TotalBank has laid off as many as 100 employees over the past week, according to sources familiar with the firings, after discussions to merge with a competitor were called off.
The fired employees represent about a quarter of Miami-based TotalBank’s workforce — and there may be more layoffs to come.
The bank, owned by Spain’s Grupo Banco Popular Español, said in a statement that the number of layoffs is “significantly less than what is being rumored.”
“TotalBank is optimizing the commercial structure of the bank and is making business as usual decisions,” chairman Jorge Rossell said in a statement. “As a result of its continuous investments in technology, talent and infrastructure, staff reductions are natural outcomes of these initiatives.”
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Rossell added that the bank’s recent quarterly earnings and year-end projections had been strong.
According to an Nov. 9 internal memo obtained by the Miami Herald, TotalBank recently decided to merge and eliminate several of its departments.
The memo, written by Rossell, explained that the bank was “centralizing bank operations to the greatest degree possibly . . . by realigning certain functions and responsibilities of the various departments and divisions, headed by officers who have ‘a sense of urgency’ and ‘business sense’ [and] who will act quickly, with decisiveness to identify and eliminate inefficiencies.”
The move meant some employees had to go.
“My email is flooded with résumés,” said an executive at a rival bank.
TotalBank has grown aggressively since the recession, bringing on about 100 employees over the past five years, chief executive Luis de la Aguilera told the Miami Herald in March. It has $2.7 billion in assets, 19 branches in Miami-Dade County and a five-star rating from Bauer Financial.
But Spanish parent Grupo Banco Popular, which paid $300 million for the bank eight years ago, has been looking to cut costs as it seeks to merge TotalBank with a competitor, industry sources said.
The Spanish bank was in discussions to merge its subsidiary with Stonegate Bank late last month, several sources said. The deal would have seen the Pompano Beach-based bank’s CEO David Seleski take the reins at the combined institution. But negotiations ended several weeks ago.
“Seleski taking over could have been one of the sticking points,” said Ken Thomas, a local banking industry analyst who said he wasn’t aware of the proposed merger. “Who’s going to be the big dog? There could have been a management revolt.”
A deal with Gibraltar Private Bank & Trust was also on the table earlier in the year, another source said.
Stonegate made global headlines in July when it agreed to become the first U.S. bank to provide banking services in Cuba since President Barack Obama resumed relations with the island nation.
“There could have been some reputational risk on the part of TotalBank,” Thomas said. “It’s a strong local bank with a Cuban-American customer base. The executives might not have been happy about risking that.”
Stonegate denied that it had considered merging with TotalBank. Said a spokeswoman for the bank: “This rumor is entirely false.”