April 27, 2001

CORRECTION

 

-Bancorp Financial Services, owned by Humboldt Bancorp, is Very Much In Business.


Regarding your leasing news report of today, you are clearly irresponsible in your reporting of Humboldt Bank closing Bancorp Financial Services as our law firm just informed you. Bancorp Financial Services is in the process of diluting Some or all of Humboldt Banks interest in Bancorp due to the regulatory issues associated with being part of a bank. Accounting rules dictate that we must be accounted for as a discontinued operation during the course of the dilution/sale as the CFO of Humboldt Bank just informed you. Now I would like to inform you that prior to reporting issues that disrupt business, please know the facts prior to writing headlines that are absolutely bogus. Your retraction of misinformation is anticipated.

Doug Rees

Executive Vice President

Bancorp Financial Services

rees@bancorpfs.com

Yes, we make errors. The New York Times has a whole section devoted to errors they make on a daily basis, as most papers do, and being a one man band who doesn't see too well, there are typo's and errors. We try not to make them, but they happen. We strive to be accurate, but sometimes we are on the "leading edge" of a story. Our batting average has been very good, I hope. Please believe me when I say we have the leasing industry at heart.

Leasing News would like to apologize for confusing the situation with other information we have received. We were not able to reach Kevin Cochrane and took the press release literally. We were working on a story about Bancorp Financial Services at the time. We apologize for our misinterpretation. It was an honest mistake and in no manner was intended to be disrespectful or malicious.

To set the record straight: When Humboldt Bancorp merged with Tehama Bancorp they became the sole owner of Bancorp Financial Services, which Humboldt chose not to retain for many reasons, including capitalization needs and regulatory concerns.

For accounting purposes, they can wind down the operation and take several years to wind down the operation, as Advanta Leasing apparently is doing, or they can list the company for sale and have one year to sell it. Humboldt elected to list Bancorp Financial Services for sale, and for accounting purposes, "... classified BFS as a discontinued operation effective March 31, 2001. Humboldt Bancorp recognized a loss on discontinued operations of $1.1 million, net of tax, for the first quarter 2001 and is reporting its investment in BFS as an unconsolidated subsidiary held for sale."

As reported for Humboldt Bancorp, "Net operating income, which excludes non-recurring charges, for the first quarter 2001 was $2.9 million, an increase of 88% over the first quarter of 2000. The return on average assets and return on average stockholders' equity for the first quarter 2001, based on net operating income, were 1.40% and 16.2%, respectively. Humboldt's reported financial results for prior periods have been restated for the merger with Tehama Bancorp, which was completed on March 9, 2001, and accounted for as a pooling of interests."

Stating again, Bancorp Financial Services is for sale, is in business as an ongoing and operating unit, and we apologize for taking wording of the statement literally.

Kit Menkin, editor/publisher
LeasingNews.org

 

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