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Coffee Talk (Tampa edition)
Analyst: Dump BankAtlantic
Florida's most convenient bank is heading for a fall.
So says Richard X. Bove, a St. Petersburg-based banking analyst for the Hoefer & Arnett Inc. brokerage.
BankAtlantic Bancorp's community bank headquartered in Fort Lauderdale, with branches extending north into the Tampa Bay area, will be facing more intense super-sized competition down yonder. Bank of America plans a renewed marketing push in South Florida. Bove predicts mega-bank rival Wachovia will try to match B of A's drive for new deposits.
That leaves BankAtlantic, which maintains lobby hours seven days a week, in a defensive posture. With sizeable overhead, BankAtlantic is likely to feel deposits shrink over the next year in its most important Florida market. Dwindling mortgage refinancing and weaker automobile lending won't help.
"With these negatives facing the company, it is difficult for us to understand how it can perform well," says Bove.
On top of all this, there is the lost revenue from real estate development subsidiary Levitt Corp., which BankAtlantic spun off Dec. 31. In 2004, BankAtlantic will miss the $22 million that Bove estimates the unit will contribute to this year's bottom line.
Bove has lowered his recommendation on BankAtlantic stock from "neutral" to "reduce," along with cutting his 2004 earnings forecast from $1.19 to 92 cents a share.
Rumor Control
The media feeding frenzy over the Terri Schiavo story nearly spun out of control in early January on a rumor the 6th Judicial Circuit removed Judge W. Douglas Baird as the presiding judge of the comatose woman's guardianship case.
It appears the rumor started at www.terrisfight.org, the Web site maintained by her parents, Bob and Mary Schindler. It set off a wave of print and TV media inquiries, though it appears responsible journalism practices quickly quashed the unfounded claim.
Late last year, Baird became involved in the contentious legal battle between Terri Schiavo's parents, who argue for her rehabilitation, and her husband, Michael Schiavo, who wants to discontinue her tube feedings. The battle escalated last year when Gov. Jeb Bush and the state Legislature intervened after Pinellas-Pasco Circuit Judge George Greer gave Michael Schiavo the OK to remove the feeding tube. Contrary to the Schindlers' wishes, Baird remains the presiding judge even though Chief Judge David Demers - through routine annual judicial assignments - transferred Baird to criminal court from the civil division. (Baird, a longtime veteran of the court, was previously a criminal court judge.) Demers retained Baird because of the complexities involved in this long legal battle.
Early Inklings
The ravenous appetite of the government's public-takings machine emerged subtly during the Jan. 5 Senate Comprehensive Planning Committee.
Committee Chair Steve Geller, D-Hallandale Beach, introduced a seemingly innocuous interim report labeled, "Nuisance Abatement" (04-122). It advocates legislation that would allow law enforcement to seize control of commercial or residential property used in the commission of a crime.
On the surface, sources tell GCBR, the proposal targets real social problems such as drug trafficking, prostitution and other illegal activity. However, the report raises serious questions for the commercial real estate industry. In instances of white collar crime, for instance, would such legislation allow law enforcement to seize an entire office building? In urban redevelopment projects, how would such legislation affect the developer who accumulates property but is unaware that one or more sites contain illicit activity?
While the committee took no action, Geller rescheduled debate on the report for later this month.
Eight to Five
Lindell Investments Inc., as in Carl Lindell, is one of five finalists in the running to develop a project at Palm and Cocoanut avenues in downtown Sarasota. City officials eliminated three developers. Proposals still under consideration: Plaza Verdi (Ersa Grae Corp., Kraft Construction Co. Inc. and The ADP Group Inc.); The Palm (Southcoast Partners Inc. and LB Jax Development LLC); Palm Avenue Galleria (Lindell Investments Inc. and PatrinelyGroup LLC); Arcadia Land Co.'s unnamed redevelopment plan; and La Scala (Benderson Development Co. and Sarasota Commercial Management Inc.).
Proposals by Trammell Crow Residential/JEBCO Ventures Inc., Opus South Corp./Rocco Santomenno and Wanda DiPaolo were eliminated. The finalists will be interviewed and more will be eliminated on Jan. 30.
Surprise! Healthy HMOs
America's much-maligned health maintenance organizations - maligned mainly by their customers, not their stockholders - are enjoying very hearty bottom lines.
HMOs reported an 81% spike in profits for 2002, according to a report recently issued by Weiss Ratings Inc., a Florida-based service that analyzes the financial services industry. This probably doesn't come as news to business owners, who have been forced to shift some of the burden of rising medical insurance premiums onto employees - in order to keep their own companies in the black. "Profitability continues to improve as insurers raise premiums and restructure policies to reduce costs," says Melissa Gannon, a Weiss vice president. "While this bodes well for the industry's overall health, rising premiums have forced many consumers to select more restrictive health plans or opt not to purchase insurance entirely."
Florida HMOs reported aggregate net income of $138 million. That represented 2.5% of the industry's entire nationwide profits. Idaho and Montana were excluded because they didn't report 2002 financial results for their health insurers.
The strongest HMOs in the Sunshine State, according to Weiss, are Jacksonville-based Health Options Inc., which reported 2002 net income of $100 million, and Healthy Palm Beaches Inc. The West Palm Beach-based nonprofit reported a surplus of $124,000 for 2002.
The five weakest HMOs in Florida, by the reckoning of Weiss, include Tampa-based Healthease of Florida Inc., which was licensed by the state in 1997.
At least Healthease reported a 2002 profit of $568,000, although that was a 90% decline over 2001. The other four supposed Weiss weaklings - AvMed Inc., Vista HealthPlan Inc. and Vista HealthPlan of South Florida Inc., and CarePlus Health Plans Inc. - all lost money for the year.
They aren't likely to find much sympathy from employers struggling to meet double-digit premium increases.
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