July
28, 2000
NAELB
Brokers Don't Forget to Send Your Questionnaire Back--Monday is the deadline
Bob Teichman Teaches "Pushing the Deal Through Workshop" August 9, 2000, Oakland,
Calif.
This afternoon course will be excellent for all those involved in the
production
of leases and loans--salespeople, credit personnel, documentation
and UAEL
member rate of $55 is "cheap" for the benefit to be received. Worth
airfare
and time to Oakland, too. Don't pass this by. Questions, call Steve
Crane,
Bank of the West 925-975-3899 or e-mail: scrane@bankofthewest.com
Joe
Montana, Dave Wilcox, Ronnie Lott, Howie Long, Dan Rooney---we salute you!!!Congratulations
Two New Internet Leasing Companies Join the Fray--one up to $250,000 approval
on line and is not an "auction house." Can you believe it????? Our Hats Off to
CIT: Reports Profits Up 57.2%-- Transamerica Sells Off Cargo Interpool
COMMERCIAL FINANCE AMERICA CORPORATION ANNOUNCES THE LAUNCH OF ITS INITIAL WEB
SITES -- www.CommercialFinanceAmerica.com
AND
www.i-Leasing.com
NORWALK,
CT -Commercial Finance America Corporation ("CFA") today announced the launch
of its initial two B2B commercial finance sites -- Commercial FinanceAmerica.com
and i-Leasing.com.
CFA is a highly diversified commercial finance company that provides Capital Markets
Advisory Services, both online and offline, to companies ranging from startups
to Fortune 500s. CFA's team of professionals has over 200 years of combined experience
in the lending and leasing industry. Their areas of expertise include lending,
leasing, credit, structured finance, commercial and investment banking, capital
markets,accounting, tax and technology.
"What we've done with CFA is provide companies with one stop shopping for all
their financing needs. Our team is capable of funding transactions that range
from copiers to commercial aircraft. What we bring to a company is a level of
capital markets services that sets the standard for online financing," states
John J. Butler, President & CEO.
"The small ticket transaction can be highly automated through our online system.
This includes credit scoring, document generation, transaction status reporting,
and most importantly, lender matching. CFA is not an 'Auction Site'. We have developed
a highly proprietary lender matching system that allows CFA to directly match
the needs of our customers to the specific investment criteria of our funding
partners. This assures that our partners will only see transactions that will
work for them".
Butler further adds, "The response from our funding partners has been very positive.
They have made it very clear to us that the 'Auction Model' diverts resources
to review transactions that do not meet their lending criteria. With CFA's proprietary
lender matching system, the lenders know the deals they will receive have been
pre-qualified and meet their objectives."
"Deals above $250,000
still require a hands on approach. The nature and complexity of these transactions
require a higher level of service and expertise to fully understand the needs
and objectives of the borrower/lessee", Butler further explains. " CFA's team
members average over seventeen years of experience in the business and truly understand
the objectives of the borrower and the funding source. This provides a superior
level of service to all parties involved in the transaction."
CIT
Reports Financial Results
The CIT Group announced second quarter 2000 record net income of $151.4 million,
up 57.2% from $96.3 million reported for the same period of 1999. Six-month earnings
totaled $295.3 million, up from $188.2 million in 1999.
Earnings per diluted share for the second quarter were $0.58, compared to $0.59
for the second quarter of last year. Six-month earnings per diluted share were
$1.12, compared to $1.16 for the same period of 1999. Before the amortization
of goodwill, second quarter 2000 earnings per diluted share improved to $0.66
from $0.62 for the same period of 1999, and improved to $1.28 from $1.21 for the
six months ended June 30, 2000 and 1999, respectively.
The second quarter
2000 net income reflects growth from our 1999 acquisition activities, solid fee
and other income generation as well as considerable expense savings related to
operational integrations.
"The second quarter results reflect the continuation of progress toward our performance
goals," said Albert R. Gamper Jr., CIT chairman, president and CEO. "We have continued
to focus on our core competencies of credit and expense management. As a result,
we have achieved our original run rate $150 million expense target, but continue
to set our sights higher. While we still have work ahead of us to achieve our
objectives, I have confidence in the people of CIT who have consistently met these
challenges. At a time of rising rates and signs of slowing economic activities,
the broad diversification of CIT is proving to be very beneficial. However, in
light of the net interest margins in the first half of 2000 being lower than our
expectations, continued uncertainty regarding the interest rate environment and
lower securitization activity, we are revising our EPS estimate for the year 2000
to a range of $2.37-$2.43."
Financial Highlights:
Total managed assets increased to $53.4 billion at June 30, 2000, up 3.8%
from $51.4 billion at year-end, and $28.4 billion at June 30, 1999. The net increase
in managed assets of $0.2 billion over March 31, 2000 was achieved after the sales
of non-strategic portfolios amounting to approximately $0.5 billion during the
quarter. Commercial managed assets were $45.9 billion at June 30, 2000, compared
to $44.0 billion at December 31, 1999. Consumer managed assets were $7.2 billion
at June 30, 2000, compared to $7.3 billion at December 31, 1999, and were down
from $8.1 billion a year ago, reflecting our decision to exit certain lower return
product lines. Total portfolio assets increased to $42.6 billion from $40.4 billion
at year-end 1999 and $25.3 billion at June 30, 1999.
New business volume, excluding factoring, was $6.1 billion, an increase from $2.9
billion for the June 30, 1999 quarter due primarily to the Newcourt acquisition,but
down from $6.8 billion during the first quarter of 2000 due to lower consumer
and equipment portfolio acquisition activity in the second quarter.
Net finance margin improved to $359.2 million in the second quarter from
$349.1 million for the first quarter of 2000 and $214.4 million in the second
quarter last year. Second quarter net finance margin as a percentage of average
earning assets was 3.53%, down from 3.58% for the first quarter of 2000 and 3.70%
in the second quarter of 1999. The declines were principally due to higher short-term
interest rates and increased borrowing costs.
Non-spread revenues for the second quarter of 2000 were $232.3 million, down slightly
from $238.2 million for the first quarter of 2000, compared to $74.8 million for
the second quarter of 1999. As a percent of average earning assets, non-spread
revenues increased to 2.28% for the second quarter of 2000 from 1.29% last year,
but are down from 2.45% in the first quarter of 2000. The increase from the prior
year reflects the broadened and more diversified revenue sources from 1999 acquisitions.
The decrease from the first quarter reflects venture capital gains of $10.6 million,
down from $37.5 million in the first quarter.
Fees and other income grew to $121.1 million in the second quarter of 2000 from
$20.4 million last year, reflecting syndication and other non-spread revenues
in Vendor Technology Finance and Structured Finance. Gains from equipment sales
were $39.4 million, up $18.7 million over the prior year quarter due to the larger
asset base. Factoring commissions grew 31.7% to $38.2 million over the prior year
period. Securitization gains were $23.0 million, or 9.4% of pretax income during
the quarter.
Salaries and general operating expenses for the second quarter of 2000 totaled
$257.5 million, down $10.7 million from the first quarter of 2000 as we continued
to realize benefits of integration. Accordingly, the efficiency ratio improved
to 43.9% for the second quarter from 46.0% for the first quarter 2000.
Salaries and general operating expenses as a percentage of average managed assets
declined to 2.03% for the period ended June 30, 2000 from 2.15% for the first
quarter of 2000. This compares to 1.66% for the period ended June 30, 1999, reflecting
the effect of our 1999 acquisitions. Second quarter expense levels reflect annualized
run rate savings of approximately $150 million from pro-forma combined pre-acquisition
levels. Headcount was 7,400 at quarter end, down 855 and 250 from year-end 1999
and the first quarter, respectively.
The provision for credit losses was $64.0 million in the 2000 second quarter,
up from $61.6 million in the first quarter of 2000. Second quarter net charge-offs
were $60.7 million, 0.73% of average finance receivables, up from $53.0 million,
0.67%, in the first quarter of 2000. At June 30, 2000, the reserve for credit
losses was $460.3 million, up from $446.9 million at December 31, 1999. As a percentage
of finance receivables, the reserve for credit losses was 1.39% at June 30, 2000
compared to 1.43% at March 31, 2000. The decline reflects changes in portfolio
mix.
Total past dues, as a percentage of finance receivables, declined to 2.80% at
June 30, 2000 from 2.85% at March 31, 2000. Commercial past dues as a percentage
of finance receivables improved to 2.59% at June 30, 2000 from 2.65% at March
31, 2000. Consumer past dues, as a percentage of finance receivables, were 4.33%
at June 30, 2000, relatively unchanged from 4.32% at March 31, 2000. Total managed
past dues, as a percentage of managed financial assets, declined to 3.11% at June
30, 2000 from 3.23% at March 31, 2000.
Goodwill related to the Newcourt acquisition was increased by approximately
$200 million. The adjustment to the original purchase price allocations includes
refinements to the fair value of certain retained interests in the securitized
portfolios, particularly in the trucking industry, as well as additional related
to integration activities. As a result, goodwill, net of amortization, for the
first half of 2000, increased $159.3 million, or 8.6%, from December 31, 1999.
We are extremely pleased with the recognition of being added to the S&P 500
index, which broadens our shareholder base and recognizes the breadth and strength
of CIT
Interpool,
Inc. Signs Definitive Agreement to Acquire North American Intermodal Division
of Transamerica Finance Corporation
PRINCETON, N.J.--(BUSINESS WIRE)--July 28, 2000--Interpool, Inc. (NYSE: IPX) announced
today that it has signed a definitive agreement with Transamerica Leasing, Inc.,
a subsidiary of Transamerica Finance Corporation and AEGON N.V. (NYSE:AEG), to
acquire the North American intermodal division of Transamerica Leasing. Under
terms of the agreement, Interpool will pay approximately $675 million in cash.
The acquisition is being financed through a combination of cash and proceeds from
a committed secured financing facility to be arranged by Salomon Smith Barney
Inc. and Citicorp. North America, Inc. Salomon Smith Barney has also served as
Interpool's advisor in the transaction. The transaction is subject to receipt
of the financing and Hart Scott Rodino approval, and is expected to close before
the end of 2000. The acquisition is expected to be accretive to earnings.
Transamerica
Finance Corporation, a commercial lending and leasing company that manages $16
billion in assets at year-end 1999. Transamerica Leasing, Inc., based in Purchase,
New York, is a leading domestic lessor of intermodal equipment.
Transamerica Finance Corporation was acquired by AEGON in July 1999 as part of
its acquisition of Transamerica Corporation.
Martin Tuchman, Chairman and Chief Executive Officer of Interpool, commented:
"We are extremely excited to have entered into this agreement with Transamerica
Leasing, and to have a management team join us with such a top-notch reputation.
The acquisition of Transamerica's intermodal business, which is highly regarded
in both the transportation and financial services communities, substantially advances
Interpool's goal of becoming one of the country's premier transportation equipment
leasing companies. Through this transaction, we greatly expand our chassis fleet,
broaden our management and customer services teams, and strengthen our financial
resources and technology platform. This should result in significantly enhancing
the services we are able to provide to our customers."
Mr. Tuchman added: "The focus of Transamerica's chassis fleet in the rail industry
perfectly complements our presence in the maritime industry. Furthermore, it also
significantly expands our customer base that can utilize our proprietary Poolstat
software system. The increased utilization of the Poolstat fleet, combined with
its expanded base of equipment, should benefit our existing Poolstat customers.
"
Robert A. Watson, Chairman and Chief Executive Officer of Transamerica Leasing,
Inc., stated: "We are pleased that our North American intermodal business is joining
with Interpool, a company which has a dedication to and focus on this industry.
We are confident that Interpool will build on the success our people have achieved
to date."
Interpool,
originally founded in 1968, is one of the world's leading lessors of cargo containers
used in international trade. Interpool leases its containers and chassis to over
200 customers, including nearly all of the world's 20 largest international container
shipping lines.
Note: This press release and other press releases and information can be
viewed at the Company's website at www.interpool.com.
--30--bk/ny*
CONTACT:
INTERPOOL, INC.
Raoul J. Witteveen President, Chief Operating Officer and Chief Financial Officer
212/916-3261
or
Morgen-Walke Associates Gordon McCoun, Jennifer Angell
contact:
Heather Fox 212/850-5600
