This week's items: The banks with the six largest deposit slices in Florida generally met earnings forecasts. Fred Karl, Tampa city attorney, is ready to move on State House Speaker Johnnie Byrd, R-Plant City, offered some encouraging words
Coffee Talk (Tampa edition)
Up in the thin air
Coffee Talk has a soft spot for community and regional banks. Occasionally, though, we like to check up on the big guys. You know, the mega-banks that do business in the stratospheric billions of dollars. With 2003 year-end results in, we thought this would be as good a time.
The banks with the six largest deposit slices in Florida generally met earnings forecasts. But Richard X. Bove, a St. Petersburg bank analyst for Hoefer & Arnett Inc., is worried about the immediate future for two of them, AmSouth and Washington Mutual.
AmSouth could get stuck with the crumbs as even bigger fellow giants like Bank of America, Wachovia and Washington Mutual scramble to woo Florida customers with lower prices and extended business hours, according to Bove.
Bove was troubled by some opportune accounting at Washington Mutual. After deciding to chuck a consumer finance unit, Washington Mutual released tens of millions of dollars from reserves while recording a loan-loss provision of $76 million. A quarter-over-quarter earnings increase was the pleasant result.
Investors should be wary of both bank stocks until the effects of the mad scramble in Florida and Washington Mutual's confusing bookkeeping become clearer.
B of A Chief Executive Ken Lewis is emphasizing improved customer service, as the three-quarters-of-a-trillion-dollar-asset gorilla continues to open a staggering number of new accounts.
Profits from Wachovia's corporate and investment banking doubled in 2003. Bove sees Wachovia emerging as a major securities underwriter during the next couple of years.
Most analysts are talking down SunTrust. Bove believes that's more of a lingering image problem than anything else. SunTrust got a little too cold and calculating, but he says it is trying to mend some fences.
SouthTrust is consolidating its commercial lending operation in SunTrust's backyard. The bank views Atlanta as Southeast's economic center. But SouthTrust is also opening larger branches in other boomtowns of the Sun Belt, including the Tampa Bay area.
The economies of scale enjoyed by these banks are daunting, but there should be places around here where a smart community banker can still make a buck.
Bank of America Corp.Charlotte$736.422.80%1.48%54.10%$7.13 20.14%
Wachovia Corp.Charlotte$400.813.60%1.10%69.80%$2.78 14.97%
SunTrust Banks Inc.Atlanta$124.814.10%1.09%61.00%$4.73 10.99%
Washington Mutual Inc.Seattle$275.2 16.60%1.19%65.50%$4.21 3.89%
SouthTrust Corp.Birmingham, Ala.$52.016.60%1.39%49.90%$2.06 3.82%
AmSouth Bancorp.Birmingham, Ala.$45.6 19.60%1.39%53.40%$1.77 2.47%
Source: Hoefer & Arnett Inc., Hovde Financial LLC
Time for change
It's apparent Fred Karl is ready to move on to his next big challenge or return to semi-retirement. The Tampa city attorney - and a former Florida Supreme Court justice - is just waiting for Mayor Pam Iorio to make a decision on his replacement. "I'm ready to step down anytime when she finds the right person," he says.
But that's the rub. Apparently Iorio is having a tough time finding the right lawyer. Karl says Iorio has met with a few people, but nothing came out of the interviews. "She has her very own ideas about who she wants," he says. "It will take some looking and some interviewing."
It's not that Iorio doesn't like some of the candidates, Karl adds. But there are a couple of problems. "This person has to live in the city," he says, and that excludes many fine Tampa lawyers who live in Pinellas or Pasco counties.
Then there is the $132,000 salary, which Karl says some consider a pittance. "So it narrows the field down to the independently wealthy, or the very dedicated, who live in the city or has the sense enough to do the job," he says.
What? Me worry?
State House Speaker Johnnie Byrd, R-Plant City, offered some encouraging words about state court funding during a recent meeting with 13th Circuit Chief Judge Manuel Menendez and Hillsborough County Administrator Pat Bean.
The three met to discuss state court system funding under Revision 7 to Article V of the state Constitution. The amendment voters approved in 1998 shifts funding responsibility to the Florida Legislature from the state's 67 county governments, beginning July 1.
"Speaker Byrd assured us he wanted a quality courts system in Florida," Menendez says. "He said not to worry, that the courts would be funded. We certainly hope the rest of the House and Senate feel the same way."
But Menendez has plenty to worry about, considering Gov. Jeb Bush proposed only $103 million in state courts funding for 2004-05. The state Supreme Court's Trial Court Budget Commission recommended $170 million.
That means Menendez probably won't get all of the four circuit judges and four county judges the Supreme Court has certified for the 13th Circuit. The appellate court has certified 88 total judges in Florida, but Bush proposed funding for only 40.
Menendez says it may be better to look at the funding in terms of a glass half full and not half empty. "There is one school of thought that half is better than none," he says. "That's true up to a point. We're grateful for what we got."
Pinellas-Pasco Circuit Judge Charles Weaver Cope last month resigned his seat on the bench. It seems the herculean efforts of Robert "Mad Dog" Merkle, who has since passed away from cancer, were for naught. Merkle saved Cope from ouster during a 2002 trial by the Florida Judicial Qualifications Commission.
The judge last year was reprimanded for his drunken behavior at a California judicial conference in 2001. During that tax-funded trip, he was accused of trying to break into the hotel room of a woman he'd recently met.
But it appears the state House Judiciary Committee wasn't going to let Cope off so easily. It planned to impeach the judge who last month filed a lawsuit in California against the two women who accused him of trying to force his way into his room.
Not all of Pinellas County's judges are unhappy about Cope's resignation. A few have been heard grumbling about the disrepute he brought their profession.