Former Atlantic Coast Financial chairman launches proxy fight
The former chairman of Atlantic Coast Financial Corp., who resigned last year after disagreements with other board members, is launching a proxy fight to put three new nominees on the board of directors.
Jay Sidhu resigned as chairman of the Jacksonville-based banking company last April but remained on the board of directors.
In a Securities and Exchange Commission filing Friday, Sidhu and another board member, Bhanu Choudhrie, said they are proposing the new nominees to replace three incumbent board members who are up for re-election at the company's annual meeting.
Sidhu and Choudhrie together own 6.6 percent of Atlantic Coast Financial's stock.
The parent company of Atlantic Coast Bank has lost money in every year since 2008 and posted a net loss of $6.4 million in the first nine months of 2012.
In a letter to the board included in the SEC filing, Sidhu said the board has not taken action to improve the bank's operations, including steps suggested by Sidhu.
"To our amazement, the majority of the board has consistently failed to act to mitigate or significantly reduce the risks facing the corporation and follow prudent safety and sound banking practices, in spite of several plans put forward by some directors," the letter said.
"We continue to believe there are some very good, hardworking people at the company and we do not doubt the good intentions of all our fellow board members. However, we are running out of time and we need change," it said.
An Atlantic Coast Financial spokesman said the company had no comment on Sidhu's filing.
FIS 'upbeat' on analyst day
Fidelity National Information Services Inc. officials were generally "upbeat" during their Analyst Day presentation in New York last week, according to analysts who attended the meeting.
"We're certainly excited about the company and the company's future, and we certainly hope you feel the same way," said CEO Frank Martire at the meeting, which was broadcast over the Internet.
Several analysts seemed to share his optimism for the company, which provides technology services for financial institutions.
"The company hosted an upbeat analyst day, and indicated sales activity is robust," said Wayne Johnson of Raymond James & Associates in his report after the meeting.
"In our opinion, FIS remains an attractive investment opportunity generating significant free cash flow, expanding margins, and cash to shareholders through buybacks and dividends," Johnson said.
Before the meeting, Fidelity — better known as FIS — announced it is increasing its quarterly cash dividend from 20 cents to 22 cents per share.
The company also expressed optimism about growth at the meeting.
"FIS highlighted increasing demand for outsourcing services among financial institutions, and the company is well-positioned to capture increasing demand for outsourcing services," said a report by Deutsche Bank Securities analyst Brian Keane.
"We believe FIS has built a strong foundation that should drive consistent double-digit EPS growth through mid-single-digit organic revenue growth, operating leverage, share buybacks and/or debt pay-down," said a note by Sterne Agee & Leach analyst Greg Smith.
"In addition, we are attracted to FIS' highly recurring revenue, which should provide downside support if economic conditions weaken," he said.
While FIS was upbeat about the future, the company also on Tuesday announced fourth-quarter results that were slightly below analysts' expectations.
Adjusted earnings per share in the quarter rose by 3 cents to 68 cents, but that was a penny below the average forecast of analysts surveyed by Thomson Financial.
Revenue rose 2.7 percent to $1.5 billion, slightly below the average analysts' forecast of $1.51 billion.
FIS' stock fell $1.06 to $36.50 on Tuesday.
"We were surprised by the pullback today, given relatively solid 2013 guidance, a generally upbeat analyst day, and the reaffirmation of 2012-2015 financial targets," said Robert W. Baird analyst David Koning in a research report.
FIS is projecting annual organic revenue growth of 4 percent to 7 percent, with earnings per share growing by 12 percent to 15 percent a year through 2015.
The company said it expects adjusted earnings from continuing operations to increase from $2.50 a share in 2012 to between $2.77 and $2.87 this year.
"Some might have been disappointed by fourth-quarter results that were slightly below consensus, but we think 2013 guidance is more important, and this was relatively solid," Koning said.
Genesee stock hits record high
Genesee & Wyoming Inc.'s stock soared to a record high Wednesday after the company issued its financial projections for 2013, following its acquisition of Jacksonville-based RailAmerica Inc.
Connecticut-based Genesee is projecting earnings to increase by 64 percent this year to $4.60 a share. Revenue is projected to reach $1.625 billion, up from $1.48 billion combined for Genesee and RailAmerica in 2012.
The merger of the two short-line railroad companies was completed in October 2012, but Genesee did not take over operation of RailAmerica's business until Dec. 28, after the U.S. Surface Transportation Board approved the deal.
Genesee has cut 53 jobs from RailAmerica's operations in the past two months as it closes down RailAmerica's headquarters operations in Jacksonville, according to Securities and Exchange Commission filings.
The company said last week it expects to realize $36 million in annual cost savings once it completes the integration of RailAmerica's operations.
Genesee's stock jumped $5.27 at Wednesday's opening to a record high $90 after its report late Tuesday.
Genesee's stock has risen from the mid $50s since it announced the RailAmerica deal last July.
Before last week's rise in the stock, Wolfe Trahan analysts Scott Group and Edward Wolfe downgraded their rating on Genesee from "outperform" to "peer perform" because of the big runup in the stock.
"Genesee's stock historically outperforms materially at the onset of acquisitions cycles and less so in periods when it is using free cash flow to pay down debt like we expect in 2013," they said in their report.
"Visibility to strong revenue and EPS growth is high for 2013, but we recommend starting to take profits after the recent stock outperformance," they said.
"Longer term, we remain big believers of Genesee's unique model and its strong management team which has a solid track record of outperformance."
Main Street America earnings up
Privately owned Main Street America Group last week reported its net income rose 80 percent last year to $56.7 million.
The Jacksonville-based insurance company said its 2011 earnings of $31.5 million were heavily impacted by catastrophe losses.
Main Street's net written premiums rose by 10 percent last year to $978 million, its first double-digit growth since 2003.
"We finished the year with a very strong balance sheet," CEO Tom Van Berkel said in a news release.
"We significantly increased our surplus, grew our total assets to more than $2.1 billion and are very well-positioned to benefit from an improving property/casualty marketplace," he said.
Van Berkel said the company's "strong capital position will enable us to continue actively seeking profitable growth opportunities in existing states and new states."
Main Street currently has more than 600,000 policyholders in 36 states.
Fortegra adds board member
Fortegra Financial Corp. said in an SEC filing last week that it is increasing the size of its board of directors from seven to eight.
The Jacksonville-based insurance services company said it filled the added seat by naming Sean Sweeney to the board. Sweeney recently retired as CEO of Philadelphia Insurance Companies.
Coach announces CEO succession plan
Coach Inc. last week announced a CEO succession plan in which current Chairman and Chief Executive Lew Frankfort will step down in January 2014.
He will be succeeded by Victor Luis, who currently is president of Coach's international group. In the interim, Luis last week was appointed president and chief commercial officer of Coach, the New York-based handbag and fashion accessories company that has a major distribution center in Jacksonville.
Frankfort has been chairman and CEO of Coach since 1995. He will become executive chairman after his retirement as CEO.