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Coffee Talk
Bankers nervous about '06
Bankers are downcast about the American economy.
A disappointing quarterly report from Bank of America renewed fears that 2006 is not going to be a great year for banks. Punk Ziegel & Co. analyst Richard X. Bove of Pinellas Park was among those lowering profit estimates for B of A.
An annual survey by Grant Thornton LLP shows only 35% of bankers are optimistic, compared to 68% in 2005. Executives at large institutions were as pessimistic as those at small ones, according to the accounting firm.
John Ziegelbauer, national managing partner of Grant Thornton's bank practice, says gas prices and the housing bubble made for the uncertain outlook, along with hurricanes and Federal Reserve Chairman Alan Greenspan's retirement.
As for their own business, 45% of Grant Thornton respondents had expected their core deposits would rise in 2005. But deposits went up at only 38% of the banks.
Just 29% of bankers expect deposit increases in 2006. While deprived of a cheap source of funds to lend, bankers are bracing for more loan losses along with more credit and check card fraud this year. Some Gulf Coast customers are also down.
RBC Centura Bank has cased the Southeast for consumer confidence and found less of it than in past years. Faith in America's economic future headed downward during the second half of 2005 among residents of the Carolinas, Florida, Georgia and Virginia. RBC Centura, the Royal Bank of Canada unit that serves those states, blames hurricane wariness.
Respondents who were poorer, less educated and lived farther from cities turned out to be the least optimistic, according to RBC Centura.
Bank of America says sell Radiation Therapy Services
Is Radiation Therapy Services' stock price too rich? Bank of America analyst Gary Taylor thinks so. His fear is that Medicare might cut reimbursement rates for cancer treatment in 2007, thus hurting the Fort Myers-based radiation oncology company that counts on the government agency for half its revenues.
Radiation Therapy's stock (symbol RTSX) rose 154% in 2005, giving the company the biggest stock-price gain of any Gulf Coast-based publicly held company.
Taylor tells clients in a note published Jan. 20 (the same day the Review profiled the company) that the current stock price of $33 doesn't reflect the risk of potentially lower Medicare reimbursement rates in 2007. Taylor issued a "sell" rating on the company and has a 12-month price target of $22.
Although Radiation Therapy's shares declined 13% to $27.87 on the day the report was issued, investors took the advice in stride and the shares bounced back to $33 four days later.
"A lot of people read those things, trade and ask questions later," says David Koeninger, Radiation Therapy's chief financial officer. He says the company is not aware of any proposed major changes in Medicare's reimbursement schedules.
New Bradenton design rules?
After decades of markets and building codes determining development, Bradenton is taking steps to more aggressively shape future growth. Spearheading these new design standards is Tim Polk, the director of city's Department of Development Services.
"What we're trying to do is take out the guess work," Polk says. "This is about the architectural compatibility of new development. We want to give developers an idea of what we expect them to come to the table with. We want to create some objective, not subjective, standards."
The concept is described as incentive-based. The proposal would add a new design review to the site plan and review processes while setting standards for design elements and height based on location and zoning. All of this promises to cause significant private sector problems. Just ask Sarasota officials, who have struggled for years to come up a workable downtown design code.
Rick Fawley, part owner of one of Manatee County's most prolific architectural firms, Bradenton-based Fawley Bryant Architects Inc., says the viability of a the standards will depend on the details and rigidity.
Fawley says raising standards "shouldn't be accomplished through prescriptive rules . . . Will this be a collection of codes or will this be a review committee where some really positive debate can occur?
"If predictability is all they're after, they've already got the zoning code. I've never understood how they can set these hard and fast rules. Why is 35 feet okay, but not 35 feet and six inches? It's just ridiculous."
Farmlands growing greenbacks
A new survey by the University of Florida shows that demand for land has pushed the value of agricultural land to new record levels statewide.
According John Reynolds, a professor with UF's Institute of Food and Agricultural Sciences, agricultural land prices increased by 50% to 88% from 2004 to 2005, and most of the farmland was not being valued or purchased for agricultural purposes.
Reynolds' 2005 survey measures changes over the past year. The survey also measured the value of transition land – acreage being converted or likely to be converted to nonagricultural sites for homes, subdivisions and commercial uses.
Within five miles of a major town, the value of transition land ranged from $18,423 per acre to $46,481 per acre. The value of transition land more than five miles from a major town ranged from $10,758 per acre to $23,575 per acre, except in the southeast region where transition land values were $66,667 per acre.
A real estate tip from Hizzoner
If you own property along Martin Luther King Jr. Boulevard in Fort Myers, you might want to shelve any immediate plans to sell. In an effort to alleviate the shortage of workforce housing in Fort Myers, Mayor Jim Humphrey's staff identified 900 vacant lots along that stretch of road.
The mayor told a recent gathering of business executives that his staff is working on a plan that would have the city acquire land along that stretch of road. It would then turn those lots over to developers and homebuilders on the condition they sell homes to working people at well below the current median price of about $300,000.
"If you have property along there, you ought to hold onto it for a little while," Humphrey suggested.
Front burner
Feb. 2 - Suncoast Advertising Federation will hold a free gallery night to preview the entries to the 2006 Suncoast ADDY awards from 4 to 9 p.m. at the Digital Technology Centre, 4440 Fruitville Road, Sarasota.
Feb. 6 - The Center for Innovation and Technology at Manatee Community College will hold a one-day workshop, "Meet the Bankers," for entrepreneurs considering starting a business. For more information, contact Dr. Tom Davenport at 363-7212.
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