Monday, October 31, 2016 • Financial News & Daily Record • Page A-7
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CONTINUED FROM FRONT PAGE As the Daily Record reported, Atlantic Coast Financial wants to convert the bank to a state charter to gain more direct access to its primary regulator. A federally chartered bank has to deal with more layers of regulators. Atlantic Coast Financial did not say when the conversion will take effect. Third-quarter earnings were a penny below the forecast of the one analyst who follows the company, Bob Ramsey of FBR & Co. In a research note, Ramsey said the earnings miss was due to lower-than-expected fee income from a program to make loans guaranteed by the U.S. Department of Agriculture and the Small Business Administration. However, Ramsey maintains an “outperform” rating on Atlantic Coast Financial’s stock. “The quarter exhibited other strengths, like robust revenue and EPS growth, a significant increase in deposits and improved interest rate positioning,” he said.
FirstAtlantic also increases earnings
FirstAtlantic Financial Holdings also reported third-quarter earnings rose by one penny, to 15 cents a share. The parent company of FirstAtlantic Bank said its ratio of nonperforming assets to total assets was 0.35 percent as of Sept. 30, down from 0.81 percent a year earlier. Jacksonville-based FirstAtlantic is one of the few banks that was not burdened with bad loans from the credit crisis for a simple reason: the bank didn’t open its doors until 2007. When the banking crisis hit, FirstAtlantic didn’t have those legacy loans to worry about, so it has maintained a relatively small level of bad loans.
Deutsche Bank has surprising profit
After weeks of negative news, Deutsche Bank last week reported a surprising third-quarter net profit of 278 million euros (about $303 million). Many analysts have been speculating about the Germany-based bank’s future as it wrestles with several regulatory and financial issues, including a potential $14 billion fine by the U.S. Department of Justice to settle charges of wrongdoing in the issuance of mortgage-backed securities from 2005-07. Deutsche Bank, which employs 1,800 people in Jacksonville, is hoping to negotiate a settlement at a much lower fine with the Justice Department. The third-quarter results “demonstrate well the strengths of our operating businesses,” CEO John Cryan said in a news release. “We continued to make good progress on restructuring the bank. However, in the past several weeks these positive developments were overshadowed by the attention around our negotiations concerning the residential mortgage-backed securities matter in the United States,” he said. “This had an unsettling effect. The bank is working hard on achieving a resolution of this issue as soon as possible,” Cryan said.
Underwriters take more Advanced Disposal services shares
Advanced Disposal Services Inc. last week said the underwriters for its initial public offering exercised their option to purchase about 2.9 million additional shares of stock.
That brings the total shares sold in the company’s IPO to about 22.1 million at $18 each. The Ponte Vedra-based waste management services company expects additional net proceeds of about $49 million by selling the extra shares, which will bring total net proceeds from the IPO to about $374 million. Advanced Disposal plans to use the proceeds to pay off debt. The company’s stock has been trading above the initial price since the Oct. 5 IPO. The market price has stayed close to the $20 level.
Dick’s Wings owner changing strategy
ARC Group Inc., franchisor of the Dick’s Wings restaurant chain, is altering its corporate strategy. The company has been exclusively a franchisor for the 24 restaurants in the Dick’s Wings chain, but ARC Group last week said it agreed to acquire two of the franchised restaurants in Argyle Village in Jacksonville and in the Nocatee development in Ponte Vedra. In a news release, ARC Group CEO Richard Akam said the franchisor approach has served the company well and enabled it to grow without requiring large amounts of capital. However, now it is looking at opportunities to own some of its more profitable locations. “We believe that a healthy mix of company-owned and franchised restaurants will provide us with more flexibility and financial stability as we continue to grow our brand,” Akam said. The Argyle Village restaurant is the largest Dick’s Wings, with 6,700 square feet and seating for 200. The Nocatee location
opened in 2013 and became one of its highest-grossing locations, the company said. ARC Group is paying $250,000 plus part of future earnings for each of the two locations. The company is officially headquartered in Louisiana but its corporate office is in Jacksonville.
Equity One expanding Pablo Plaza center
Equity One Inc. is already putting $18 million into the renovation of the Pablo Plaza shopping center in Jacksonville Beach and as the company reported its third-quarter earnings last week, it announced an additional expansion of the center. Equity One said it will buy an outparcel adjacent to the 149,255-square-foot center for $2.6 million and will close that deal next month. It did not say what the plans are for that property. The renovation has already included 16,400 square feet of construction to add a PetSmart store plus an outparcel with a Chipotle restaurant, both of which will open by the end of this year. The biggest splash will come from the opening of a Whole Foods grocery anchor in 2019, replacing the current Office Depot store. Equity One’s marketing brochure for Pablo Plaza also says it is adding two restaurant chains that have recently moved into the Jacksonville market, Another Broken Egg and Pieology.
Sunteck merging with Dallas company
Jacksonville-based Sunteck Transport Group last week announced a merger agreement with Dallas-based TTS LLC to form a trucking and logistics company called Sunteck/TTS Holdings LLC. Terms of the deal were not announced, but the companies said the merged business will have close to $1 billion in annual revenue.
Sunteck CEO Ken Forster will become president and CEO of the merged company, which will be headquartered in Jacksonville.
Northrop Grumman stock hits record high
Northrop Grumman Corp.’s stock rose to a record high Wednesday after a better-thanexpected earnings report and forecast. The aerospace and defense contractor’s earnings, excluding special items, of $2.92 a share in the third quarter were 17 cents higher than the third quarter of 2015 and 11 cents higher than the average analysts’ forecast, according to Yahoo Finance. Northrop, which employs more than 1,000 at its St. Augustine aerospace facility, also increased its full-year earnings forecast from a range of $10.75 to $11 to $11.55 to $11.75 per share. The company’s stock rose as much as $9.92 to $229.45 Wednesday after the earnings report.
McKesson Corp. earnings drop
McKesson Corp. on Thursday reported adjusted earnings of $2.94 a share for the second quarter ended Sept. 30, down from $3.17 the previous year. The San Francisco-based health care services company, which acquired Jacksonville-based PSS World Medical Inc. three years ago, also lowered its forecast for the full fiscal year. After previously projecting earnings of $13.43 to $13.93 a share, it is now expecting $12.35 to $12.85. McKesson CEO John Hammergren said in a news release the lower outlook resulted from customer pricing activities and moderating prices for branded pharmaceutical products. “Though we responded quickly to maintain market share and mitigate these pricing challenges, we recognize the near-term impact requires a revision to our outlook,” he said. mbasch@baileypub.com
FSU bumps up Thrasher’s compensation by 17.8% By The News Service of Florida The Florida State University Board of Trustees on Friday unanimously increased President John Thrasher’s compensation by 17.8 percent, after giving him a positive job review for his efforts leading the university. Thrasher’s base pay will increase 10 percent from $473,827 to $521,210. He additionally will receive $130,302 in deferred compensation and a $100,000 performance bonus, which was the maximum allowable under his contract. With a $10,800 vehicle allowance, Thrasher’s total compensation for the 2016-17 academic year will be $762,312, up from $647,304 last year. The trustees also voted to
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remove the bonus cap from Thrasher’s contract, meaning he could earn more or less than $100,000 in bonus payments in future years. The increase would make him the sixth-highest paid president among Florida’s 12 university leaders based on the 2015-16 salaries, with many presidents, like Thrasher, now undergoing job reviews and pay adjustments. University of Florida President Kent Fuchs was the top earner last year, with a compensation package of about $1.2 million. A former state House speaker who took over the presidency of his alma mater in November 2014, Thrasher helped FSU increase its “pre-eminence” funding from $25 million to $35 million in the new state budget.