By Maurice Stouse, Branch Manager and Financial Advisor

The Financial Services Sector of the stock market has been the 2nd best performing sector so far this year. A sector of the market consists of similar industries and those which have other things in common such as, in this case, interest rate sensitivity (there are a total of 11 sectors that make up the stock market). Yields on bonds, US Treasury bonds, directly impact banks and financial services companies as well as the overall market. The yield of the 10-year US Treasury note is closely watched as it has a direct impact on the overall stock market as well as the Financial sector. This is because when yields rise it is thought that banks and other financial services companies stand to increase their revenues and their profits as a result. Yields help determine the rate a bank can charge for lending money and as they rise the banks’ revenues and profits rise faster than their costs. Note yields impact the rates of interest that banks can charge but are not the same as stated interest rates you typically see with regards to rates like the Federal Reserve’s Federal Funds rates.

Rates on the 10-year Treasury note have been climbing for several months now.  At this writing, the yield was at 1.74%. That is up from a low of just .57% in April of last year, nearly tripling.  At the time when the rate was that low, prospects for banks were quite grim especially since there were fears that banks and other lenders might be facing steep losses because of the substantial economic downturn brought on by the pandemic. Banks also had to move to set aside additional reserves for those potential losses. That is money the banks could not lend out. While banks could invest those reserves in things like Treasuries, (which are quite conservative) they stood to make somewhat less on their reserves.

In mid-March, it was reported that banks had somewhat exceeded the amount they needed to have in additional loss reserves as the fears of loan losses continued to decrease as the economic picture continued to improve. That put many lending institutions in a position to free up those reserves that were  into higher yielding loans and hence drive greater revenues and profits to the lending institutions. Shortly following that however, the Federal Reserve made changes to some pandemic era rules put in place last year that allowed banks to exclude (from something known as their supplementary leverage ratios), the Treasury securities they held in their Federal Reserve deposits.  With that no longer being the case, banks were suddenly faced with lower revenues because of those changes since they would have to increase their reserves with non-US Treasuries. This is an example of the risk of investing and the impact of unexpected events, in this case the change of a previously favorable regulation.

Nonetheless, if yields continue to rise, that would be increased potential for revenues for banks and lending institutions. So where might an investor look if she or he wanted to add financials to their portfolio?

There are over 5,000 banks in the United States. They range in size from the big, so called money center banks, to the much smaller community banks. In between are regional banks. There is a plethora of research available for investors to review when considering the sector. They can look at individual stocks of financials, mutual funds, and exchange traded funds. Additionally, many of these may offer attractive dividend yields to their investors as well.

Also, some financial services companies offer online accounts, credit cards and loans. Brokerage firms too are part of this sector. Many brokerage firms have banking subsidiaries where uninvested cash of their customers is held. Those subsidiaries stand to make greater earnings when yields increase. There are also a multitude of “fintech” companies which stand to improve their earnings when yields increase.

What might be driving the increase in yields? The most simple explanation is expectation of economic growth or economic rebound. That would be a signal that demand is growing, and that inflation is increasing. Large institutional investors like pension plans, endowments, and funds tend to sell lower yielding Treasuries as a result. More selling than buying drives the price of bonds and treasuries down but conversely drives the yield up.

The Federal Reserve has two main objectives: One is full employment and the other is keeping inflation in check. The Fed has most recently indicated that it does not see inflation as a particular threat and is prepared to keep rates close to zero until 2023. Note those are rates, not the yields. The daily trading of US Treasury bonds determines the yields. Some inflation is considered healthy for economic growth. That is typically from 2-3%. Investors however appear to be more concerned with inflation as supply interruptions and price increases of various commodities have moved producer and consumer prices up. Left unchecked, inflation eventually erodes purchasing power which is harmful for consumers and the economy.

If you want to learn more or want to make some adjustments to your investing plans, be sure to use your resources. Ask your advisor or brokerage firm for information, research, advice, or input. In some situations, investors prefer to delegate that decision making to an advisor or money manager. In any case, continue to understand and know what you own and why you own it.

Maurice Stouse is a Financial Advisor and the branch manager of The First Wealth Management and Raymond James and he resides in Grayton Beach. He has been in financial services for over 34 years. His main office is located at First Florida Bank, a division of the First, A National Banking Association, 2000 98 Palms Blvd, Destin, FL 32541. Branch offices in Niceville, Mary Esther, Miramar Beach, Freeport and Panama City, Pensacola, Tallahassee, and Moultrie, GA.  Phone 850.654.8124. Raymond James advisors do not offer tax advice. Please see your tax professionals.

Email: Maurice.stouse@raymondjames.com.Securities offered through Raymond James Financial Services, Inc. Member FINRA/SIPC, and are not insured by bank insurance, the FDIC, or any other government agency, are not deposits or obligations of the bank, are not guaranteed by the bank, and are subject to risks, including the possible loss of principal. Investment Advisory Services are offered through Raymond James Financial Services Advisors, Inc. The First Wealth Management First Florida Bank, and The First, A National Banking Association are not registered broker/dealers and are independent of Raymond James Financial Services. Views expressed are the current opinion of the author, not necessarily those of RJFS or Raymond James, and are subject to change without notice. Information provided is general in nature and is not a complete statement of all information necessary for making an investment decision and is not a recommendation or a solicitation to buy or sell any security. Past performance is not indicative of future results.

Investing involves risk and you may incur a profit or loss regardless of strategy selected, including diversification and asset allocation. Investors should consult their investment professional prior to making an investment decision.

Sector investments are companies engaged in business related to a specific sector. They are subject to fierce competition and their products and services may be subject to rapid obsolescence. There are additional risks associated with investing in an individual sector, including limited  diversification.

Tax Collector Chuck Perdue had specific goals he wanted to accomplish when he took office in 2017. Among those goals was improving customer service, putting more efficient systems in place, and creating a positive work environment for team members. He and his team have certainly made many improvements over the past four years and he is focused on ramping up those efforts, particularly when it comes to pouring into his team.

“We’ve improved facilities, we have implemented more efficient systems, we’ve created and defined new policies and while we’ve tried to focus on our team all along the way, there is never a better time than now to make them the priority,” said Perdue.

Perdue and his team understand the difference a caring and supportive work environment plays in the lives of team members.

“Our team has experienced a lot together, first a category 5 hurricane and now a global pandemic,” said Perdue. “These experiences have brought us really close as a team, we’ve become a family. We genuinely care about one another’s success not just in the office, but in life.”

While some may see the work of the Tax Collector’s Office as pretty straightforward, Perdue is quick to explain the reality of the work his team faces each day.

“The work the team does each day is challenging. They make it look easy, but the reality is they are toggling between multiple systems, interpreting policies, reading manuals and trying to solve problems all day long. Every transaction is different and small nuances in a document can completely change the way it has to be processed,” said Perdue. “The work can be mentally taxing, especially when most customers are there not by choice, but because the law compels them to visit us and aren’t always happy to be visiting.”

Perdue recognizes that with the challenging work they do each day, they need to feel valued and supported. He and his leadership team have created some tools to help ensure they understand the concerns and needs of the team.

“Each year we deploy an employee engagement survey, which really aims to hear from team members in an anonymous manner. It is a very in-depth survey and we encourage them to be completely honest with us and share their thoughts in the comment areas to give us some context,” said Perdue. “The survey is certainly no substitute for having one-on-one conversations with team members, which we work to do as well, but it is one avenue for them to give feedback. It provides our leadership team with an opportunity to hear the areas in which we need to improve. We always have opportunities to improve.”
As a result of the survey responses, Perdue and his leadership team work annually to incorporate new objectives into their strategic plan to address the needs identified. One of the objectives recently deployed as a result of team member feedback was a growth and development plan. The plan serves as a roadmap to help team members understand how they can grow within the organization.

Perdue believes when you take care of your team your team will take care of the customers.

“Our goal is to be an employer that attracts and retains some of the best talent in Bay County,” said Perdue. “While I think we’ve made great strides, we have to continue to be intentional in our efforts to care for our team and build an environment of trust and support.”

Individuals interested in a career with the Tax Collector’s Office can visit www.baytaxcollector.com/join-our-team to learn more about current opportunities.

By Brittany Kirke

It’s been a year since the pandemic spread across the globe, and our bubble on the beach has remained a light in the lives of those who live here and come to visit. With this in mind, Northwest Florida Beaches International Airport (ECP) has crafted a plan to facilitate a smooth transition into this new Covid-19 world. They have readily adapted their everyday routines to prepare and practice safety measures for all patrons and employees. As spring break ends and summer begins, here is what life looks like at our local airport.

In response to the Covid-19 pandemic, ECP Executive Director Parker W. McClellan Jr., A.A.E., and the ECP Team have taken measures and remain committed to the health and safety for passengers and staff. ECP, along with the tenants in the Airport and their airline partners, are working each day to ensure the safety and security of their passengers and team. The ECP Ready Program outlines these measures.

Key items to note are:
– Masks required. ECP and its airline partners require masks throughout the terminal, at the gate and aboard the aircraft.
– Enhanced facility cleaning. Additional staffing to increase frequency of sanitization.
– Additional equipment and cutting-edge cleaning supplies. Hand sanitizer units have been installed throughout the terminal.
– Measures to promote social distancing. Social distancing markers have been placed throughout the Terminal to encourage passengers to remain six feet apart when possible.

For travel updates and more information on their ECP Ready Program, visit iflybeaches.com.

Northwest Florida Beaches International Airport serves passengers throughout the Northwest Florida Region. For Panama City Beach residents, ECP is only a hop, skip, and a jump away. So, what do all these improvements mean for our beloved beaches? Scheduled flights in March were comparable to typical July numbers at ECP. On a Saturday in March, ECP welcomed more than 80 commercial flights. We can expect to see steady and increased traffic from now until early in the Fall. Mr. McClellan stated that they have seen “all sorts of growth through our community and region” and is proud to offer a variety of diverse destinations at the Airport for the Northwest Florida Region.

“As our Airport grows increasingly popular, we gain opportunities to expand our flight options,” said McClellan. “Our facilities and staff continue our dedication to providing a premier flying experience and will adapt to our growth as they do every year.”

Currently, there are four main airlines that operate at ECP: American Airlines, Delta Air Lines, Southwest Airlines, and United Airlines.

ECP’s airline partners are excited to offer new and returning services this spring and summer.

This spring, American Airlines will begin nonstop service to Philadelphia (PHL) while passenger favorites including Austin (AUS), Baltimore (BWI), Chicago (ORD/MDW), Denver (DEN), and St. Louis (STL) will be returning.

There will also be increased frequency for the following flights: Atlanta (ATL), Charlotte (CLT, Dallas (DFW/DAL), Houston (IAH/HOU) and Nashville (BNA).

Although the hope has always been that this airport will grow to be an international hub, there are, as of yet, no direct international flights incoming or outbound. When asked about this, Mr. McClellan noted that the airlines determine the flight destinations offered at ECP, but they look forward to accommodating this growth.

To learn more about ECP New and Returning Seasonal Services, please visit iflybeaches.com.

A Beautiful, Durable and Economical Flooring Choice

By Shannon Salisbury, Director of Marketing, Flooring Depot

The newest innovation of engineered flooring products, waterproof flooring is beautiful, durable flooring offering designs that faithfully replicate the high-end look of hardwood, ceramic tile, stone and concrete with the exceptional performance, comfort and affordability of luxury vinyl. These floors have the same multi-ply layer construction, but feature a waterproof core that can survive splashes and spills without swelling or warping.
Waterproof solid core planks are thick like solid wood boards, but also 100% waterproof—a feature that places them in a league of their own! It’s the look and feel of hardwood with waterproof performance. The advantageous backing on solid core floors also muffles sounds, making them quieter than other hard surface floors.

Waterproof solid core floors can be installed directly over most existing floors, including ceramic tile, vinyl, hardwood and laminate floors, and feature easy-install locking systems or flexible glue-down installation options. In addition, their rigid, dense construction conceals the bumps and hollows of an imperfect subfloor. The solid core planks can also be installed with attached underlayment to create a floating floor system.

So, what are the best rooms for waterproof flooring? Waterproof vinyl plank and tile flooring has the eye-catching style to be featured in your best rooms, but is designed to go anywhere—from kitchens and bathrooms to basements and mud rooms. The extensive product choices available in trend-setting looks of wood, stone, ceramic tile and stamped concrete present numerous waterproof flooring options to match all tastes and styles, including, traditional, modern, industrial and farmhouse styles.

You’ll also love how waterproof luxury vinyl tile and plank floors resist the wear and tear of everyday life. From the kitchen to the playroom, and all points between, these H20-friendly floors are made for family life. Scratch and stain resistant, mold and mildew resistant– you’ll never have to worry about where to install these long-wearing, beautiful floors. With the ability to stand-up under intense traffic, you can relax knowing waterproof flooring is high-traffic, family-friendly and pet-friendly!

Flooring Depot of Panama carries all major waterproof luxury vinyl tile and plank brands like, MSI, Southwind, Pergo, Mohawk and many more. Every transaction is backed by the strongest warranties in the industry. We have the largest selection of in-stock flooring products available in Bay County, so you’re certain to find the perfect waterproof flooring product to match your style and budget.

With extensive service offerings, including financing options and in-house Installation Technicians, Flooring Depot provides turn-key solutions to make your waterproof flooring purchase enjoyable and stress-free! Flooring Depot also offers convenient in-store, in-home and virtual appointments via Zoom and FaceTime.

Whether you’re a homeowner, builder, contractor or DIYer, Flooring Depot’s skilled Flooring Specialists and associates are happy to assist with inspiration, design direction, FREE In-Home Estimates, Financing and Installation, while offering prices to match any lifestyle—even if your personal style requires budget-friendly options.

Flooring Depot of Panama City invites you to visit their impressive showroom at 1310 W. 15th Street, Panama City, and experience the Flooring Depot difference! On the web: flooringdepotofpanama.com.