Latest news with #Sarasota-based
Yahoo
3 days ago
- Business
- Yahoo
Seacoast bets big on The Villages in $710.8M deal
This story was originally published on Banking Dive. To receive daily news and insights, subscribe to our free daily Banking Dive newsletter. Arguably Florida's most acquisitive bank is making a move on the state's largest retirement community. Seacoast Banking Corp. agreed to acquire Villages Bancorporation in a transaction worth $710.8 million that's expected to close in the fourth quarter, according to a Thursday press release. VBI, the parent company of Citizens First Bank, touts a deposit share of more than 50% in the metro area that includes The Villages, the 150,000-person community in central Florida. The deal comes just two weeks after Seacoast announced it had received approval from the Federal Reserve and Office of the Comptroller of the Currency to buy Heartland Bancshares. That transaction, worth roughly $110 million and announced in February, is set to close July 11, Seacoast said this month. The VBI deal builds on Stuart-based Seacoast's strategy to expand in central Florida. Thursday's transaction would add 19 branches to Seacoast's brick-and-mortar footprint and boost its asset total by $4.1 billion, the bank said. Figuring in the Heartland deal, too, Seacoast will have $21 billion in assets, $17 billion in deposits and $12 billion in gross loans once the VBI transaction closes, it said. Seacoast CEO Charles Shaffer called the deal a 'rare partnership opportunity to continue the legacy of high quality service to the Villages community with a shared vision for the many years of growth that lay ahead.' Seacoast expects the transaction to be roughly 22% accretive to earnings per share in 2026. Its tangible book value dilution should be earned back in less than three years, the bank said. Under the deal, VBI shareholders can receive their choice of $1,000 in cash for each share they own, or 38.5 shares of Seacoast common stock. VBI shareholders alternately could opt for a mix of the two, such that they would get cash for 25% of the holdings and the remaining 75% would be exchanged for Seacoast stock. The deal's $710.8 million value stems from Seacoast's closing price from Wednesday of $24.91 per share, the bank said. 'Since its founding in 1992, VBI has been committed to providing the very best banking experience for our customers,' CEO Jay Bartholomew said in a statement Thursday. 'In partnership with Seacoast, we are positioned to further accelerate this commitment, creating a best-in-class banking experience supported by a great team of professionals.' Seacoast's history of acquisition stretches far back from 2025. The lender simultaneously announced two deals in 2021: for Sarasota-based Sabal Palm Bank and Melbourne-based Florida Business Bank. It followed that up in 2022 with a $168.3 million purchase of Miami-based Apollo Bank (which itself had earlier terminated a proposed tie-up with Suncoast Credit Union). Seacoast further cemented its Miami foothold in 2022 by acquiring Professional Bank for roughly $488.6 million.
Forbes
01-05-2025
- Business
- Forbes
This Florida Homebuilder And Former State Legislator Is Now A Billionaire
Pat Neal describes himself as a seagull. 'I have the right to swoop down on any chicken bone,' says the former Florida state legislator and founder of Sarasota-based Neal Communities. By that, he means he takes a high-altitude view of his $1 billion (revenue) homebuilder but is quick to fly in if something small catches his eye. When Forbes spoke with Neal in early April, he'd just jumped off a call about vegetative buffers, insisting his colleagues move a podocarpus plant six inches closer to the street. 'Very few issues are too small for us to rectify in a home or in the environment. We want the wetlands to be pristine, the communities to be lovely all the time, the trash refuse to be nonexistent.' Guerin Blask for Forbes Toll Brothers builds mansions for the affluent. D.R. Horton puts up homes for the masses. Neal Communities, meanwhile, targets what Neal calls the 'marvelous middle': middle- and upper-middle-class families spending between $400,000 and just over $1 million (the median sales price in Sarasota is currently $530,000, per Redfin). 'Our strategy is to float above the public homebuilders, to build a home of higher quality,' he says. That means marble surfaces, more landscaping, brick entryways, painted garage floors and cabinets made of solid wood, not pressboard. The company has a 'perfection committee' that works on issues like making sure oven, microwave and refrigerator doors can open simultaneously without bumping into each other. It also means preserving as much of the natural environment as possible. Where other builders are quick to chop down inconveniently-located trees and plant new ones in easier spots, Neal works diligently to keep the originals. Where other builders tuck a sandy creek away into a pipe, Neal designs around it. 'Our homes are supposed to look like Florida,' he says. 'People live their whole lives with a dream of retiring here. And when they come, we want them to feel like they've landed in Florida, with the Florida environment and vegetation.' This attention to detail and focus on middle- and upper-middle-income customers has been a winning strategy: The privately held business is now one of Southwest Florida's biggest builders, and Forbes estimates that 76-year-old Neal, who owns 100% along with his two sons, has a net worth of $1.2 billion. 'The quality is exceptional. When he was starting in Sarasota, he opened a new avenue of homes that felt like the mega McMansion, but on an affordable scale,' says Candy Swick, who's headed a brokerage in Sarasota for 45 years. 'He's built up a good reputation,' adds Florida real estate expert Jack McCabe. But this year could test him like no other since the Great Recession. The western part of the Sunshine State, where Neal operates, has its highest housing supply in 15 years at the same time that Covid-era inward migration is dropping off. Home values in many areas are projected to decrease 9% or more over the coming year, according to the real estate data platform Reventure. Macro trends don't look favorable either, with high interest rates reducing demand for houses nationwide and the tariff war threatening to add thousands of dollars to the cost of building materials. Neal's gross profit margin has dropped from about 30% in 2023 to 24% today. He's had to slash prices by 10% to 11% over the past 12 months through concessions like free amenities and mortgage subsidies. 'We have a bad combination that's going to be hard for homebuilding for a few years,' he admits. 'We plan to make less money over the short term.' To prepare, Neal's pivoting away from a key part of the business model that made him a billionaire. Instead of focusing on the middle of the market—historically about 80% of his sales—he's gambling on a 'barbell-shaped strategy,' going after folks at both the higher and lower ends. 'Middle-class people in the last few years have not prospered as they previously did,' Neal says. 'I'm moving to the edges for the present, hoping that the marvelous middle recovers over the course of time.' Neal himself grew up in middle-class America, born in 1949 in Des Moines, Iowa and raised as the youngest of two brothers by his mother (his dad left in 1956 and moved around the country working as land buyer for a Holiday Inn franchisee; his parents divorced in 1959). Neal took to business at a young age with both traditional gigs like lawn mowing as well as craftier pursuits like bottling and selling detergent. He started a company called Youth Power, for which he recruited seven local kids to perform services like cleaning attics, hauling trash bins and moving furnaces. Customers paid $1.25 per hour; Neal paid the youths $0.85. At age 16, he earned about $5,800—more than his mother made as a schoolteacher. His ADHD was evident at a young age (excerpts from his first grade report card: 'too hurried'; 'is a good thinker'; 'just does not pay good attention'). He says his mom had to attend many parent-teacher conferences. 'I have always been a person of very great and substantial energy, bordering on driving other people crazy,' says Neal, 'which I've thought was a huge benefit in life, because I have always been busy doing something.' He enrolled at the University of Pennsylvania's business school in 1967, a couple of years behind Donald Trump. (He saw the future president around campus but didn't interact with him.) Penn is where he started getting involved with politics, beginning with future U.S. Senator Arlen Specter's unsuccessful campaign for mayor of Philadelphia and then successful reelection as district attorney, for which he was Specter's driver and body man. He also worked on Richard Nixon's presidential campaign and spent two summers in the Army reserves to avoid getting drafted into the Vietnam War. In 1970, during a multi-year break from school that began when classes were cancelled following the Kent State shooting, he started building homes with his dad. Neal's father had retired to Florida but was itching to start working again, so he purchased a plot of land at a fishing lodge on Whitney Beach near Sarasota. Neal helped him develop it into a small neighborhood, doing some of the physical labor—like pouring concrete and building sea walls—and investing $20,000 of his own money into the project (he made $93,000 when they closed on the homes around late 1972). His dad handed over the company reins within a few years and went back into retirement. 'Once he set me off, I was a perpetual motion machine,' says Neal. The threat of tariffs could increase his average house cost by over $10,000 but he says Neal says he won't pass it on to his customers. Meanwhile, Neal remained interested in politics. In 1972, amid the Watergate scandal, he decided that associating with the Republican Party had become a liability and switched parties. He ran for the Florida House of Representatives as a conservative Democrat two years later and won. At the same time, the father of his future wife Charlene ran unsuccessfully as a Republican for a state senate seat. A reporter suggested to Charlene that she and Neal could make a good couple, so she decided to do some research: She showed up at one of his speeches with a telephoto lens. 'She checked me out to see if I was suitable for a date,' cracks Neal. 'It wasn't a blind date; it was a one-eyed date.' The pair met, married and immediately began working together in the homebuilding business. Neal followed up his two years in the lower house with four terms in the Florida Senate. In 1986, he lost his sixth election to a Republican as the region shifted red. Neal changed parties a second time and considered running again, but ultimately decided to focus on his business. Perhaps his biggest accomplishment was co-authoring the state's first wetlands legislation in 1984—a law that he's now using as a homebuilder. Neal, who says he's always been an environmentalist, put in a provision mandating that developers who destroy a wetland habitat must create an enhanced habitat (larger or more diverse) somewhere in the same watershed. He's still involved in politics, donating to the GOP, serving on the transition teams for Governor Ron DeSantis and his predecessor Rick Scott, and sitting on the board of Florida Tax Watch, a non-partisan government watchdog. (He says he's 'not a big supporter of President Trump.') Neal also uses his political acumen and connections to advocate for roads and other infrastructure investments that benefit his homebuilding communities, like Manatee County's Fort Hamer Bridge, which was finished in 2017. Last year, Neal Communities built its 25,000th home. Revenues jumped from $613 million in 2022 to $905 million in 2023, when it completed the bulk of its Covid-era home contracts; sales hit $1 billion in 2024 as growth slowed. Buyers have come to love Neal's higher-quality-for-less builds. And he has been able to make it work in part by constructing homes that are a bit smaller for their price point—roughly 2,300 square feet on average for the 'marvelous middle' homes—while many luxury-oriented builders have focused on building bigger homes to keep their margins high. Neal also buys and develops his own lots, whereas public builders increasingly rely on third parties to do so, and offers things like mortgages, swimming pools and title insurance himself. He even sells furniture through his wife Charlene's interior design subsidiary. True to the familial spirit in which Neal and his father cofounded the company 55 years ago, Neal has now brought six other relatives into the business. Besides Charlene, who formally leads design (though he calls her 'senior vice president of everything'), his sons John and Michael run subsidiaries focused on developing high-end, master-planned communities and low-end lots, respectively. A niece and a nephew are mid-level employees. His granddaughter will soon start as a summer intern. 'My view is that 'the Trump adjustment' will result in a decline in building activity and the reduction of interest rates.' Now the threat of tariffs, Neal says, could increase his average house cost by over $10,000 as well as reduce demand among that targeted middle class, which is already getting squeezed by high prices and interest rates. So he's buying more land for his high-end brand Neal Signature, where customers have more spending discretion in the face of economic headwinds. And he's focusing on his new, lower-end brand SimplyDwell, where he can build homes faster and cheaper. The idea for the SimplyDwell concept actually came from his VP of community and governmental affairs, Ivory Matthews, during a late 2022 board meeting. 'She said, 'Gosh, why don't we sell homes to young people? We have all these hometown heroes and teachers who can't buy a home, so why don't we as a company make a commitment for this?'' remembers Neal. 'And I said, 'I think the financial stars line up. We're going to have lower interest rates, and this is a great time to do it.'' He launched the brand the following year and is spending $200 million to buy 2,006 lots for its first phase. The inaugural set of nearly 50 SimplyDwell houses was finished in the fall of 2024; Neal aimed for them to hit the market right when interest rates plummeted. Rates did drop in the fall, but not significantly, so he's been writing his customers mortgage subsidies to prop up demand. Because SimplyDwell homes have fewer custom features, they're cheaper to build—and easier to do on 'spec,' i.e. build on speculation to be move-in-ready, rather than making them for specific customers. One advantage of spec construction is that it allows a builder to use economies of scale to streamline processes and cut costs. Neal was already planning to focus more on spec homes before the market soured to align himself with an industry-wide shift towards greater efficiency (public builders—which tend to have more standardized plans and methods—now dominate the market, so private builders are looking for ways to keep up). The trick will be ensuring that his company doesn't lose the attention to detail and quality that sets it apart. And that he doesn't get caught owning hundreds of empty new builds with no buyers in sight. 'He's gone through some difficult times,' says McCabe, the Florida real estate expert, noting that when the Great Recession hit, Neal—like many builders—had a large inventory of spec homes that were suddenly extremely difficult to sell. 'Pat's one of the most optimistic guys you'll ever meet. I think that he's lost a lot of money at times because of his optimism,' McCabe adds. 'He's in a delicate position: Once again, he's caught with a large spec inventory that's millions and millions of dollars. When things are good, money is flowing, it's advantageous to have more spec homes available. When things tighten up, then your carrying costs, your interest can really eat you up.' Neal, who is sitting on around 220 completed spec homes and building 200 more, still thinks the Fed will make steeper cuts in the coming months and that demand for lower-priced houses will soar. Last year about 70% of his homes were spec; this year he plans to make it 80%. After selling about 48 SimplyDwell homes last year, he aims to sell 84 this year and 300 in 2027. 'My view is that the—it's called 'the Trump adjustment'—will result in a decline in building activity and the reduction of interest rates,' Neal says. 'If by this time next year interest rates fall from 7% to 5%, we'll have a huge score in the moderate-price home, because of what I hope to be a soft landing.' One competitive advantage in his favor: He specializes in the type of product that Florida home buyers are likely to seek in the coming years. 'It's not like it was two or three years ago, where you could just throw up anything and they'd buy it,' explains Nick Gerli, founder of real estate data platform Reventure. 'Now buyers are really discerning. They have lots of options. So if homes aren't designed well or the construction quality is obviously lacking, that's going to be a big, big red flag. Qualitative aspects are going to become more important: making sure that homebuilding communities look good.' Another smart move is his conservative balance sheet management. He has always tried to avoid debt by growing his business slowly and says he's only 11% leveraged at the moment (debt to enterprise value). For comparison, Toll Brothers is at 23% and Dream Finders, another relatively small Florida builder, 41%. Neal's lower debt could give him more flexibility to pivot the business again if interest rates don't drop. One thing he says he won't do is raise prices, even if tariffs increase his costs: 'I'll simply have to take it out of the margins.' Despite the tough market, the mood at Neal Communities appears light. Those of its 311 employees who work in the field keep a 7 am to 3 pm schedule, though Neal starts much earlier and works through the evening. The one hobby he allows himself is reading. He's in the middle of three books right now and has many more scattered about: eight on his bedside table and one on his car floor. He's working through a variety of philosophy and religion books that has him contemplating his legacy. 'It's kind of existential: If you're a home builder, then what you leave behind in the built environment is your creation for your lifetime,' he says. 'The communities that we have built are the test of our creation and, you might say, the authenticity of our lives.' Or, put another way: 'A home is tangible,' he continues. 'And it remains for a hundred years after its creation. We want to make sure that what we leave behind is authentic and good.'
Axios
18-04-2025
- Axios
New College official out after latest arrest on exposure charge
A top New College of Florida official and former communications director for Gov. Ron DeSantis was arrested Tuesday on a charge of exposure of sexual organs, according to police records. State of play: Fred Piccolo Jr., the college's former marketing and media director, "is no longer employed by the college," according to an unsigned statement from the college's communications department shared with Axios. His name was also scrubbed from the college's website. As of Wednesday afternoon, he remained in custody at the Manatee County Jail. Driving the news: His arrest stems from an incident on March 28 in which Piccolo stopped his car to ask a woman for directions in Lakewood Ranch, where records show he owns a condo, according to a Manatee County Sheriff's Office arrest report obtained by Axios. The woman realized he was naked and looked inside his car, where she saw him holding his erect penis in his hand, the woman told deputies. She took off running and called 911. The other side: Piccolo's Sarasota-based attorney, Eric Reisinger, told Axios his client was diagnosed with early-onset Parkinson's disease 10 years ago and that "medications prescribed by his medical team have, regrettably, resulted in compulsive behavior and hypersexuality as side effects." "Consequently, these side effects are causing Mr. Piccolo to behave in a manner inconsistent with his established character," Reisinger said. The big picture: Piccolo, 47, is also facing three additional exposure charges stemming from incidents last year, court records show. On Aug. 22, Piccolo exposed himself to a female employee of the Banana Republic store at University Town Center, according to a Sarasota County Sheriff's Office probable cause affidavit. He used his hand "in a stroking manner" while looking at the associate through the open door of his fitting room, a deputy wrote. A week and a half later, on Sept. 3, he exposed himself to two female employees at Dillard's in the same shopping center, investigators say. He did it again the next day at the same store, according to police. Police forwarded the cases to prosecutors, who filed charges against Piccolo in all three cases in October. The cases remain open. Between the lines: New College officials, as of Wednesday afternoon, hadn't responded to Axios' inquiry about the timing of Piccolo's departure. He was still listed on the college's website as the director of marketing and media in February, four months after prosecutors filed charges against him, according to the Internet Archive. Flashback: Piccolo also faced allegations of inappropriate sexual behavior in 2022, dating from his time as campaign manager for former state Rep. Jackie Toledo's unsuccessful bid for Congress. Toledo, in a lawsuit, accused Piccolo of sending her inappropriate text messages with photos of himself in various states of undress. She later voluntarily dismissed the lawsuit. Catch up quick: Piccolo has an extensive resume in Florida GOP politics. He worked as a spokesperson for current New College president Richard Corcoran when Corcoran was speaker of the Florida House from 2016-2018. In 2020, DeSantis hired him as communications director. He resigned about six months into his tenure amid criticism over a post on X, then Twitter, about the COVID-19 pandemic. From there, Piccolo moved to the Florida Department of Education, where he worked as an executive vice chancellor, once again under Corcoran, who was education commissioner at the time.
Yahoo
03-04-2025
- Climate
- Yahoo
Researchers release Atlantic hurricane season predictions. What to know.
Recovery is still underway in Tampa Bay after last year's historic hurricane season. Many residents have not returned to their storm-damaged homes, and businesses remain shuttered along coastal areas. And yet, researchers have begun releasing their predictions for this year's approaching hurricane season. It could be another busy one. Colorado State University, a school renowned for its hurricane research, said it expects 'above-normal' tropical activity this year. The early-season prediction, released Thursday, stems from warm sea-surface temperatures, and the potential for conditions that kindle tropical activity. University researchers said they expect 17 named storms, of which nine will become hurricanes and four will become major hurricanes (a storm with sustained winds of 111 mph or higher). 'Forecasting the future is hard, whether you're forecasting weather, whether you're forecasting sporting events, political races, all that stuff,' said Philip Klotzbach, a meteorologist at the university. 'But we also find that you can see a lot by looking, basically by going back into the past. There are clues in the atmosphere and ocean system that can tip us off as to whether the current hurricane season is going to have above or below normal activity.' Colorado State's researchers aren't the only ones calling for an above-normal season. A similar forecast was released Tuesday by the Climate Adaption Center, a Sarasota-based nonprofit. Bob Bunting, the center's CEO, said he expects 17 named storms, of which 10 will become hurricanes and five will become major hurricanes. 'In this day and age, when we know so much, we have to share it with the community, and hope the community uses this information to inform their decisions,' Bunting said Tuesday during the outlook presentation. According to the National Oceanic and Atmospheric Administration, an average season consists of 14 named storms, of which seven become hurricanes and three muscle up to major hurricanes. Colorado researchers plan to update the hurricane outlook in June, July and August. They said question marks remain ahead of the hurricane season — like how far and wide warm waters will persist this summer, and if a La Niña will arrive during peak season. Either could bring more intense storms: Warm waters act as fuel for tropical activity, and a La Niña could pave the way for more storms. Experts predict that 2025 hurricane activity will be about 125% of the average season ranging from 1991 to 2020. Last year's season, for instance, was about 130% of the average season. Klotzbach compared the prediction for this year to 2017, one of the most active seasons on record that brought Hurricanes Harvey to Texas, Irma to Florida and Maria to Puerto Rico. Despite uncertainty, researchers' warnings remain consistent: All it takes is one land-falling storm for residents to feel major effects. Tampa Bay learned the lesson several times last year. Six months later, and Tampa Bay is still recovering from the onslaught of Hurricanes Debby, Helene and Milton. Here's the 2025 early season forecast, broken down. In late March, sea surface temperatures in the region where most hurricanes form (from the coast of Africa to the Caribbean Sea) were warmer than normal, according to researchers. 'The degree of warmth varies considerably depending on where you look in the main development region,' Klotzbach said in an email to the Tampa Bay Times. 'Some places are a bit cooler than normal, while the Caribbean is quite a bit warmer than normal.' Colorado researchers said hot waters in the eastern subtropical Atlantic and the Caribbean in March often suggest an active hurricane season. Warmer waters lead to an unstable environment, which can ramp up storm conditions, they said. Areas of the Gulf of Mexico along Florida's west coast are running slightly cooler than average. Bunting attributed this to a chilly winter. But he expects coastal waters will quickly begin to warm. While Atlantic waters are hot, sea surface temperatures remain below the astounding record heat from last year. The record-temperatures led to one of the most aggressive early season predictions in the university's history. Researchers last April predicted 11 hurricanes (the highest of any early season outlook), which proved correct. The globe is currently experiencing a weak La Niña. La Niña is one part of a three-phase, year-to-year climate pattern that also includes El Niño and a 'neutral' phase Researchers expect the La Niña — which can heighten storm activity — will wane in the next couple months and lead to a neutral phase. However, Colorado experts are uncertain what phase will take hold come peak hurricane season, around August to October. Models show a wide range of possibilities, however most models anticipate neutral or La Niña conditions at the height of the season. Federal forecasters agree that the globe will fall into the neutral phase of the climate pattern (when there is no La Niña or El Niño) in the next few months. By peak season, forecasters said neutral conditions are slightly favored over La Niña conditions. By the October to December timeframe, La Niña or neutral conditions are equally likely, with each having a 42% chance of occurring. The combination of a warmer-than-normal Atlantic combined with neutral or La Niña conditions usually supports more tropical activity, researchers said. Researchers said there is a 51% chance (nearly a coin toss) that a major hurricane will make landfall somewhere along the U.S. coast this season. For comparison, that number was 62% last season. Zooming in closer, university researchers said the U.S. east coast, including the Florida peninsula, has a 26% chance of experiencing a major hurricane, up from the typical 21% chance. University researchers used federal data of past hurricane tracks to calculate the possibility of storms falling within 50 miles of states along the East and Gulf Coast of the country this season. In all instances, Florida had the highest probability of any state. There is a 92% chance of a named storm falling within 50 miles of Florida, a 65% chance of a hurricane doing so, and a 35% chance of a major hurricane landing within that distance. The National Oceanic and Atmospheric Administration, largely considered the gold-standard forecast, does not release its 2025 outlook until mid-May. Bunting said the Climate Adaption Center released its April forecast to allow residents extra time to know their risk and prepare. Bunting spoke in Sarasota, just a few miles from where Hurricane Milton made landfall last year. 'The reason we do this, is so we have longer to think about this and do something about it,' Bunting said. • • • For Tampa Bay, Helene was the worst storm in a century More hurricanes are slamming the Gulf Coast. Is this the new normal? Want to know what areas are flooding in Tampa Bay? Here's where to look. Checklists for building all kinds of storm kits.
Yahoo
12-03-2025
- Business
- Yahoo
Florida legal aid groups warn bank-backed legislation could slash their funding
A long-simmering feud over the money that banks pay to legal aid organizations to fund legal help for the poor is in front of the Legislature again. Florida bankers are supporting a bill (SB 498) to cap the rate paid on interest on trust accounts (IOTA). An attorney trust account is a special bank account used to hold client funds separately from a lawyer's business funds to follow legal and ethical rules. Legal aid organizations believe the move will cut their budgets, preventing them from providing services to those in need, including veterans seeking to access benefits, hurricane victims, families looking to adopt and more. 'The changes proposed would come at expense of vulnerable Floridians who rely on Florida legal aid programs even though those banks are not required to participate in the program,' said Leslie Powell-Boudreaux, executive director of Legal Services of North Florida. Because of a change made by the Florida Supreme Court in 2023, banks were required to pay out rates on trust accounts that were tied to the Wall Street Journal Prime Rate, which averages rates made on loans. That rate was higher than the prior IOTA rate rule, and combined with the surge in interest rates set by the Federal Reserve which drove loan rates higher, it resulted in a massive boost to the interest paid on trust accounts and the funds received by legal aid groups. In the 2021-22 fiscal year, IOTA funds provided $9.5 million to Funding Florida Legal Aid, the group formerly known as the Florida Bar Foundation. It provides money to legal services groups around the state. In the 2024-25 year, the funds jumped to $280 million, or about 29½ times more. Through the first six months of the current fiscal year, IOTA funds ran up to $155.4 million. Bankers argue the new higher rates they pay on trust accounts are unfair. Trust accounts involved a high volume of transactions and more work for the banks to maintain, while paying higher rates than they do for other low-volume accounts they maintain. 'We are fully in support of legal aid but it's got to be done in a way that makes sense,' said Dennis Murphy, president and CEO of Gulfside Bank, a Sarasota-based bank. 'These accounts literally have hundreds if not sometimes thousands of in-and-out type of transactions on a monthly basis,' he added. 'The rule change ... doesn't allow us to offset the interest with wire fees and all the other transactions we've got.' The banks in support of the bill also claim the rule change by the court was an inappropriate regulation of their business by the justices; the legal aid groups argue it was a change in the rules for lawyers. The Florida Bankers Association asked the court to reconsider its decision but the Florida Supreme Court rejected that move in August 2024. The court did approve of allowing the FFLA to set aside $143 million in its current budget for reserves – more than half of the $280 million it received. For the bankers, this showed that the legal aid groups can't spend all the money they've received in the last few years and the rate for IOTAs should be lowered. But legal aid groups counter that the reserves will allow them to mitigate for fluctuations in interest rates that could lead to lean times in the years ahead. The bill passed through the Senate Judiciary Committee on Wednesday on a 7-2 vote, with two Democrats, Sens. Lori Berman of Lantana and Rosalyn Osgood of Tamarac voting against it. Another Democrat, Sen. Tina Polsky of Boca Raton, voted with Republicans in favor of it. Berman noted that banks don't have to participate in the IOTA program. As of December, 170 banks offer IOTA to lawyers, 16 more than in March 2023 when the Florida Supreme Court issued the rule change. 'I would like to see us have a dedicated funding source for legal aid,' Berman said. 'I would like to see a resolution where everybody can get on board … but until that time I'm going to support what the Florida courts have done.' Sen. Don Gaetz, R-Niceville, noted that while the bill might cut funding for legal aid groups, they have so much stored away in reserves it wouldn't disturb services for those in need. Saying he was a supporter of legal aid, he still took issue with how the courts made the change in the first place. 'I'm troubled that the Supreme Court would tell banks what interest rates they have to pay,' he said. The bill faces two more committee hurdles in the Senate before reaching the floor in that chamber. Its companion measure (HB 173) hasn't yet received a hearing in the House. Last year, a similar bill advanced in the Senate but didn't gain traction in the House. Gray Rohrer is a reporter with the USA TODAY Network-Florida Capital Bureau. He can be reached at grohrer@ Follow him on X: @GrayRohrer. This article originally appeared on Tallahassee Democrat: Senate panel advances bill limiting legal aid funding from banks
