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Coffee Talk
Few bank mergers predicted
There are more hunters and fewer of the hunted. That's why Allen C. Ewing & Co. doesn't foresee the pace of Florida bank acquisitions increasing.
In its 13th annual "Review of The Florida Banking Industry," the Jacksonville investment-banking firm recalls the heady 1990s when 20 or 30 state banks could be gobbled up in a year. So far in 2003, just four have changed hands. That's after only 10 transactions for all of 2002.
Simple supply and demand is part of the explanation.
Ewing counts about 240 community banks and thrifts in the Sunshine State today. Ten years ago, there were more than 400. Yet there are in excess of 20 holding companies, many from outside of Florida, looking to pick up one or more of our community banks, according to Ewing.
Another explanation for the scarcity of transactions is that Florida banks are fetching higher prices. The four community banks and thrifts sold up to now in 2003 went for an average of 30.69 times earnings. The average P/E ratio for the 31 community banks and thrifts that were acquired during 1993 was 14.60.
Pent-up demand, of course, could be driving some of these valuations. But the native financial institutions aren't performing too shabbily, either.
Three of the state's 10 best-performing community banks and thrifts, as measured by Ewing using average return-on-equity from 2000 to 2002, have their headquarters on the Gulf Coast.
Orion Bank was fifth on Ewing's top-10 list, with a 3-year ROE average of 19.36%. The Naples bank had $756 million in assets, as of Dec. 31. Jerry Williams, Orion's chairman, chief executive and president, was recently selected banker of the year by the Gulf Coast Business Review.
The $521-million-asset Florida Community Bank, also in Collier County, with headquarters in Immokalee, was next on the Ewing list with an average ROE of 19.23%. Coming in ninth was Largo's $350-million-asset Premier Community Bank of Florida at 17.07%.
Orion made the Ewing Top 10 for the second time. The Florida and Premier community banks had each been there twice before.
... but there will be some
Synovus Financial Corp. announced Oct. 7 that it will acquire the parent of Palm Harbor-based Peoples Bank for a price that wasn't immediately disclosed. The transaction will consist of stock and cash.
A diversified financial services company headquartered in Columbus, Ga., Synovus says the $250-million-asset Peoples Florida Banking Corp. will retain its state charter after the merger and operate as a wholly owned subsidiary. Peoples Bank has branches in Clearwater, Oldsmar and Port Richey, as well as in Palm Harbor.
Synovus, which has assets of more than $21 billion, paid about $75 million last year for United Financial Holdings Inc. of St. Petersburg and owns other banks in North Florida.
The Peoples sales price, once it is revealed in regulatory filings, also will probably be steep. The parent reported record earnings of 40 cents a share for the quarter ended June 30.
The stock of Synovus lost 4 cents a share, falling to $26.74, in early trading on the day after the announcement.
Peoples was founded in 1996 by veteran Florida banker David Dunbar, first runner-up in the Review's recent banker-of-the-year competition. Dunbar told the Review in a recent interview that he had turned down a takeover offer in February that "any other banker would take."
Vern Buchanan vs. Bob Graham?
When the Republican Party of Sarasota County gathers for its annual Statesman of the Year banquet, you'd expect the ballroom to be loaded with political wannabes. And it was.
This year's banquet, held Oct. 8 at Michael's On East Ballroom, honored as its Statesman of the Year 12th Judicial Circuit Public Defender Elliott Metcalfe, a die-hard Republican with a Libertarian bent who has held his elected office for more than a quarter century. While Metcalfe's admirers, including one of Sarasota's renown lawyers, Democrat Lamar Matthews, feted Metcalfe for being the honest-to-goodness version of a compassionate conservative, much of the low-tone buzz in the room centered on two upcoming statewide political races - for Florida governor and the U.S. Senate.
Not surprisingly, most of the prize seekers were there: former Florida speaker and now state Sen. Daniel Webster, Florida Speaker Johnnie Byrd and former Congressman Bill McCollum - all vying for the Republican nomination to the U.S. Senate seat now held by Bob Graham. The gubernatorial hopefuls in attendance were Florida Chief Financial Officer Tom Gallagher and Florida Attorney General Charlie Crist, one of the event's speakers.
When Coffee Talk asked a party insider in attendance to handicap the races, he said Gallagher is the front-runner for Gov. Jeb Bush's chair. "Incredible name recognition," says Coffee Talk's GOP observer.
Then he dropped this one: "All three of the guys running for Senate are good candidates, but do you know the one who can win? Vern Buchanan. He can write the checks."
Buchanan, of course, is the Sarasota entrepreneur-auto dealer (15 dealerships statewide) who has had his sights on public office for the past several years.
And yet Buchanan wasn't even in attendance at the GOP dinner.
Turns out he was in Washington, D.C., attending a presidential gala fund-raiser with some of the nation's top GOP contributors. Reached in between meetings in Washington, Buchanan told Coffee Talk:
"Honestly, I'm seriously looking at it (the Senate race). Our two sons are out of the house now; we're empty nesters. I may make a decision about it in the next few weeks."
Sticky situation
After Ernie Ritz cancelled his lease with Sarasota for the sidewalk property surrounding his former restaurant on the corner of Main and Lemon, not much was happening at that prime location.
Marcia Wood, president of the Downtown Association at the time, felt she could be more successful at quickly finding a new tenant, so the Downtown Association, through Wood, took on that effort.
In doing so, the association, then between executive directors (after Paul Thorpe and before John Tylee), stepped into the lead role, becoming an official third party in the deal.
Wood negotiated with Paul Mattison to get him to open his popular restaurant in a deal any retailer would envy. Under the agreement, Mattison paid no rent for about a year. Mattison also wasn't required to pay any real property or intangible personal property taxes.
Everything was swell until the 2002 tax bill for nearly $55,000 was delivered to the association this past spring. Wood took the tax bill to Mattison, who pointed to his lease; due to Wood's role in the matter, the association became liable for Mattison's tax bill.
Wood then took the tax bill to the city and asked the city to forgive the taxes or make Mattison pay it. But as Sarasota City Manager Mike McNees pointed out to Coffee Talk, the tax bill was for property taxes, which cannot be forgiven.
That left the association liable for the bill that incurs 12% interest until it is paid. The association is not exactly flush with extra cash to pay the bill.
So the bill still has not been paid, interest is still accruing, and due to the unpaid taxes, the city recently denied Mattison's request for valet parking.
At the association's urging, the city and Mattison are working out a direct lease agreement, and apparently Mattison has expressed a willingness to pay the outstanding tax bill to ease the transition of the lease.
"It's appropriate to let the Downtown Association out of this," says McNees. "However, it's my understanding that no deal has been finalized, and the city commission has to sign off on any lease. We don't care who pays the tax bill; we just want it paid."
When asked about the deal, Wood denied the awkward difficulties others readily admitted. Wood told Coffee Talk there is no problem, the lease is not in limbo and the tax bill has been handled. Regarding the lease provision exempting Mattison from paying taxes, Wood says: "The lease was not clear on that issue. There were some little miscommunications, but it's all been worked out. It's our opinion that we're out of it. Sorry, but there's no story here."
Paul Mattison, on vacation in Italy, was unavailable for comment.
Affordable housing problems
At the Oct. 2 Tiger Bay Club luncheon, banker and Sarasota affordable housing champion Jody Hudgins shared with the audience the Department of Housing and Urban Development's definition of "affordable housing." HUD Guidelines say affordable housing is housing that will accommodate up to 120% of the median income for the area.
In the Sarasota area, the median income for a family of four is $53,000, so affordable housing in this area, according to HUD, would be housing that can be supported by up to $64,000 annual income. That translates into housing priced between $120,000 and $190,000. So far, new homes within that range are appearing far outside the city limits, and even then, they are increasingly rare.
Hudgins says a family that spends more than 30% of their income on housing or on rent plus utilities is considered "cost burdened." In Sarasota County, about 40% of renters and about 20% of homeowners are cost burdened.
Inclusionary zoning is the topic more likely to get local developers fired up - it's an overlay district for large subdivisions. Hudgins explained that within the inclusionary zoning overlay, any subdivision with more than 50 units must reserve 15% of those units for incomes in the affordable housing range. The reserved units must be identical to other units. In exchange, a developer could get a 15% increase in density. If a developer chooses not to make the reservation, he must pay a sum equal to the 15% difference into a trust fund for the county to buy infill, buy down mortgages, buy real estate elsewhere for affordable housing, etc. The county is looking for a way to implement this overlay.
Comic troubles
If your company were hitting some tough financial waves - or even rumors - you probably wouldn't encourage discussion about it among your most loyal customers.
And you certainly wouldn't want your own corporate Web site used as the enabling device.
But that's exactly the situation that Oldsmar comic book publisher CrossGen finds itself in this week following a note in Publishers Weekly that it is cutting back staff and looking for fresh financing.
CrossGen fans are signing into the company's own message boards (www.crossgen.com; then click on "Buzz!" and scroll to the entry "George Perez Speaks!") and debating its problems and solutions on the company's dime.
It all started with staff artist George Perez, one of the most respected and well paid artists in modern comics, who began his Oct. 2 post by saying, "I don't believe that my business dealings with any company should be played out in a public arena." But he went on, anyway.
"I know how expensive I am, and I wouldn't have taken any offense if I had to be fired outright due to financial belt-tightening caused (by) the company's restructuring," he wrote. "Instead, CrossGen generously decided to keep me on."
Perez says he has "great confidence" CrossGen founder Mark Alessi will put the company on the right track. Curiously, CrossGen has not yet issued any official comment on its status. And neither Alessi nor his spokesman, Bill Roseman, returned repeated calls for comment.
Douglas Wolk of Publishers Weekly wrote that many of CrossGen's staff artists have switched to freelance status while others are still on staff with cuts in pay. The company, which has sold the film rights to many of its creations and recently announced plans to offer enhanced comic books on DVD, launched a new version of its 18-month-old "Comics on the Web" project on AOL.
CrossGen's problems follow the recent shutdown of most operations at Hillsborough County's other comic book publisher, Future Comics in Brandon.
Tooting our own horn
The Florida Press Club recently announced most of the winners of its 2003 Excellence in Journalism Awards, to be presented at a dinner in Naples on Oct. 25. The Review is in publication class D, which includes all weekly, biweekly and trade publications in the state. Florida Press Club winners announced thus far include two first place awards for Gulf Coast Business Review's senior editor, Kendall Jones. She took first place in the in-depth news writing and local government categories. Real estate editor Sean Roth won first place for business writing.
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