Florida banks sowing retirees' cash in fresh new business orchards

In 1980, Miami's Southeast bank group was king. Today Barnett Banks, based in Jacksonville, is the biggest group in Florida, and the Sun Banks group, based in Orlando, eyes the No. 2 spot from which it has slipped.

Competition is fierce in Florida's lucrative banking market: Barnett, Southeast, and Sun are just the top three of 470 separately chartered banks dotting the Florida map, as opposed to a handful in California.

The prize all these banks compete for is a share of the deposit-rich Florida banking market, awash with retiree savings. This prize has also caused longing looks from big money-center banks in New York and California. Florida, moreover, has the added lure of being the conduit through which Latin American funds flow into the United States, notes Allen J. Lastinger Jr., director of community banks at Barnett Banks of Florida Inc.

Florida has achieved a ''certain critical mass'' for attracting businesses to its growing labor pool and market, Mr. Lastinger says. Business has been shifting from industries such as construction, retailing, and services that cater to consumers. The shift has been in the direction of companies - especially in high-tech - that sell to other businesses. Growing industrial concentration in Tampa and Orlando, for example, has increased financing demand from new and expanding firms.

Mirroring this growth, Barnett has renewed its push into corporate financing in the past three years, muscling in on the giant, Miami-based Southeast Banking Corporation's traditional turf.

For years Barnett has been primarily a consumer bank - and Barnett's advertising people have been very vocal about its excellent consumer services. ''They kept telling everyone they were the best until everyone began to believe it,'' one observer comments wryly.

But analysts say Barnett has earned its good name. Over the last five years, as it has gulped down 14 banks and opened 101 new offices, it has boasted an average growth in earnings rate of 20 percent. ''Barnett has one of the best records in Florida banking consistently, year after year,'' says Samuel Beebe, manager of the research department at Tampa-based Williams Securities Group Inc. , a brokerage firm.

The folks at Barnett seem to have a talent for directing successful growth. ''They have been exceptional at taking over companies and melding them into the fold,'' Mr. Beebe says. While the Barnett holding company brings to each ''marriage'' its expert marketing savvy, it allows the local banks ''a reasonable amount of autonomy to react flexibly to local conditions,'' he notes.

Not so Orlando-based Sun Banks, one of Barnett's rivals, which merged with Flagship Banks (then the fifth largest in Florida) last January. Sun's stock has been selling at below book value, says Timothy G. Rayl, a bank analyst at Raymond, James & Associates, a brokerage in St. Petersburg. The lower market value and relatively lower earnings ratio show that Sun's merger with ''a company of that size has proved to be a bigger job than (Sun) anticipated.''

Barnett's people attribute its success to careful attention to customers - a policy analysts say is much more clearly defined than at Miami's Southeast. Southeast announced it was closing the door to new retail loans when soaring interest rates smacked up against Florida's usury ceilings of 18 percent in 1979 -80; Barnett, on the other hand, kept making loans. Although Southeast's earnings have woven an ''erratic record'' in past years, Beebe thinks the bank is turning around now.

One of the Barnett strengths, enabling it to surpass giant Southeast in earnings and assets, is an aggressive marketing program. Barnett has drawn good response from programs providing financial and information services for potential new Floridians and customers over age 55, says James Covington, vice-president of marketing.

Barnett's renewed thrust into business financing is built around its cash management product line. It is centered on a micro-computer-based, in-office banking program, the ''Centric'' system. This allows financial officers to pay bills and initiate investment transactions right from the office. ''We're the first to really try to penetrate the lower end of the market,'' says Charles Wilson, vice-president of corporate marketing.

Increased competition on the consumer banking side may be another reason for Barnett's push into the business market, says Rick Rivard, an associate professor in money and banking at the University of South Florida, north of Tampa. ''With the deregulation, you have got savings-and-loans, credit unions, savings banks, offering the same services to the consumer that banks traditionally had a monopoly on,'' he notes.

Banks catering to neighborhood small businesses will not be threatened by deregulation, Mr. Rivard contends. ''On the next level, though, the Suns and the Barnetts, they're the ones that are in the squeeze. They're the ones that are going to want to compete in the things that Citicorp is good at.'' Between these two extremes is a tier of medium statewide banks; these would be the most likely acquisition targets of big money-center banks.

But new regional banking laws in the South have given Florida's leading banks time to grow large enough, by absorbing that middle layer of state banks, to compete with the money-center banks, Rivard says. (Those regional banking laws, which block the entrance of faraway banks such as those based in New York while giving preference to banks from neighboring states, have been challenged in the courts, primarily by Citicorp and Chase Manhattan.)

Typically, money-center banks have great personnel and technology. ''At some critical mass - and I've heard the $10 billion level used - you have more capacity for that than if you are a smaller bank,'' Mr. Lastinger says. Barnett, at $11.5 billion, just edges into the playground with the big boys, he implies.

Will Barnett be far behind Sun, which is planning to merge with Trust Company of Georgia? Barnett is probably considering acquiring an out-of-state bank or two, says Bebee. But Barnett is playing the game close to the chest. ''We are delighted to have the opportunity to expand beyond Florida,'' says Lastinger, but ''just because the law allows us to do something does not mean we are going to do it.''