JOHN HIELSCHER: Sunshine State economy poised for long run

Dated: 06/12/2019

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Economic growth in Florida has continued to outpace the nation so far this year and has evolved to enhance long-run competitiveness, according to economists at Wells Fargo Securities.

The Florida economy keeps chugging along.

Economic growth in the state has continued to outpace the nation so far this year and has evolved to enhance long-run competitiveness, according to economists at Wells Fargo Securities.

“Its strong performance is particularly noteworthy given the severity of the Great Recession in Florida and the considerable adversity the state has faced from devastating hurricanes, citrus greening, constant trade uncertainty and slower global economic growth,” said senior economist Mark Vitner.

“We expect economic growth to moderate this year, as the national economy slows. Florida is poised to remain one of the nation’s fastest-growing states, however, and growth remains remarkably broad-based across industries and geographies,” he said.

Average hourly wages have climbed 2.8% over the year. Tourism “barely missed a beat” despite a string of hurricanes the past two years. Construction has remained steady, and the housing market has returned to form.

“While moving in the right direction, home sales weakened late last year when mortgage rates spiked,” the economist said. “With sales moderating, homes are sitting on the market slightly longer, which is giving buyers a little more bargaining power.

“As a result, home prices have cooled, rising 4.6% year-over-year in March, which stands in contrast to the 6.2% rate hit this time last year. Price appreciation has moderated in both higher-priced markets, like Naples and Sarasota, and lower-priced areas, like The Villages, Ocala and Cape Coral.”

Among notable construction projects in the state is the $1 billion Sunseeker Resort going up along Charlotte Harbor in Port Charlotte by Allegiant Airlines, which serves both the Punta Gorda and Sarasota-Bradenton International airports.

“The resort marks a bit of a shift for Charlotte County, which has long housed a large and growing retiree population, as well as workers commuting into Fort Myers for the lower housing costs,” Vitner said.

Well, it was bound to happen some time.

After a 17-month streak without a bank failure, a small Texas bank was shut down on May 31.

The one-office Enloe State Bank was seized by Texas banking regulators, and the Federal Deposit Insurance Corp. sold it to Legend Bank.

It became the first U.S. bank to collapse since Washington Federal Bank for Savings in Chicago on Dec. 15, 2017.

The failed Enloe appears to be costly for the FDIC. The Cooper, Texas-based lender had assets of $36.7 million and deposits of $31.3 million, of which just $500,000 exceeded the FDIC coverage limits. But the failure will cost the FDIC insurance fund about $27 million, and Legend is taking just $5.2 million of the dead bank’s assets.

Days earlier the FDIC had noted that its secret “problem list” was down to 59, the lowest number of weak lenders since early 2007. That list of troubled banks peaked at 888 in early 2011. Florida has not seen a bank failure in more than four years. Eleven lenders based in Sarasota, Manatee and Charlotte counties collapsed from 2008 through 2011.

This failure may have a little more drama than most. The bank was closed “due to insider abuse and fraud by former officers,” according to a statement from Texas Banking Commissioner Charles Cooper. A local fire department was dispatched to Enloe’s office on May 11, a Saturday night, to respond to a report of papers being lit on fire, which law enforcement officials deemed suspicious, according to news reports.

Contact John Hielscher at 361-4875, fax to 361-4880 or email john.hielscher@heraldtribune.com.

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