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Basch Report
Jax Daily Record Thursday, Sep. 27, 201805:20 AM EST

The Basch Report: Wells Fargo, Ameris plan cuts, consolidation

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The two banks have major operations in the Jacksonville area.
by: Mark Basch Contributing Writer

Two banks with major operations in the Jacksonville area, Ameris Bancorp and Wells Fargo & Co., last week announced plans to close branches and consolidate operations.

San Francisco-based Wells Fargo has the largest branch network in the Jacksonville metropolitan area with 52 offices, according to the latest Federal Deposit Insurance Corp. data.

The company does not have data for employees in its Jacksonville area operations but said it has more than 13,000 employees in Florida.

Wells Fargo’s total employment is about 265,000 in more than 8,000 offices.

CEO Tim Sloan told employees in a companywide town hall meeting that Wells Fargo expects to cut its headcount by 5 percent to 10 percent throughout its operations over the next three years through “displacements” and attrition.

“We are continuing to transform Wells Fargo to deliver what customers want – including innovative, customer-friendly products and services – and evolving our business model to meet those needs in a more streamlined and efficient manner,” Sloan said, according to a news release.

The release did not give more details about where the cuts might come.

Meanwhile, Ameris said it expects to cut costs by $20 million next year through initiatives including “certain branch closure and consolidation plans.”

Ameris is officially headquartered in Moultrie, Georgia, but has its executive offices in Jacksonville.

The company has 126 offices in Florida, Georgia, Alabama and South Carolina. It expanded in the spring with the acquisitions of Jacksonville-based Atlantic Coast Financial Corp. and Atlanta-area’s Hamilton State Bancshares Inc.

The company did not specify the number of jobs or offices that may be affected. Ameris said in its annual report it had 1,460 employees at the end of 2017, while Atlantic Coast Financial reported 165 and Hamilton reported 342.

Ameris CEO Dennis Zember said in a news release that the company will invest its cost savings in long-term growth initiatives. He doesn’t expect the cuts to impact customer service.

“We have invested substantially in mobile and on-line delivery systems that increasingly mirror our customers’ behaviors,” he said.

ParkerVision reduces board

After reducing its operations last month, ParkerVision Inc. last week reduced the size of its board of directors from eight members to five.

Four directors who had served on the board since 2004 or earlier resigned and a new director was added: Lewis Titterton, who has been an investor in Jacksonville-based ParkerVision.

ParkerVision, which has been developing wireless technology, has been struggling, with sales of its new in-home Wi-Fi product called Milo disappointing since it was launched last fall. The company also has several legal actions pending against major wireless device manufacturers alleging patent infringement, but none have been successful to date.

As the company continues to lose money, ParkerVision last month said it was closing its office in Lake Mary and cutting 30 jobs. It reported 45 full-time employees at the end of 2017.

“The downsizing of our board coincides with a narrowing of the company’s business focus and will allow for closer collaboration between the board and the executive management team,” CEO Jeff Parker said in a news release.

The company recently has raised money with the sale of convertible notes and because of that, ParkerVision had to call a special meeting of stockholders to authorize an increase in the number of shares outstanding.

The stock was delisted from Nasdaq last month but continues to trade in the over-the-counter market. The stock bottomed out at 21 cents after the delisting but it has been trending up recently, trading near 60 cents.

Titterton, who has a background in health care technology, has increased his investment in the company recently and now is the largest stockholder on the board, according to a proxy statement filed for the special meeting.

Titterton controls 4.1 percent of the stock, while Parker’s stake is 2.9 percent.

Rayonier AM sells former Tembec business

Rayonier Advanced Materials Inc. last week sold the assets of one of the businesses it acquired from Tembec Inc. last year.

Jacksonville-based Rayonier AM sold its resins business to LRBG Chemicals for about $16.5 million.

Rayonier AM acquired Montreal-based Tembec in November for cash and stock valued at more than $800 million, a deal that greatly expanded Rayonier’s sales and geographic reach.

Like Rayonier AM, Tembec produced cellulose specialties products but also had other product lines new to Rayonier AM, like the resin business.

That business, with manufacturing facilities in Toledo, Ohio, and Quebec produces chemical resins used in the manufacturing of oriented strand board, hardboard and other engineered wood products, the company said.

“The sale of the resins business allows us to divest a non-core petroleum-based chemical asset. Further, it provides our stockholders with a fair value and incremental cash to be redeployed through our capital allocation process focused on risk adjusted returns,” Rayonier AM CEO Paul Boynton said in a news release.

Analyst sees more gains for FIS

Fidelity National Information Services Inc., or FIS, is trading near record highs. But one analyst thinks the Jacksonville-based provider of bank technology is poised for even more gains.

SunTrust Robinson Humphrey analyst Andrew Jeffrey, who already had a “buy” rating on the stock, raised his price target on FIS from $115 to $125 Monday, with the stock trading at $110.58.

“We believe investors will increasingly appreciate Fidelity’s consistent organic revenue growth and scalability,” Jeffrey said in a research note.

“While FIS has outperformed, up 18 percent in 2018, it has lagged faster growing peers,” he said.

With the consistent organic growth, Jeffrey is not expecting FIS to expand with acquisitions.

“We contend Fidelity is poised for a period of consistent capital allocation, focused on debt paydown and share repurchases. While M&A remains possible, in our view, the company should be discerning, owing to high valuations and a dearth of complementary businesses,” he said.

Creative Learning changes COO

St. Augustine-based Creative Learning Corp. last week announced Christian Miller resigned as chief operating officer and chief financial officer to return to a family business.

Bart Mitchell, who has served on Creative Learning’s board of directors for the past year, is replacing Miller, who joined the company in 2016.

That change came a month after board chairman Blake Furlow was named chief executive officer, a position that had been vacant.

Creative Learning, which offers educational and enrichment programs for children through franchisees, has been improving financially in recent months.

“Christian helped guide the company during a very difficult period.  He made many contributions to the operations and management of the company and generated two consecutive profitable quarters after three years of losses,” Furlow said in a news release.

CSX sued after floodwaters inundate town

In the aftermath of Hurricane Florence, residents of one North Carolina town are alleging inaction by CSX Corp. caused major flood damage

Five property owners in Lumberton, North Carolina, filed a class-action lawsuit Monday against Jacksonville-based CSX after floodwaters “poured through a gap in city levees.”

“This gap was created by a railway underpass owned by CSX,” said the suit filed in U.S. District Court for the Eastern District of North Carolina.

“Upon information and belief, CSX was aware that the underpass was a point of vulnerability for major flooding in Lumberton, ignored reports warning of the need for a permanent floodgate, and refused city officials’ pleas for permission to build a temporary berm to protect against forecasted Hurricane Florence flooding,” it said.

Concerns about the underpass have been ongoing for several years and were exacerbated two years ago because of flooding caused by Hurricane Matthew.

The lawsuit alleges CSX had been unresponsive to proposed resolutions to the problem even before Hurricane Florence threatened the area.

CSX responded to the lawsuit with a statement saying “while CSX does not comment on pending litigation, it is important to point out that Hurricane Florence was an extraordinary storm that brought record flooding and left many communities throughout the region devastated including Lumberton.”

CSX said it has extensive operations in the area.

“Our thoughts are with those impacted by Hurricane Florence and we remain fully committed to working with the City of Lumberton to implement a permanent solution,” it said.


 

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