Looking at Florida, Fifth Third Bank CEO is ‘cautiously optimistic’
Fifth Third Bank CEO Greg Carmichael
TAMPA — Economic recoveries historically last six to eight years, so when one stretches to nine, as is happening now, it’s an adventure into new territory.
But looking at the U.S. economy as a whole and Florida in particular, it’s not a landscape that unnerves Fifth Third Bank CEO Greg Carmichael.
At least, not yet.
"In general, we feel the environment is healthy," said Carmichael, who was in Tampa Friday from Fifth Third’s headquarters in Cincinnati for an annual review of the bank’s Florida operations. "We’re cautiously optimistic about growth in 2018."
Florida continues to grow, especially in Fifth Bank’s markets on the gulf coast, and while housing starts have slowed, they’re still happening, said David Call, Fifth Third’s regional president for the state.
Bright spots include loan activity in Fifth Third’s middle market — companies with $20 million to $500 million in annual revenues.
Carmichael also expects money made available to companies through the congressional tax bill to make them more competitive, leading more to consider investments in their businesses through capital expansion or acquisitions.
Fifth Third’s operations in Florida account a little more than $10 billion in deposits, an area where the bank has seen encouraging growth, and $6.8 billion in loans.
PREVIOUS COVERAGE: Why Fifth Third Bank leaders see time is right to grow customers — and reputation
By comparison, the bank’s loan portfolio for all 10 states where it operates is about $99 billion. Add in the securities the bank holds, and total assets reach $142 billion.
While encouraged, Fifth Third’s leadership do see some challenges and is watching some trends with the potential to take a bad turn.
With Florida’s unemployment rate at 3.8 percent, labor is tight, and the challenge of hiring and keeping employees is something Fifth Third’s bankers hear about from clients, "but that’s a good problem to have," Call said.
With millennials seeking to live in cities, downtown living has surged, but Carmichael said booming multifamily development remains "an area of concern," especially on in coastal areas where wages haven’t kept up with rent. As a result, the bank watches multifamily development on a market by market basis.
Uncertainty — like when talk about tariffs and trade heats up — can prompt companies to pause on plans to expand or invest in their businesses, Carmichael said.
The bank also is watching consumer debt, which Carmichael said has crept back up almost to pre-recession levels, with "slight delinquency tick-ups" in auto loans and credit card payments.
"That’s doesn’t necessarily mean that you’re going into recession," he said. "It’s just something we’ve got to be mindful of."
Contact Richard Danielson at firstname.lastname@example.org or (813) 226-3403. Follow @Danielson_Times