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Coffee Talk
+ Investment bank: TIB a likely buyout target
Is TIB Financial Corp. in play?
The Naples-based owner of TIB Bank recently appeared on a list of likely takeover targets put out by investment bank Keefe, Bruyette & Woods. TIB is the third largest publicly traded bank in Florida and was among 21 banks on Keefe, Bruyette's list.
TIB officials couldn't be reached, but company officials made no hint of a sale in a presentation to analysts at an investment bankers' conference Nov. 13. In fact, the presentation slides indicate the bank will continue its expansion to other areas of Southwest Florida.
Still, the bank's shares have fallen about 50% so far this year on news of lower earnings, according to data provided by Google Finance. In the most recent quarter ending Sept. 30, TIB Financial reported net income of $494,000 versus $2.4 million in the same quarter of 2006. The bank attributed the decline in part to higher provisions for loan losses as a result of slowing economic activity and continued softness in the residential real estate market.
Keefe, Bruyette says potential acquirers of TIB include Colonial BancGroup, Fifth Third, Whitney Holding and RBC Centura and estimated a buyer might pay $13 per share, a roughly 50% premium to the company's recent share price. "We see this as the best opportunity for the company to maximize shareholder value rather than waiting until at least 2009 for the Florida real estate markets to turn around," wrote Keefe, Bruyette analyst Samuel Caldwell.
+ Auction brings in deals, discounts
Sure, the real estate market isn't what it once was, but still, selling more than $100 million of luxury real estate in one setting in one day has to be considered a pretty good accomplishment - even if it was through an auction and the prices were major markdowns.
And even if nearly $100 million worth of property was left over.
"We're not sitting back and just waiting for the market to pick up," says Chad Roffers, president of Sarasota-based Sky Sotheby's International Realty, the listing firm behind the Nov. 16 auction held at the Longboat Key Club and Resort. "The traditional process of selling real estate is not as effective as it has traditionally been."
One tradition that was still in full force at the auction, the second one Sky Sotheby's held this year, is that of unbridled American capitalism. Buyers came from as far as England and a few other European countries, while one buyer phoned in his bid - a winning one - from Switzerland.
Properties for sale at the auction, pre-determined and screened by Sky Sotheby's staff, included existing homes, home sites and condos. Most were in Sarasota, but a few were in Pinellas and Hillsborough counties. In total, the auction listed 79 properties with a combined value of more than $200 million.
Specific sales awarded during the auction included a $14-million purchase of a Casey Key estate and a $6.1 million agreement for a 11,293-square-foot home on the Sarasota Bay in Osprey.
At least 1,000 people attended the auction, run by Sarasota-based Daniel DeCaro Real Estate Auctions.
The attendees included Mark Miller, head of Sarasota-based Westwater Construction. Miller was there as a seller, although after the event he conceded some deals were so good, he wished he was there as a buyer.
As it was, Miller sold six of 10 properties Westwater listed at the auction, albeit for about 60% less then his original asking price. His sales included a house on Bird Key and two lots in the Lake Club, a high-end community in Lakewood Ranch. Miller also now has deals pending on two other properties as a result of the auction.
"It didn't bring top dollar," Miller tells Coffee Talk, adding that he was hoping for closer to 70% of the full asking price. "But it took some things off our books."
Roffers previously said Sky Sotheby's will be doing more auctions, even if, or when, the market picks back up. The next one is scheduled for March.
+ Plan for compliance,
avoid the Feds
The image of federal agents descending on and investigating Wellcare in Tampa may have left a chilling effect on Gulf Coast health care businesses working with Medicaid and Medicare patients.
But there are ways for businesses to protect themselves by educating employees on federal rules, updating that education, documenting it and doing internal testing to make sure it is following the rules, says Travis Godwin, partner with the Ruden McClosky law firm in Tampa and a specialist in health care law.
"Health care companies need to pay someone to get educated on billing practices and Medicare and Medicaid and they need to get certificates of completion for the courses," says Godwin, 40, who has represented physicians, chemical companies and dentists.
Companies also need to have a written compliance program, which all staff must follow, he says. Internal surprise audits are helpful. Also, an anonymous hotline number is a good idea, so employees can call in what they think may be illegal activity.
Florida, with its large elderly population, sees a lot of Medicaid business. It is clear, Godwin says, that the federal government has made Medicaid and Medicare investigations a larger focus. The number of FBI agents focusing on health care investigations rose from 200 in 1992 to more than 500 today.
Why? Economics. For every dollar the federal government spends on an investigation, it recovers about $10 to $15. Plus, in many of the cases, the defending companies settle, saving the government money in potential future fraudulent activity and sometimes allowing the government to recover triple damages.
Healthcare businesses in Miami and southeast Florida have been a particularly popular target for federal investigators, Godwin says.
+ Newshound buyers
sell the dogs
Naples-based value investor Bruce Sherman is selling his stake in newspapers, recent securities filings show.
For years, Sherman and his firm, Private Capital Management, have argued that newspaper stocks were undervalued and investors would eventually recognize their worth. Sherman was a driving force in the sale of giant newspaper chain Knight Ridder to rival McClatchy in 2006.
But years of underperformance by newspaper companies have apparently driven Sherman to sell the dogs. Recent filings by PCM show the firm now owns reduced stakes in just three newspaper companies: Lee Enterprises, McClatchy and New York Times. The firm no longer holds any shares of Belo, Gannett, Media General or Tribune.
Meanwhile, assets under management in September have fallen 19% to $19.2 billion, down from $23.7 billion on Dec. 31, 2006, filings show. It's not clear how much of the decline is due to falling values or investor redemptions.
Private Capital in the past has posted its performance record on its Web site but doesn't do so any more. Officials with the firm couldn't be reached.
+ Seminole Hard Rock
reopens with additions
The Seminole Hard Rock Hotel & Casino in east Tampa celebrated the grand opening of its $120 million expansion, including a new second floor for the casino, the Fresh Harvest restaurant and a VIP lounge.
The expansion project added about 55,000 square feet of gaming space and 1,099 gaming machines. Now, 150,000 square feet of casino and restaurant space and 3,208 gaming machines will be available.
The Hard Rock had a soft opening of the expanded gaming portion on Sept. 27. That turned the Tampa casino into the state's largest gaming area.
The expansion is scheduled to be completed before Christmas, when a new parking garage for 1,250 cars is finished. That will raise total parking to 4,500 spaces.
GULF COAST
UNEMPLOYMENT RATE
Unemployment rate
County Oct. 2006 Oct. 2007
Hillsborough 3% 4.2%
Pinellas 3% 4.1%
Manatee 2.8% 4.2%
Sarasota 3% 4.9%
Charlotte 3.4% 6%
Lee 2.8% 5.3%
Collier 3.2% 5.1%
Florida 3.2% 4.3%
United States 4.1% 4.4%
Source: Florida Agency for Workforce Innovation
What the data shows: The unemployment rate in Gulf Coast counties has been rising over the past year as the real estate slowdown persists. The highest unemployment rate is in Charlotte County and the lowest is in Pinellas County. The southern counties on the Gulf Coast, which were most dependent on construction, have shown the biggest jump in unemployment.
What it means: Despite rising unemployment, the rates along the Gulf Coast are not considered high enough to impact the economy. After years of unusually tight labor markets, employers are finding new employees more easily. Supply and demand for labor are now more in balance.
Forecast: Economists aren't concerned about the unemployment rate until it starts heading above the 7% range, which most observers don't think will happen soon. Recent employer polls show hiring will continue in the months ahead.
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