Citrus County's only local savings and loan association laid off 15 workers this week to continue what thrift officials are calling the "down-sizing" of its operation.
Officials of First Federal Savings and Loan of Citrus County said that on Monday they let go workers who had been with the savings and loan from a few months to as much as 20 years The layoffs affected employees at all levels at all four branches.
The layoffs were effective immediately.
Just three weeks ago, First Federal officials announced plans to join First Federal Savings Bank of New Smyrna to form a holding company. Through that holding company, First Federal of Citrus would be able to buy and sell its own stock for the first time, said Chairman of the Board Charles Davis.
The arrangement, which could be completed by this fall, would pump much-needed capital into First Federal of Citrus. In recent years, losses from real estate loans and shifting interest rates have eroded the base of the institution, officials say.
"In preparation for that move, First Federal of Citrus County has purposely made the decision to decrease the size of its deposits as well as its assets," giving it a stronger capital base, Davis explained.
The savings and loan had held assets in excess of $325-million. Assets now amount to about $242-million, he said.
"We were, before yesterday (Monday), staffed for a much larger association," he said. "We were significantly overstaffed." The staff now numbers 64.
Davis said the savings and loan, which was founded in 1962, also has delved more deeply into computer automation in recent years and "when you become further automated, you just need fewer people."
With the savings and loan poised to join in the holding company and about to begin working for stockholders, Davis said the institution must take a harder look at itself.
"When you're a mutual institution, there are no stockholders, so you're not answering to anybody," Davis said. "But if you ask people to invest in your organization . . . it is necessary to generate a bottom line."
Further layoffs are not anticipated, said Wesley T. Small, chief executive officer for First Federal of Citrus.
While bank officials did not identify those who were let go, Small said First Federal officials tried to soften the blow by offering a severance package and by meeting with employees who were let go.
"But it is very difficult to make something like this painless," he said.
"We've never had to make a decision as difficult as this one," he said. "You're not dealing with employees. You're dealing with friends . . . and our hearts go out to them."