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Business Services Industry

Good news on the home front: lenders are likely to put deposit money to work in 2004 with an ongoing emphasis on mortgage lending, as residential real estate demand stays strong - Financial Services

South Florida CEO, Jan, 2004 by Mike Seemuth

Rising real estate values in Miami-Dade County translate to rising employment--not only in the construction industry, but also in the financial services sector. Miami-based TotalBank, for example, which has 13 offices and 250 employees spread around the county, plans to hire up to six additional loan officers in 2004--largely to keep up with demand for mortgage loans to buy or refinance housing.

"We still think that reconstruction and rebuilding, and new building of housing developments, is going to be strong," says Bill Heffernan, president and chief executive of Miami-based TotalBank. He also expects strong local demand in 2004 for smaller office/showroom properties and apartment buildings in the Miami area. "We feel pretty good about that market."

Local lending has been supported by solid deposit growth at the local branch offices of financial institutions. Deposits at the Miami-Dade offices of banks and savings associations insured by the FDIC (Federal Deposit Insurance Corp.) increased to $56.3 billion last June 30, up 9.7 percent from a year earlier, according to the FDIC. Bank of America was the leader in Miami-Dade with about $9.3 billion in deposits (or 16.5 percent market share), followed by Wachovia (with 12.8 percent market share), Citibank (7.7 percent), SunTrust (6.9 percent) and Ocean Bank (6.5 percent).

Deposits also rose at foreign bank agencies in Florida, which are mostly clustered in the Miami area. Foreign bank agency deposits totaled $14.9 billion Sept. 30, 2003, compared with $13.3 billion a year earlier, according to the Florida Division of Banking. As of mid-2003, the dominant player among state-licensed foreign bank agencies was United Kingdom-based Barclays Bank, with $8.4 billion of deposits (or 56 percent market share), followed by Banco Bilbao Vizcaya Argentaria (with 6.1 percent market share), Royal Bank of Canada (5.6 percent) and ABN-AMRO Bank N.V. (5 percent).

Like many other banks, Memphis, Tennessee-based Union Planters foresees a modest rise in interest rates in 2004 and continued investment in South Florida real estate, says Angel Medina, regional president in charge of the bank's Miami-Dade operations. Even as the US stock market began to rebound in 2003, "what we saw was people exiting the equities market and moving lots of funds into the real estate market," Medina says. "As long as interest rates remain reasonable, single-family housing demand is going to continue strong--but not at the hyperactive numbers we've seen in the last few years."

The largest financial institution based in Florida, BankUnited of Coral Gables, will celebrate its 20th year in business in 2004 with an ongoing emphasis on mortgage lending, which helped boost its bottom line in 2003. BankUnited earned net income of $39.1 million in its fiscal year ended Sept. 30, 2003, up 29 percent from its net income in the previous fiscal year.

"BankUnited's pipeline for mortgage loans is expected to remain relatively strong, although down somewhat from peak periods," says Ramiro Ortiz, Bank United president and CEO. "Our commercial lending areas are making a transition from large corporate participations to an emphasis on middle-market commercial relationships that are more stable."

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The year 2004 also may usher in greater business investment, especially in the high-tech arena, by banks and investment firms trying to personalize their services. For example, New York-based investment firm Merrill Lynch is preparing to deploy new workstations that will provide branch office staff with key-stroke access to in-depth financial information about clients, plus new software tools to match their needs with the right investments. "We're thinking it will be rolled out in the first quarter of 2004," says Carlos Torre, sales manager of the Merrill Lynch office in Coral Gables.

On the regulatory front, complying with the anti-money-laundering regulations that sprang from the Patriot Act of 2001 was a top regulatory priority of local financial institutions in 2003, and probably will remain so in 2004. The law has led many bankers to take extra steps to verify the identity of their customers, triggering dramatic changes.

Asked if the Patriot Act intensified security procedures for opening a bank account, Anne Alexander, executive vice president and Florida wealth management director of Wachovia, says simply, "I think that would be an understatement."

Financial Services in Miami-Dade: Jobs, Companies, Wages
(includes banking, securities, insurance and trust funds)

Year    No. Businesses  Employment  Average Salary

2001    3,888           43,167      $58,013
2002    4,173           44,422      $60,932
2003 *  4,191           46,000      $63,000

Source: Florida Agency for Workforce Innovation ES202 Reports, Beacon
Council

* Estimated from first quarter 2003 data

Total Deposits, Miami-Dade County

As of June  Deposits
            ($ billions)

2000           40.54
2001           45.06
2002           51.29
2003           56.26

Source: FDIC, county summaries, market share report for Florida

Business Services Industry

Good news on the home front: lenders are likely to put deposit money to work in 2004 with an ongoing emphasis on mortgage lending, as residential real estate demand stays strong - Financial Services

South Florida CEO, Jan, 2004 by Mike Seemuth

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