocation.com.

An April 2006 survey of 247 U.S. banks by Bankrate.com showed 81 percent charged their customers to use other banks' ATMs, at an average of $1.29 a transaction.

The survey showed 98 percent of those banks charged customers of other banks to use their ATMs, at an average of $1.60 a transaction.

Hemisphere's 2007 plans also include offering more lines of credit to local businesses and more home equity loans. The bank's major programs are residential mortgages and loans for businesses to purchase buildings they use for operations.

The renamed bank will continue to finance trade for South Florida businesses, using Export-Import Bank of the United States' guarantee and insurance programs.

Cook is chairman of Miami-based Privee Financial, a holding company that bought Hemisphere in 2004.

Losses were largely due to adding staff for compliance and new lending programs, and some third quarter 2006 costs associated with buying Pine's business, Cook said.

Hemisphere's ratio of non-performing loans to total loans was 1.23 percent on Sept. 30 - above the 1 percent regulators consider troublesome. Some problem loans were from previous management and some were local mortgage loans from Pine, Cook said.

Cook said the bank will soon reduce its non-performing ratio to about 0.5 percent. The bank made a profit in January and expects to remain profitable, he said.

"We had to spend by hiring people and adding tools for the services we will provide," Cook said. "The Pine business helped us gain the size we were seeking. We have the pieces in place to provide a high degree of service that will help us stand out to entrepreneurs."