The Best 3: More banks under stress, Citizens rates escalate, and a $100 million club?
Wake up and good morning. I've scanned Friday's news and want to share my three favorite business stories that touch on Florida and tell us something extra about our trying-to-recover economy. Let's get to it.
No. 1: The Sarasota-Bradenton area just can't seem to stop hemorrhaging troubled banks. After regulators closed Bradenton's Horizon Bank earlier this month, they are now pressing Sarasota's LandMark Bank of Florida with a 90-day deadline to raise fresh capital or find a buyer. It may be problematic. Raising fresh capital when a bank is already under the thumb of regulators is extremely hard to do. So is finding a buyer. Once regulators close a bank they sell it off anyway for pennies on the dollar. But what distinguishes this Sarasota Herald Tribune story is the fact that LandMark got itself mired in the muck because of a loan tied to Sarasota Ponzi scheme meister Art Nadel (now in jail, photo, right).
As the story states: "The bank is owed $2 million by Christopher Moody, who with his father Neil were partners of admitted Ponzi schemer Arthur Nadel. Moody pledged stock and promissory notes as collateral for a loan LandMark made less than two weeks after the Nadel-Moody hedge funds collapsed. That collateral has been seized for the Nadel receivership." Here is the complete story.
No. 2: Many Florida newspapers report that most customers of the state-run Citizens Property Insurance (Florida's largest property insurer) will see their rates increase by an average 10 percent next year -- despite the remarkable absence of hurricanes hitting Florida for years. Insurance Commissioner Kevin McCarty (photo, below left) approved dozens of rate hikes since early last year because he said many companies reported premiums aren't keeping pace with costs due to a rise in sinkhole claims and other claims not related to hurricanes.
The state's flip-flopped for years on what rates to set for Citizens, though none of them have been enough based on the analyses of insurance actuaries. Here's the kicker, though. Rick Scott, who's running for governor, says he wants to attract more private insurance companies back into the state to sell property coverage. But the only way that will happen is for Citizens' rates to rise sharply, allowing private companies to price their own policies without the disruption of cheaper Citizens coverage. Here are stories on Citizens' latest rate hike plans from the St. Petersburg Times, Orlando Sentineland Palm Beach Post.
No. 3: Could Hillsborough County be the catalyst of the $100 Million Club for public school systems? Last year, the Bill & Melinda Gates Foundation announced a stunning $100 million in education grants to the county's school system. Now comes a $100 million stock donation that Facebook founder Mark Zuckerberg is expected to announce today on Oprah Winfrey's show. Now that would be a dazzling trend of Pay It Forward for this country. And it started here. Check out this AP story.
-- Robert Trigaux, Times Business Columnist