Loading
Coffee Talk (Tampa edition)
Sell community banks
Punk Ziegel & Co. analyst Richard X. Bove is out with his latest take on the economy and how it will affect the business of banking.
Coffee Talk pays attention to what the Pinellas Park bank-stock researcher says about real estate, since that is the bread and butter of Gulf Coast banking.
Citing government data, Bove says Americans have made more money investing in real estate than stocks. For the year ended Sept. 30, that added $2.1 trillion to household wealth.
But sticker shock and rising mortgage rates are slowing home sales and Bove says the appearance of speculators signals the beginning of the end of the current round of rich real estate appreciation. Yet Bove downplays talk of a housing bubble that will be pricked by shelter pricing that outpaces personal income.
Yes, a recession is possible. With it, joblessness would cause more mortgage defaults by already overextended borrowers. But that's not going to happen next week.
"Any of these fears may be realized at some point but the current figures argue that this point is some time (years) off," Bove writes.
Bove is less sanguine about community banks, which have profited handsomely from mortgage lending during the current boom. Some have lowered their loan-loss reserves on the strength of local real estate markets, thereby boosting their bottom lines.
But Bove says the prudent banker builds loss provisions in good times, lest earnings slide faster when times turn bad.
Sell the stock of consumer-oriented banks, Bove tells his clients. That group is peaking. Plow the profits into the issues of larger banks that will benefit from growing demand for business loans, he says.
Second homes as investments
Marvin Rose of Rose Residential Reports read the report as did many who follow national real estate trends.
A National Association of Realtors' study last week points out that 23% - almost one in four - of all homes purchased in 2004 were for investments and 13% were vacation homes. In fact, the study says that there has been a surge in the sales of second homes, up 16.3% from 2.42 million in 2003 to 2.82 million homes in 2004.
"I was surprised, a lot surprised by that number - 23%," Rose says. "No question, there has been a significant rise but I am not sure it is 23%."
In some submarkets, he adds, a particular product type, such as downtown condos, definitely attracts a higher percent of investors, but still 23% seems too high. "I wouldn't be surprised if it was 10 to 15%," Rose points out.
Stating the obvious
Tampa lawyer Tim Corcoran has taken the unusual step of publicly stating the obvious about the current election for the 13th Circuit representative to the Florida Bar Board of Governors. The former bankruptcy judge declared unconditional support for Akerman Senterfitt attorney Bill Kalish in a letter to members of the Hillsborough County Bar Association.
It's not that Corcoran has anything against Kalish opponent Jeff Warren, president of Tampa's Bush Ross Gardner Warren & Rudy PA. "Both Bill Kalish and Jeff Warren are lawyers of outstanding professional quality," he writes. "I would be pleased to ask either to represent me or a member of my family in a sophisticated legal matter."
Corcoran doesn't think it's appropriate that Warren should succeed Jack Rudy on the board of governors. Rudy, a two-term governor, is Warren's law partner.
"It is bad precedent for law partners to succeed one another in important bar posts, such as the board of governors," Corcoran argues in the letter. "No law firm should 'own' a seat on the board."
Members of the Florida Bar have until March 21 to vote.
Silence not golden
Gold Bank has hit the publicity jackpot, thanks to a customer and a primetime national television show.
The bank's Tampa office announced March 8 it is providing $10,000 to the children of two victims of a deadly shooting at a Pinellas County electronics store last November.
Gold Bank, a unit of Kansas-based Gold Banc Corporation Inc., got the idea from a customer, Lexington Homes Inc.
The Tampa bay area homebuilder was selected by the producers of "Extreme Makeover: Home Edition" to construct a new house for the family of James Dolan, a Radio Shack employee who survived the shooting but is now blind. The new Seminole abode will let Dolan get around easier at home.
There probably won't be a dry eye in American living rooms when the "Extreme Makeover" episode featuring Dolan airs on the ABC network.
Gold Bank rushed out a news release to inform the public that it will pay additional cash to the children of Dolan and the late Ken Powell, who was shopping when the shooting started. Gold Bank Tampa President Charles Britton says his employer will match the first $5,000 that other donors kick in.
Gold Bank executives, in their haste to get the word out, thought the Community Foundation of Tampa Bay would handle the incoming donations. But, contrary to what was in the news release, the bank will accept the donations directly, without the foundation's involvement.
"Really, the thought is to get a lot of $5 and $10 and $20 donations," says Britton.
Those who want to give to what Britton calls the Heart of Gold Fund may inquire at any Gold Bank office.
Gone fishing
St. Petersburg attorney Greg Hoag needs boats. Lots of them, please. The Masterson Law Group lawyer would like to sponsor a fishing tournament as part of the St. Petersburg Bar Association's Law Week festivities, but he needs help. Hoag is chairman of the event.
If enough lawyers enter their boats, Hoag says, the committee might consider waving the entry fee for those who volunteer a boat in the tentatively planned May 7 in-shore tournament. All proceeds would go to the St. Petersburg Bar Foundation.
Interested boat owners should call either the association office at (727) 823-7474, John Mathias at (727) 896-2167 or Hoag at (727) 896-3641.
Your free article limit has been reached this month.
Subscribe now for unlimited digital access to our award-winning business news.
Join thousands of executives who rely on us for insights spanning Tampa Bay to Naples.
