Pictures from the Past---1996---Alan J

Forrest Financial Corporation announced the addition of Alan J.Zeppenfeld as their new Senior Vice-President of Operations. Zeppenfeld, a former UAEL board member, brings 22 years of leasing experience and long history of UAEL involvement to the position.”

“After finishing my MBA in 1973, I answered an advertisement in the Cleveland paper and became the Equipment Order Entry Manager for the Cleveland Branch of Xerox. Things were great then, everyday was exciting and rewarding, and I was very proud to be a Xeroid.

“But there was one thing that was always in the back of my mind. Our office was on the 6th floor, and on the 7th floor was US Leasing. The more I talked to the US Leasing people in the elevator every morning, the more I wondered whether I really wanted my career to be one floor up.

“Life has a habit of forcing or eliminating decisions, and after becoming Controller in Cleveland, then Region Credit Manager in Arlington, Virginia my thoughts about leasing were filed somewhere in the back of my mind. Two years later, I got an opportunity to be with a new Xerox division in a great city, Atlanta. This was it, I was where I wanted to be doing what I wanted to do. But, nothing is constant but change, and two years later, the big X combined it's two divisions and we had too many people for the number of jobs available. I really wanted to stay in Atlanta, but the opportunity offered was in Kansas City, so I packed up the family and off we went to find Dorothy, Toto and Auntie Em. As was typical then, after two years it was time to change again, and Xerox moved to headquarters in Rochester, NY. I went there with a fierce determination to disprove the statement that "living in Rochester" was an oxymoron.

“I hit Rochester full force, and became a very busy person. At Xerox I was the Manager of Asset Control, in our suburb I got active in politics, and in my spare time I started restoring collector cars. The car hobby became a second business and my wife Diane and I opened AutoZest Gallery, an automotive art and automobilia boutique.

“Xerox started a program called the Partnership Asset Strategy that sold off the rental machines and revenue streams to major funders and leasing companies. My second assignment in Rochester was to manage the operation of that program, and my contact with the leasing industry resumed. Then in the early 1990's our senior vice president had thoughts of starting a major administrative outsourcing business. It seemed only natural that since we were world class in administration and had ties with the leasing industry that we go into "leasing administration". We changed the name of my department to Third Party Leasing Administration and I set out to find some customers. After getting the first two contracts signed and the services implemented, senior management was convinced that there was really a business there and "Xerox Administrative Services" came into being.

“Then in 1995, our senior vice president abruptly retired, his replacement didn't believe in outsourcing as a business opportunity, and I got introduced to a whole new experience in a big way….downsizing. Many articles have been written about how Xerox invented and started great things, and then gave them up. And, the business news and stock market are clearly showing how a giant can fall, so I won't take up any more time on Xerox here. “

"Zep" became Director of Leasing for the Retail Solutions Division of NCR Corporation.

At last report, he was pursuing his hobbies in automobile racing,

plus looking for steady employment. He has covered news events

for Leasing News, too.

-----------------------------------------------------------------------------------

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Economic Events the Week Before Xmas

December 16

MONDAY

-- Bankruptcy court hearing on WorldCom Inc.'s proposed compensation plan for incoming chief executive Michael Capellas.

December 17

TUESDAY

-- Labor Department reports on consumer price index for November.

-- Commerce Department reports on housing starts for November.

-- Federal Reserve reports on industrial production for November.

December 18

WEDNESDAY

-- Commerce Department reports on international trade for October.

December 19

THURSDAY

-- The Conference Board releases its Index of Leading Economic Indicators for November.

-- Treasury Department reports on the federal budget for November.

December 20

FRIDAY

-- Commerce Department reports on third-quarter gross domestic product. Source: Associated Press

________________________________________________________________

PinnLease ex-worker admits she lied to jury

SAN DIEGO UNION-TRIBUNE

A former employee of defunct PinnFund USA, a Carlsbad mortgage lender that imploded in March 2001 when regulators uncovered a $300-million pyramid scheme,has pleaded guilty to lying to a federal grand jury.

U.S. Attorney Carol Lam said Kimberly Hulihee admitted that she provided false testimony on Nov. 14 to a federal grand jury investigating the removal of files and other materials from a PinnFund subsidiary – PinnLease USA Inc.

Hulihee, 38, was the former office manager of PinnLease, and later a company linked to former PinnLease President Tommy Larsen called Aloha Pacific Leasing.

When the Securities and Exchange Commission filed a sweeping civil lawsuit against PinnFund in March 2001, documents and other assets were removed from the Carlsbad headquarters building, according to federal regulators.

Prosecutors said Hulihee lied about whether she had been directed to remove materials from PinnFund by a particular individual, whether she directed others to help her remove materials and whether she and others had informed the individual who ordered the removal of materials about their removal.

She also admitted providing false testimony about whether she and others destroyed the removed materials.

Perjury carries a maximum penalty of five years in prison and a $250,000 fine, although under mandatory sentencing Hulihee would likely receive a lighter sentence. She is cooperating with authorities, according to prosecutors.

Hulihee is the second person to plead guilty to criminal charges in the PinnFund fraud. Former PinnFund chief executive Michael Fanghella also has admitted to myriad federal charges. He is cooperating with authorities and remains behind bars in the Metropolitan Correctional Center in San Diego awaiting sentencing.

Larsen faces a pending civil suit related to the PinnFund fraud but no criminal charges, according to court documents.

-----------------------

The Receiver in the case filed a lawsuit against Tommy Larsen, related companies and a law firm, in bankruptcy court. It's a preference that may climb to $6.7 million. Larsen denies it all, and says, "prove it!" He was found not guilty

of contempt charges.

http://two.leasingnews.org/archives/June01/6-04-01.htm

Full “tabloid” story:

http://www.leasingnews.org/docs/Pinn_1.htm

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ELA Management Conference & Exhibition

For nearly 20 years, ELA's Equipment Management Conference & Exhibition, scheduled for January 26-28, 2003 at the Westin La Paloma Resort in Tucson, Arizona, has been the #1 event for asset managers, remarketers and appraisers to review the hottest issues affecting the industry, while providing the unmatched opportunity to network with their industry peers. This year's conference theme, "Economic Recovery: Oasis or Mirage?" reflects the still uncertain equipment marketplace. Issues discussed include: what's ahead for residual values and remarketing of assets in 2003; implications of accounting rule changes for the industry; what's hot and what's not in selected equipment markets; test your skills at a "live" inspection of construction equipment; and multiple sessions for the seasoned and newly hired equipment manager.

For complete details and to register, or to download a PDF file of the conference brochure, go to: http://www.elaonline.com/events/2003/equipmgmt/

A special rate of $255 single/double is offered to attendees staying at the Westin La Paloma Resort. To ensure that you have a reservation, please contact the hotel directly at (520) 742-6000, before the cut-off date of Monday, January 6th, 2003. After this date, you may be subject to pay for the same room at a higher rate.

For complete details and to register, or to download a PDF file of the conference brochure, go to: http://www.elaonline.com/events/2003/equipmgmt/ , or email Janet Fianko at jfianko@elamail.com for the brochure to be mailed to you.

Look forward to seeing you at this premier event!

Lauren Hill

Chair, Equipment Management Committee

Deloitte & Touche

( note this is open primarily to ELA members, members in the process of joining,

and ELA has a policy of allowing attendance on one event per year for a non-member.

editor).

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Next Streamlined Sales Tax Project Meeting

The Streamlined Sales Tax Project (SSTP) will meet at the Hyatt Regency Tampa (Downtown), located at Two Tampa City Center on Thursday and Friday, Jan. 23-24, 2003 in Tampa, Florida. The agenda is still being developed. At this point, the agenda calls for an educational session on telecommunications issues on Thursday morning. There may be an educational session on digital property issues on Thursday afternoon, but this is not firm. If not, there will be subgroup meetings. There will be subgroup meetings on Friday morning and early Friday afternoon. There will also be a Project meeting on Friday afternoon. The session will begin at 8:30 am each day and conclude by 4:00 pm on Friday.

The deadline for making reservations at the Hyatt is Friday, December 20, 2002. To make reservations, call 813-225-1234 or 800-233-1234. Be certain to ask for the Federation of Tax Administrators Streamlined Sales Tax room block. The rate is $93 single/$118 double.

You may register for the meeting online at http://www.taxexchange.org/meet/0103sales.taf

Please contact SSTP Co-Chair Diane Hardt at dhardt@dor.state.wi.us or Harley Duncan of the Federation of Tax Administrators at harley.duncan@taxadmin.org if you have questions about the meeting.

Dennis Brown

DBROWN@ELAMAIL.COM

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NAELB Now 489 Members!!!

National Association of Equipment Leasing Brokers

“Success by Association”

5024-R Campbell Blvd.

Baltimore, MD 21236

Phone: 800-996-2352

Fax: 877-875-4750

From: Bill Miller, CAE

Executive Director

re: Membership Dues

Enclosed with this correspondence please find an invoice for you4 2003 membership investmentin the National Association of Equipment Leasing

brokers(NAELB). The NAELB Board voted at a recent Baord Meeting to hold

membership dues at their current levels. This is significant in that this is the sixth consecutive year that dues in NAELB have not increased. We believe that membership in NAELB represents the very best value available in the industry

today.

The membership of NAELB continues to grow with members doing over 2 billion

dollars in leasing volume. In 2002 the membership in NAELB increaed over 27% by adding over 104 members. Second in size only to ELA, the NAELB is the largest national trade group focusing on the needs of independent equipment leasing brokers. NAELB was formed to focus exclusively on the challenges, needs, goals and opportunities of you, the independent broker. Founded by brokers, for brokers, the NAELB today remains focused on that unique mission. It’s precisely that razor-sharp focus that’s allowed NAELB to grow and flourish year after year.

With a strong NAELB, the services listed below will continue to grow:

* Instant internet access to 489 members through the leasing forum, an integral part of the NAELB Website

* Special rates for credit bureau information

* Overnight discount envelope program

* Legal help and advice through the NAELB counsel.

We look forward to your continued support of the Equipment Leasing Industry through membership in NAELB. Please allow us to be of service

############### ###################################

Fitch 2003 Homebuilder Outlook: Growth in Profits & Cash Flows

Fitch Ratings-New York-: Housing continued to thrive throughout 2002, offering a real surprise in light of the expectations for a sluggish economy and flat to slightly lower residential activity. A pattern of growth, rising home sales and improving financials has continued for the past few years. Major homebuilders have benefited from the good market conditions, but also from their advantages of size. Typically builder cash flows improved as did credit metrics this year. Despite moderately lower residential construction activity forecast for 2003, Fitch anticipates further growth in builder profits and cash flows and some improvement in credit ratios. Consolidation in the industry continues. That theme potentially could be more pronounced in 2003 and, if so, asset combinations could stress some companies' balance sheets.

The Year In Review

Housing had another up year in 2002. Many experts were expecting flattish to slightly lower residential activity entering the year. However, housing starts and new home sales should end 2002 up 4.5% and 6.7%, respectively. Existing home sales should rise 4.2% to 5.52 million. This high level of activity occurred despite a trend of eroding consumer confidence and often lower employment statistics. Demographics and liberal lending standards have boosted demand. With a lackluster stock market, the attraction of housing as an investment has also spurred demand. But most important, mortgage rates were low entering the year and moved even lower during the second half of 2002. For the most part public homebuilders continued to report healthy revenue, margin and profitability gains, with the exception of certain companies over-weighted in California. Return ratios continued to improve, as did credit ratios. There were no ratings downgrades for the homebuilders in 2002. Ratings were affirmed for a number of builders and the Rating Outlook for M.D.C. Holdings was recently changed to Positive from Stable.

The Year Ahead

Most measures of housing activity should be moderately lower in 2003, principally because Fitch expects the U.S. economy to be somewhat more robust than in 2002, despite potentially a sluggish war affected first quarter. This would likely prompt the Fed to raise short-term interest rates. Fitch anticipates an overall modest expansion in long-term rates (including the fixed-rate home mortgage) over the course of the year. Employment growth, stronger income growth, probably rising consumer confidence and, of course, favorable demographics should largely counterbalance the higher mortgage rates. Weaker economic growth or even a return to recession in 2003 would have a somewhat greater negative impact on housing, partially because of the potential for lenders to tighten qualification standards as mortgage delinquencies and foreclosures accelerate.

Fitch's home sales forecast is 1.64 million, off 2.4%. The single family and multi-family starts targets are 1.31 million (down 2.2%) and 0.33 million (off 2.9%). Existing home sales could slip 3.0% to 5.43 million.

In 2003 the major public homebuilders should be able to grow market share and generally more than offset sluggish national industry trends. These companies are typically in the stronger metropolitan markets and are well positioned from a land perspective within those markets. These builders are also focused on the hotter market segments - entry-level and first-step trade-up. Those companies with exposure in California will benefit from the ramp-up in new order activity as 2002 progressed. A number of these large companies will benefit from the acquisitions of 2002 that will anniversary later in 2003. Also, the relative advantages of the major homebuilders should continue to be evident: cheaper access to capital, better access to labor and restricted land supplies, buying efficiencies, product flexibility and some technological benefits.

It is unlikely that the public builders will allow their financial ratios to meaningfully deteriorate over the next year. More likely ratios will improve. Consequently, there is potential for ratings upgrades. In general builders are keenly focused on at least maintaining, if not improving, their debt ratings. Fitch notes that these builders have a larger amount of discretion in managing their capital structure due to the nature of their business. Of course, there is always potential risk that a builder could take on a large acquisition (or acquisitions) that does not mesh and/or has high exposure to a meaningfully deteriorating local or regional market.

Fitch does not believe there is a national home price bubble. Nationally home prices are likely to continue to rise in 2003, but not as rapidly as during the last few years. Prices have advanced very sharply, and faster than peoples' incomes in certain metropolitan markets. This situation has happened in the past and, depending on their local economies, prices could back off in 2003.

Contact: Robert Curran 1-212-908-0515, New York or Mark Oline 1-312-368-2073, Chicago.

################# #########################################

A look at Conseco Inc.:

By Associated Press

A look at Conseco Inc.:

Current total employment: About 13,000

Major operations:

Carmel, Ind.: corporate headquarters and home to life insurance operations, annuity operations, Conseco Capital Management and Conseco Risk Management; 3,348 employees as of December 2001.

Chicago: Bankers Life and Casualty; 1,651 employees.

Rockford, Ill.: major medical operations; 454 employees.

Philadelphia: Conseco Direct Life Insurance Co. and Conseco's direct marketing organization; 437 employees.

St. Paul, Minn.: Conseco Finance Corp.; 1,160 employees.

Rapid City, S.D.: Conseco Finance Corp.'s manufactured housing division; 2,567 employees.

Tempe, Ariz.: Conseco Finance Corp.'s consumer finance division; 3,501 employees.

Financials:

Total assets as of Sept. 30: $52 billion.

2001 revenue: $8 billion, ranking Conseco No. 239 on 2002 Fortune 500 list of U.S. companies.

Total losses, first three quarters of 2002: $6 billion

Source: Conseco Inc.

---------------------------------------------------------------

A look at Conseco Inc.'s history

By Associated Press

A history of Conseco Inc.:

1979: Stephen Hilbert and David E. Deeds found Security National of Indiana Corp., predecessor of Conseco.

1983: Security National buys Consolidated National Life Insurance Co.; company changes its name to Conseco Inc.

1986: Conseco shares begin trading on New York Stock Exchange.

1988: Co-Chief Executive Deeds departs, leaving Hilbert as president and sole CEO.

1996: Conseco named to Fortune 500 following several acquisitions.

1998: Conseco shares reach all-time high of $58; Conseco buys Green Tree Financial for $6 billion in a deal that leads to heavy losses.

April 2000: After earnings fall far below expectations and debt reaches $8.2 billion, Hilbert resigns under pressure along with chief financial officer Rollin Dick.

June 2000: Gary Wendt replaces Hilbert, announces turnaround plan to reduce debt.

Aug. 9, 2002: Wendt abandons turnaround plan after cutting $2 billion in debt, begins restructuring talks with creditors.

Oct. 3, 2002: Wendt resigns as chief executive but remains as board chairman while restructuring talks continue. He is replaced by William Shea.

Nov. 19, 2002: Conseco posts quarterly loss of $1.8 billion, says it will file Chapter 11 bankruptcy if it can reach agreement with creditors.

--------------------------------------------------------------------------------------------

Few businesses/leasing companies signing up for tax break

Kathleen Pender

San Francisco Chronicle

In its economic stimulus bill passed in March, Congress gave business a tax break that was supposed to unleash a capital spending boom.

Called bonus depreciation, it lets companies that buy capital assets -- such as computers, delivery trucks and factory equipment -- write off an extra 30 percent of the purchase price in the first year.

When it passed, Sen. Larry Craig, R-Idaho, predicted that the bill -- which also provided an extra 13 weeks of unemployment benefits -- could transform "an economy that is recovering into a roaring recovery."

Did bonus depreciation work?

Not that I can tell.

Economists say you can't measure the impact of tax breaks until years after they take effect. Even then, it's hard to isolate them from other factors in the economy or gauge what would have happened without them. In short, it's hard to say if they do any good.

What you can say is that business spending is in the toilet.

In the first three quarters of 2002, capital spending was $3.35 trillion, down from $3.66 trillion in the same period last year and $3.79 trillion in the same period of 2000, according to the Bureau of Economic Analysis.

"We've entered the ice age of capital investment," says Ned Riley, chief investment strategist with State Street Global Advisors. "We're just frozen."

For months, Riley has been predicting a fourth- quarter spurt in tech spending as companies rush to buy gear before the year's end so they can lock in a bigger tax deduction for 2002.

When I called tech companies to see if they or their customers were taking advantage of bonus depreciation, their spokespeople said, "Bonus what?"

"For reasons we can't quite understand, it hasn't taken hold," says Caroline Graves Hurley, tax counsel with the American Electronics Association, which lobbied hard for bonus depreciation.

HOW IT WORKS: The bonus applies to assets bought between Sept. 11, 2001, and Sept. 10, 2004, and placed into service by Jan. 1, 2005.

Suppose a company buys a $1,000 computer, which is depreciable over five years. (Different assets have different depreciation schedules, based on their expected lives.)

Typically, a company could write off 20 percent, or $200, the first year.

With bonus depreciation, it could write off 30 percent (or $300) plus 20 percent of the remaining $700 (or $140) for a first-year deduction of $440.

If the company is in the 35 percent tax bracket, it saves $154 with bonus depreciation, versus $70 without.

Under either scenario, the company can deduct a total of $1,000 over five years. The bonus doesn't give additional depreciation, it just speeds it up.

Many states, including California, did not conform to the federal tax break because it would have cost them too much.

Bonus depreciation doesn't reduce a company's reported earnings. It only affects its tax books, not the books it keeps for shareholders.

If a company is losing money and not paying taxes, it generally can't take advantage of bonus depreciation. The same is true for profitable companies that have so many other tax breaks they don't pay taxes.

However, if a company isn't paying taxes, but did pay them in any of the past five years, it might be able to take advantage of the additional depreciation by carrying back its loss to earlier, profitable years and claiming a tax refund, says Glenn Mackles, a partner with Deloitte and Touche.

WHY IT'S NOT WORKING: One reason the bonus has limited appeal is that many companies aren't paying taxes.

Another explanation is that companies have until September 2004 to take advantage of it.

Companies may be "strategically waiting until the very end of that window," says Hurley.

The biggest reason is that businesses bought too much capital equipment in the late 1990s and have way more than they need.

"People talk about the stock market bubble. We really had an investment bubble," says James Strnad, an economist and law professor at Stanford's business school.

Who needs to buy a new server when you can get a slightly used one at a dot- com auction for one-tenth the cost?

Businesses won't buy more until what they have wears out, becomes obsolete - - or until demand picks up enough up to warrant added capacity.

Before that, investment tax incentives are not likely to help and could hurt.

"To encourage people to buy more equipment when there is too much doesn't make sense to me," says Strand.

EXPANDING THE BONUS: Nevertheless, when Congress meets in January to work on a new economic stimulus package, one proposal it will debate is beefing up bonus depreciation.

In a letter to President Bush, the National Association of Manufacturers wrote, "While it is still too early to gauge the full benefit of this temporary provision, it is clear that, to be an effective catalyst for economic growth, the bonus depreciation should be increased from 30 to 60 percent and extended for a minimum of two more years."

Dorothy Coleman, the association's vice president of tax policy, says bonus depreciation needs more time to work its magic.

"It's only been around for eight months," she says.

Coleman says that a major plant expansion can take years to plan and build and that ending the bonus in 2004 is a disincentive.

But many economists say extending the deadline will cause companies to delay their purchases even longer. By 2006, the tax break could be wasted on companies that would have bought equipment without an incentive.

Even worse, it could choke off the economy. "We might be steaming along at full employment. If you have additional stimulus pushing up demand (to stem inflation), you either raise interest rates or tighten the money supply, which could abort the recovery," says Len Burman, a senior fellow with the Urban Institute.

Burman, and many Democrats, favor tax goodies that give money to those most likely to spend it. Options include extending unemployment benefits and granting a "payroll tax holiday."

The Business Roundtable, a group of big-company CEOs, has proposed exempting the first $10,000 of income from Social Security and Medicare taxes next year. These payroll taxes amount to 12.4 percent of wages, split evenly between the employer and employee.

The tax holiday would give $620 to each employee making at least $10,000, and an equal amount to his or her employer.

The government would reimburse the Social Security trust fund from general revenues.

Unlike a cut in marginal tax rates, which only helps people who earn enough to pay taxes, a payroll tax holiday would give money to every working American,

including low-income ones most likely to spend it. It would also start pumping money into the economy immediately.

Many economists -- and business groups -- say the best way to stimulate business investment is to increase end-user demand.

To that end, the Business Roundtable also favors speeding up cuts in marginal-tax-rate cuts that were supposed to take effect in 2004 and 2006 into 2003. It also wants to make stock dividends tax-free to investors. It does not endorse expanding bonus depreciation.

"Right now, there's no demand for what businesses are producing. If you give them incentives to invest more, all it will do is create more overcapacity," says Vince Randazzo, the roundtable's director of public policy.

Of course, stimulating consumers -- whose closets, garages and second homes are overflowing -- has its own problems.

"Consumers are out on the edge. They have borrowed so much and saved so little. If anything, they need a cut in consumption," says Strnad.

Extending unemployment benefits or cutting payroll taxes may produce an immediate stimulus, but it provides no long-term incentive for employees to become more productive.

Strnad and Burman say there's a case to be made for doing nothing -- letting the economy work out its excesses without adding stimulus that could come back to bite. But of course, they're not running for election in two years.

------------------------------------------------------------------------

Steve Geller, CLP

Leasing Solutions LLC

20 Dike Drive

Wesley Hills,

New York 10952

"Assisting lessors and brokers in finding funding for "out-of-niche" transactions"

Very reasonable rates

No obligation if transaction is not approved. Call:

Office: (845) 362-6106

Fax: (845) 354-2803

Cell: (914) 552-0842

Check my website:

www.leasingsolutionsllc.com

Providing Solutions to the Equipment Finance Industry...

------------------------------------------------------------------------------------

Dialing for Dollars

Financial Institution Consulting

=====================================================

Last year, at the end of December, we wrote a newsletter on an observation

that bears repeating. At this time of year, we can almost feel the slowdown

in sales emphasis occurring at most U.S. and European banks focusing on the

small business or lower end middle market. In fact, we think the end of the

year can be a great time for marketing.

CALLING FOR CHRISTMAS

In particular, the week between Christmas and the New Year is notoriously

slow in both the banking community and the overall business world. Many

bankers choose this week to take their vacations and assume that their

customers are doing the same.

Depending on the customer, this is a very incorrect assumption. In fact,

many small business owners view this week as an oasis of calm within their

stormy year. They are in their offices when most employees are not, and they

feel relatively relaxed and less time pressured. With those business owners,

bankers should view the Christmas-New Years week as a significant marketing

opportunity.

At the end of last year, we spoke to a senior manager at a bank we view as

one of the best at serving the small business market. He was in the process

of executing a post-Christmas/pre-New Year marketing strategy. He told his

bankers that during the Christmas/New Years week they should be stepping up

the effort to call and visit customers who are in their offices.

This manager also believes, and rightly so, that it is unlikely that any

other bankers will be calling during this week, allowing his bankers to

stand out from the pack. This approach is a good indication of the

customer-focus and sales creativity of this group and one approach leading

to differentiation with the customer.

To put it more bluntly, basically, if your sales people are not on vacation

during this week, what value are they offering to management if they are not

out in front of customers? If you do not have a Christmas week calling

program, why not?

Of course a Christmas week calling program needs to be set up right now. In

some cases customers will know their schedules and in others it will be a

matter of the banker checking in during the holiday week to see if the

business owner is at work. Oftentimes, business owners do not have the

luxury of knowing their vacation schedules well in advance. Even leaving a

voice mail during the Christmas week (when voice and e-mail messages sharply

decline in number) can show your bank's interest and differentiate you from

the pack.

CALLING FOCUS

Obviously, an end of year call allows bankers to inquire about the prior

year's performance and expectations for 2003. That naturally leads to a

discussion of credit and non-credit related product requirements and

possibilities over the next 12 months. The volatility and lack of certainty

that many businesses feel should be viewed as presenting more, rather than

fewer, bank opportunities.

The slower pace of the holiday week may also offer the banker the benefit of

greater reflection on the part of the owner and provide the banker with the

extra time required to break down barriers that salespeople often face.

CALLING FOLLOW-UP

Of course, the value of the call is lost without follow-up. Effective

probing during this call should result in the salesperson developing a

diagnostic concerning likely product opportunities and the timing of those

potential sales. For example, the banker may learn that the owner's cash

flow becomes tight in a certain month or that he is giving his bank another

month or two to fix some recurring operational problems.

In effect this call sets up his phone call schedule to the customer for the

next year.

CALLING LIKE CRAZY

The same senior banker who instituted the Christmas week calling program

also commented that his sales force "calls like crazy." In our experience

this phrase still cannot be used about too many bankers. But, in the last 12

months this situation is changing and changing rapidly. We see the best

banks breaking down the organizational and cultural barriers to effective

selling. The old constraint of "this is how we do things here" is losing out

to "this is how we better start doing things, if we want to succeed long

term."

Banks are making the important choices about the segments to serve and how

best to serve them. The "see and spray" sales approach is losing out to

targeted marketing with sales energy being aligned against customers with

demonstrable potential.

We'll avoid the obvious seasonal comments about poor performing bankers

getting coal in their stockings. We would rather emphasize the rewards and

success that can result from bankers who try approaches that others dismiss

and are in front of customers when their competitors are in lines exchanging

gifts.

FINANCIAL INSTITUTIONS CONSULTING, INC.

475 Fifth Avenue, 19th Floor

New York, NY 10017

212-252-6700

www.ficinc.com

======================================================

FIC NOW OFFERS A ONE-DAY SEMINAR/BRAINSTORMING SESSION ON STRATEGIES OF

BUSINESS BANKING. This workshop, specifically tailored to address your

bank's needs, focuses on the issues and topics of critical importance to

small business bankers, including: customer's needs and desires, customer

profitability and retention, segmentation, cross-sell, deposit gathering,

and priorities for success. For more information, click on the link below

or e-mail mharvey@ficinc.com

http://www.ficinc.com/Workshop/biz_banking_workshop.htm