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Coffee Talk (Sara/Mana)
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It's hard for us not to be jealous when a stellar company moves out of the area, but CEDC's departure truly has us green. Central European Distribution Corp., which relocated its headquarters to Bala Cynwyd, Pa., without fanfare in February, has continued its stratospheric financial ride. In the June 6 issue of BusinessWeek, CEDC was ranked 11 out of 100 of the hottest growth publicly traded small companies.
The Polish alcohol distributorship, which also made an appearance on the list last year, generated earnings of $21.8 million on sales of $580.7 million in 2004. Looking at its three-year average, CEDC's sales increased by 48% while its profits increased 102.7%.
The magazine based its ranking on sales growth, earnings growth and return on invested capital. Only companies with annual revenues of between $50 million and $1.5 billion, market value of more than $25 million and a current sales price of at least $5 were considered.
The company, which maintains a small U.S. headquarters, originally moved to Sarasota from Virginia in late 1998.
William Carey, president and CEO of CEDC, was a finalist for the Review's Top Entrepreneur award for three straight years from 2002-2004.
Loans hold key
Net interest margin growth is keeping earnings in good shape for banks and thrifts in the eastern United States, according to a new report by Ryan Beck & Co.
Most banks repositioned their balance sheets last year in the expectation that long-term interest rates would rise. Those rates haven't risen yet. But the greater pricing flexibility implemented by many bankers in 2004 has helped their bottom lines through the first quarter of this year, says Ryan Beck, an investment firm in Florham Park, N.J.
Of the 85 financial institutions covered by Ryan Beck, earnings grew at a median 2% during the first quarter of 2005 over the last quarter of 2004. The quarter-over-quarter median increases in the third and fourth quarters of last year were between 2% and 3%.
But the industry will have to find a new trick to keep the streak going, says Ryan Beck analyst Collyn B. Gilbert in the report.
"As the yield curve retains its fairly flat shape, the primary driver of future net interest income growth will most likely derive from overall earning asset growth," writes Gilbert.
AmSouth Bancorporation and Synovus Financial Corp. are doing an especially good job of putting loans on the books among the institutions that Ryan Beck follows with offices along the Gulf Coast.
For now, reductions in loan loss provisions are also helping the bottom line. Coffee Talk wonders what will happen with all of those interest-only loans, if long bond rates finally do go up and housing prices moderate or even fall in response.
A wider look at the industry's 2004 performance by Weiss Ratings Inc. saw earnings growth slow considerably.
Profits grew a collective 20% in 2002 and 15% in 2003 for American banks and thrifts. Last year, however, profits were only up 1.8%, according to Weiss.
J.P. Morgan Chase Bank and Washington Mutual Bank were among the biggest decliners, with profit drops of 58% and 31%, respectively.
Weiss, a research firm in Jupiter, attributed the overall falloff to declines in fee income and realized capital gains.
Weiss agrees with Ryan Beck that asset growth is what would see the industry through some potentially tough times ahead.
"Margins will continue to be squeezed as interest rates rise," Weiss Vice President Melissa Gannon says in a news release. "Fortunately, loan portfolios also continue to improve putting the industry in a good position to manage the rise in interest rates."
Lessons from home
Ian Black, president of Sarasota's Ian Black Real Estate, took off a few days last week to reconnect with some of his friends back home. Home in this case is Belfast, Ireland, and the event was the 25th anniversary of the Golden Oldies Rugby Team's America tour in the early '80s.
"Everybody was in their 30s back then, so we realized it might be nice to get together before the 50th anniversary," Black says. "It was tremendous. I got to see old friends I knew from my old business life."
In the '60s and '70s, Black helped the real estate firm of Brian Morton and Co. grow from one office in Belfast to 22 throughout Northern Ireland.
Black says that Belfast is in the midst of an incredible real estate and economic resurgence, including a 40-story condominium complex on the banks of the River Lagan. As for what Sarasota could emulate from Belfast, Black says it would have to be the way government deals with low-income and affordable housing.
"Everyone has a home there," Black says. "Just like everywhere, there are some slum areas, ... (but) in the '60s they had a terrible housing problem not unlike what is happening at Janie Poe. It is really amazing the way the government and private sector work together over there."
Looking for jurists
The Review's 2005 Top Entrepreneur Patrick Neal, chairman of the Judicial Nominating Commission for 12th Judicial Circuit, is looking for applicants to fill a newly created judgeship for Manatee County. The position was just created by state legislators, and applications for the post are due by June 30.
Potential judges should anticipating filling out a very exacting 21-page application that covers everything from past medical and psychological conditions to potential biases and finances.
Interested candidates can download the application at the Web site www.flabar.org under the heading Forms & Applications. Completed applications should be e-mailed to [email protected] or mailed to: Patrick K. Neal, c/o Neal Communities, 8210 Lakewood Ranch Blvd., Bradenton, Fla. 34202.
The first application review meeting will be held on July 6.
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