December 2019 - Caldwell Trust Newsletter

December 2019 Newsletter I Volume LVI

INVESTMENT LETTER 2020 Vision

THE FUTURE

Caldwell implements plans for next 25 years

PROFILE

Lee Thacker shares his vast experience and Wendy Fishman accepts Director of Sales role

CALDWELL CARES

Black-Tie & Blue Jeans, An Equestrian Gala

INVESTMENT LETTER

2020 Vision

By J. Chris McGee, CFA, CAIA

In a word the outlook for next year is “blurry�. We focus on fundamentals, and the projections for corporate earnings, the economy, and monetary policy are decent for 2020 but not great. Non-market issues will largely determine the tone of domestic capital markets next year. These issues include the ongoing trade talks with China, Britain’s exit from the European Union, and the presidential election.

As we move towards Q4 earnings releases, S&P 500 earnings are expected to once again be slightly negative on a year-over-year basis. In aggregate, 2019 earnings growth will be flat. Currently, S&P 500 earnings per share for next year are expected to grow in the high single digits. Typically, initial forecasts are revised downward as evidenced by what looks to happen in 2019. Initial estimates of growth in earnings per share were around 10% but will essentially come in flat. In addition to the typical optimism in the forecast, trade tensions prompted corporations to continually revise estimates lower during the course of the year.

We currently estimate earnings growth of around 5% for next year. Earnings growth has once again plateaued domestically. S&P 500 earnings per share came in at around $119 for 2014, 2015, and 2016.

Earnings per share then jumped to about $134 in 2017 and $161 last year (due in part to the impacts of tax reform). As noted, S&P earnings per share will be flat this year at around $162. Growth of 5% in 2020 puts S&P 500 earnings per share right around $170. That puts the current forward Price Earnings Ratio (P/E) at around 18X which is high in comparison to recent history but by no means stretched, especially given the low-interest-rate environment.

Economic growth both globally and domestically has been slowing. Based on a recent forecast by the Federal Open Market Committee, domestic GDP growth will be 2.2% for 2019 and 2% in 2020. Their forecast for 2021 has GDP growth slowing further to 1.9%. The recent peak in domestic GDP growth was 3% in 2018.

International Monetary Fund (IMF) forecasts have been revised downward continually for global growth over the past couple of years and currently stand at around 3% for next year. Domestically, the biggest headwind to economic growth is currently trade tensions with China. Major corporations are hesitant to make capital expenditures in such an uncertain environment.

As this is written, it appears that the Trump administration will strike a preliminary deal with China and continue negotiations for yet further agreements. Given how negotiations have played out thus far, we will believe a deal when we see one. In the meantime the uncertainty around a comprehensive agreement will be a headwind to corporate investment and market sentiment.

The most positive fundamental consideration currently, in our view, is very accommodative monetary policy domestically, and generally dovish central bank policy globally. The specter of a pickup in domestic inflation is virtually non-existent. Unemployment continues to run near 50-year lows. After three rate cuts this year of one-quarter point each, the Federal Reserve has adopted a wait-and-see. That said, global interest rates are at historically low levels, which will continue to place a lid on rates domestically. If global interest rates move higher expect domestic ratesto follow.

THE FUTURE

Caldwell implements plans for next 25 years

PROFILE

H. Lee Thacker Jr. shares his vast experience Caldwell Trust Company celebrated its 25th anniversary and reached its billion-dollar milestone almost simultaneously last year. CEO/president R. G. “Kelly” Caldwell Jr. and staff members marked the occasion with a reorganization into four business segments, each led by a senior staff member, to carry the company through its next 25 years and second billion dollars. We began a series in August to profile the four members of the corporate leadership team, beginning with Jan Miller, the senior EVP and trust officer overseeing Client Services. In October, we wrote about Scott Antritt, senior VP in charge of Change Management.

In this issue we present senior EVP, secretary, and trust officer H. Lee Thacker Jr., who supervises Corporate matters. We’ll finish the series in February with a profile of Leonard B. Nagel, senior VP and chief technology officer, who administers Support (operations and information technology).

After completing a significant career in banking, H. Lee Thacker Jr., CFP, decided to retire to Florida along with wife Suzanne, also retiring from a banking career. At least they thought they were retiring. As they got settled in Venice, they sought banking resources here. He was intrigued by an article in the April 11, 1996 issue of the Sarasota Herald-Tribune titled “The House Roland Built: Caldwell Trust Family Grows Up.” The cover story related the origin and growth of the new, independent trust company. Lee decided to meet Roland Caldwell, co-founder with his son R. G. “Kelly” Caldwell Jr., of Caldwell Trust Company. Suddenly retirement was over.

Well, maybe not so suddenly. Roland assigned several tasks to both Lee and Suzanne, who came on board as part-time consultants. By April 1997, both were full-time employees of Caldwell Trust Company. Lee also works for Trust Companies of America, the parent of Caldwell Trust Company and several other entities. Over the intervening 22 years, Lee has worked with Roland, Kelly, and other founders and board members to shape what was then a fledgling business.

Lee’s titles reflect his responsibilities: senior executive vice president, corporate secretary, and trust officer. His vast experience before and since joining Caldwell has made him the perfect person to manage the company’s Corporate business segment. In that capacity, he oversees accounting and budgeting, and compliance with state and national financial regulatory requirements. He also serves on the investment committee, trust commitee, security committee, and the boards of directors of Trust Companies of America and Caldwell Trust Company. In addition, he still works as a trust officer, administering his client accounts.

Peace of Mind 25 Years One Billion in Assets Your Family. Your Future. Your Legacy.

ctrust.com | 941.493.3600 Sarasota | 1561 Main Street, 34236 Venice | 1400 Center Road, 34292

Life isn’t all work, nor does age slow Lee, who turns 86 on December 30. He and Suzanne toured South Italy and Greece in July. They’ve also planned major festivities for their extended family, which comprises two children, five grandchildren, and eight great-grandchildren. “About 15 years ago, we started a family tradition,” Lee said. “We all go to a resort in Georgia for the last weekend of the year. When we started, we needed rooms for ten people. This year we had to rent a compound that will handle 24. It might be just big enough.”

And it might be just an amazing birthday! Happy Birthday, Lee!

To contact Lee Thacker, email thacker@ctrust.com or call 941.493.3600.

PROFILE

Wendy Fishman accepts Director of Sales role Wendy L. Fishman, CTFA, will be serving as director of sales, working as a senior member of the Client Services business segment with executive vice president and trust officer Jan Miller. “Despite the additional duties, Wendy will also continue to serve as a trust officer, taking care of her clients as she does so well,” Jan Miller said.

“Wendy’s new role is part of the structure we’re putting in place as we grow,” Jan said. “Because of her extensive networking capabilities and her outstanding reputation in the community, she’s the ideal person to help us build the future leaders of the community.”

An executive vice president and senior trust officer with more than three decades of experience, Wendy has been with Caldwell since 2007. “She has a very strong fiduciary background as well as valuable skills in administration, client relationships and management,” Jan said.

In addition to her work as a trust officer, Wendy has been Caldwell’s community liaison in Venice for many years, providing advice to nonprofits and other businesses. Through this activity she has built strong relationships with decision-makers, who then become referral sources to Caldwell for new business.

As director of sales she will share her experiences in relationship-building with other Caldwell trust officers, mentoring and coaching them according to their needs. “I’m so pleased with this opportunity,” Wendy said. “I really enjoy all aspects of the work I do. I look forward to sharing my knowledge and experience with my colleagues here at Caldwell.”

To contact Wendy, email wendy@ctrust.com or call 941.493.3600.

CALDWELL CARES

Black-Tie & Blue Jeans, An Equestrian Gala Shining a bright light during a cool November night onto the role horses play in physical and behavioral therapies for men, women and children facing a variety of challenges, InStride Therapy hosted the annual signature Black Tie & Blue Jeans, An Equestrian Gala on its beautiful 62-acre Nokomis equestrian center. The event transformed the sand-covered riding arena into a rustic yet elegant extravaganza, raising awareness as well as more than $100,000 for therapeutic services.

Attendees were treated to specialty-crafted cocktails, a classic Chef Paul Mattison-catered dinner as well as line dancing lessons, S’mores and auctions. Bronson Arroyo, former Boston Red Sox World Series pitcher, provided the evening’s musical entertainment.

“I am so proud to have been a part of bringing the much-deserved attention to this essential programming for people who live every day with special needs,” said Sheryl Vieira, event chair and Vice President of Marketing and Public Relations at Caldwell Trust Company. “Our turn out was electrifying, and we look forward to building on that momentum at our 2020 event, which will be hosted on Saturday, November 14.”

“Horses bring healing,” is the InStride Therapy which utilizes horses to challenge individuals of all abilities to reach their fullest potential. Partnering with Easterseals Southwest Florida therapists, InStride ensures their clients receive the highest quality of care.

CHARTERED PRIVATE TRUSTEE PROUDLY SERVING OUR COMMUNITY SINCE 1993

Board of Directors

Contacts

R. G. “Kelly” Caldwell Jr., CEO, Chair

Scott Antritt, scott@ctrust.com

John S. Booth, III

Alan H. Blair, alan@ctrust.com

Christopher N. Gray

Tony Blasini, tblasini@ctrust.com

Tramm Hudson

R. G. “Kelly” Caldwell Jr., kelly@ctrust.com

MaryAnn C. Kraut

Kimberly Evener, kevener@ctrust.com

Marge Maisto

Reppard Gordon, rgordon@ctrust.com

J. Mack Reid

Gina B. Jordan, gjordan@ctrust.com

Thomas Stuhley

Sonya Kristie, sonya@ctrust.com

H. Lee Thacker Jr.

Wendy Fishman, wendy@ctrust.com

Kathleen Toale

Chris McGee, cmcgee@ctrust.com

James R. Woods

Jan Miller, jan@ctrust.com Leonard Nagel, leonard@ctrust.com Sandra L. Pepper, sandy@ctrust.com Marci Sweat, msweat@ctrust.com H. Lee Thacker Jr., thacker@ctrust.com Sheryl Vieira, sheryl@ctrust.com

Venice Office: 1400 Center Road, Venice, FL 34292 941.493.3600 • Toll Free: 800.338.9476 • Fax 941.496.4660

Sarasota Office: 1561 Main Street, Sarasota, FL 34236 941.926.9336 • Toll Free: 877.926.9336 • Fax 941.926.9335

www.ctrust.com • info@ctrust.com

A LEGACY OF STABILITY