Headlines--
Sierra Cities Latest News---Sorry.
United
Capital Laying Off More People---reports say.
Progress
Financial Sells to Sandy Spring National Bank ( both stories )
Wilmington
Savings Fund Gets Out of Auto and Equipment Leasing
( The List will be
up-dated after we complete putting it all in Chronological order. It has grown
too large to read in the current format. editor)
First Sierra and Vertical Net Merger was made on November 6
(http://biz.yahoo.com/e/l/b/btob.html
17.)
The offer and withdrawal rights will expire at 12:00 midnight, New York
City time,
on December 14, 2000, unless extended. It was extended until December
29,2000.
"The extension will provide SierraCities stockholders additional
time to tender shares so that the minimum condition of at least two thirds of
the outstanding shares of SierraCities common stock on a fully diluted basis being
validly tendered and not withdrawn prior to the expiration of the offer may be
satisfied. The extension will provide VerticalNet additional time to obtain a
declaration of effectiveness from the Securities and Exchange Commission with
respect to VerticalNet's registration statement relating to shares to be issued
by VerticalNet in the offer."
Sierra Cities at the end of the day yesterday
was:
$1.68 ( down )
http://www.corporate-ir.net/ireye/ir_site.zhtml?ticker=BTOB&script=200\
Vertical Net was also down: $5.3
http://www.corporate-ir.net/ireye/ir_site.zhtml?ticker=VERT&script=200
This company has a history of
52-Week High $148.38
52-Week Low $7.31
52-Week Change -86.9%
YTD High $148.38
YTD Low $5.3
YTD Change -90.7%
Volume (10-Day Average) 3,505,500
http://www.corporate-ir.net/ireye/ir_site.zhtml?ticker=VERT&script=300
It is rumored that Sierra Cities has been laying off employees in Houston, Texas.
United
Capital
Reported Very Heavy deliquencies; Lehman Brothers continues to
be "unhappy." Especially with" New York Post" story about Bank of America and
the Unicapital problems. With the stock market jittery, at best, financial institution
and their collections and problems are being looked at very strongly. This was
a time of "application only" in an expanding market and "great times." The economy
seems to be changing and bankers are looking for better credits, "relationship
business," and want to see financial statements and tax returns---and personal
guarantees.
Steve Dallas trying to hold it all together, but with the
stock market "up and down," does not look like a Merry Christmas.
Yesterday I included this:
To Think About this Weekend:
Remember
"everything that was old becomes new again"
"History repeats itself"
"Credit is credit"
All that said I'm sure you'll see full disclosure to
be back in vogue very soon. If you have not seen it already. And while credit
scoring works for the consumer going into Best Buy for a big screen TV, I just
do not see it viable for commercial leasing/lending, especially for larger deals.
Recent observation UAEL 1999 conference in Scottsdale everyone was playing golf
& by the pool with funders everywhere. UAEL 2000 conference in Monterey was the
"high tide" for leasing. 2000 conference in Orlando gave the impression that leasing
was somehow Mickey Mouse industry and ended with a tropical storm, which was a
sign of things to come. Now the 2001 conference is in San Antonio, home of the
Alamo. Does that indicate that this could be the last stand for some brokers and
funders? I think the 2002 conference should be at Ft. Riley and titled "Back to
Basics"....Basic training that is! The fundamentals of credit do not change, just
the people asking for and giving out the money.
This was originally sent
in by Rob Yohe,MLOST@aol.com.
I first guessed he did not want his name attributed.
When I printed it "name with held," Rob sent me back an e-mail, " I wouldn't have
sent it in if I didn't own up to putting my name on it."
Dear Kit,
I totally disagree with the writer of "credit is credit". Besides,
what makes him/her think that credit scoring causes one to abandon "full disclosure".
I think the writer expresses the kind of wishful thinking that is far to prevalent
in our industry. They hope that a bout with delinquency will make "credit scoring"
go away. If anything it will strengthen and sharpen the data that is used and
the next generation of scoring systems will be that much the better for it. Then
the credit scoring detractors will no longer be able to use the excuse "We're
not really sure what these systems will do in a down turn" which by the way, is
the dumbest argument I've ever heard against automated scoring. Why is it dumb?
It assumes that credit analysts could actually predict the performance of deals
that they had underwritten 3 years ago. Do these people know how stupid that sounds.
Credit analysts underwrite transactions based on current and historical information.
I would maintain that credit scoring systems do the same. Analysts form biases
toward industries or individuals as conditions start to deteriorate. These show
up in CBR scores, paydex scores, declining bank balances, etc. all manual factors
that should be used to evaluate the "current" risk. Credit scoring systems pick
up the same biases. I can score an applicant today that I scored two years ago.
If their debt has escalated, and their average balance is a "low 4" instead of
a "low 5" the credit score will be negatively impacted. That transaction that
was an approval 2 years ago, may be a decline today. The good thing about a properly
deployed scoring system as opposed to an analyst, is that the scoring system will
give me an unbiased opinion based on the information. In our case the scoring
system will even suggest a "risk level" that still allows me to approve the transaction
but reserve more on the transactions that pose an incremental risk of delinquency.
Those customers that were marginal last year but approvable, would undoubtedly
be declined this year thereby posing no threat to the portfolio.
Credit
scoring doesn't replace analysis, it makes it more objective and efficient. As
soon as Risk Based Pricing is properly deployed in our industry credit scoring
will be the most popular thing since "app only to $150K". Credit scoring will,
however, perform much better than most of the "app to 150" portfolios. The reason
that a lot of folks don't like scoring systems is that they identify clear approvals
and declines. As they are tweaked the "gray area" (more aptly described as the
deals nobody knows what to do with)is narrowed. A lot of people made their living
on gray area deals. That living is now disappearing. No wonder they hate scoring
programs.
I will use credit scoring this year to "retro score" transactions
and identify potential problems. We will then apply the "squeaky wheel" collection
methods to those accounts who pose unanticipated risk when the deal was booked.
I would tell Rob Yohe to keep waiting for "technologically enhanced" underwriting
to go away and see if he can find a crystal ball that will help to pinpoint the
deal that would go bad. That will be one less competitor that I have to worry
about in the future.
Bob Rodi
LeaseNOW, Inc.
drlease@leasenow.com
www.leasenow.com
1-800-321-LEAS(5327)
In Bob Rodi's backyard----
WSFS Announces Plans to Exit the Leasing BusinessAnd
Further Balance Sheet Restructuring
WILMINGTON, Del., Dec. 21 /PRNewswire/
--
WSFS Financial Corporation (Nasdaq: WSFS), the parent company of Wilmington
Savings Fund Society, FSB today announced that its Board of Directors has approved
plans to discontinue the operations of WSFS Credit Corporation, the Company's
indirect auto finance business segment and, as a result, exit the indirect auto
leasing business. Additionally, continuing its strategy started in the 4th quarter
of 1999, WSFS has sold an additional $100 million in below-market-yielding investments
and Mortgage-backed securities (MBS). Proceeds of these sales will be used to
repay higher-cost borrowings.
Management expects these initiatives will
improve future fundamental performance of the Company, reduce its risk profile,
and allow Management to grow and focus on its core community banking franchise.
WSFS plans to take combined charges related to these strategies of approximately
$3.8 million to $4.3 million after tax, or $0.37 per share to $0.42 per share,
during the 4th quarter of 2000.
Discontinued Operations, WSFS Credit Corporation
WSFS Credit Corporation (WCC), the Company's prime automobile leasing subsidiary
will cease taking new applications in January 2001. WCC currently has approximately
7,400 lease contracts and 2,600 loan contracts, representing approximately $210
million in outstandings. WCC will continue to service existing loans and leases
until they mature; it's estimated that substantially all loan and lease contracts
will have matured by the end of December 2003.
WCC, as well as the entire
auto leasing industry, has experienced declining margins in recent years as a
result of a maturing auto lease market and increased competition. This has been
exacerbated in the last two years by a depressed used car market, which has led
to WCC and other industry participants realizing significant losses on the residual
values of vehicles as the leases mature. As a consequence of this soft used car
market, WSFS had announced $4.8 million in additional residual provisions from
the 4th quarter of 1999 through the 2nd quarter of 2000. On an incremental basis,
the leasing business was marginally profitable for WSFS in 1998 and 1999, and
is expected to be unprofitable in 2000, as a result of the large residual provisions.
Further, while the Company believes that these recent high residual losses
are somewhat cyclical, it also has projected that the leasing business for WSFS
over the long-term no longer has the ability to achieve the risk-adjusted return
standards of WSFS. Therefore, the Company has determined it is more economically
advantageous to wind-down the business over the relatively short remaining life
of the existing contracts.
Accounting for discontinued operations of a
business segment requires that the Company forecast operating results and one-time
losses over the wind-down period and immediately accrue any net losses. As a result
of the relatively rapid run-off of lease contracts and associated net revenues,
while maintaining certain fixed costs to service the portfolio, the Company forecasts
approximately $2.5 million to $3.0 million, after tax, in operating losses and
wind-down costs during the 3-year period.
The historic results of WCC's
operations, the one-time charge, and the future reported results of WCC are required
to be treated as Discontinued Operations of a Business Segment, and shown in summary
form separately from results of continuing operations of WSFS in reported results
of the Company.
Further Balance Sheet Restructuring
Also, in the
quarter the Company sold $100 million in lower-yielding investments and Mortgage-backed
Securities (MBS) at an after-tax loss of approximately $1.3 million. Since this
time last year, the Company has sold approximately $285 million in lower-yielding
assets and used the proceeds to pay off higher-cost borrowings. The entire restructuring
strategy, including these most recent sales, has been undertaken in order to improve
WSFS' fundamental return on assets and net interest margin and also reduce the
Company's reliance on wholesale funding and exposure to changes in interest rates.
Both the rapid runoff of the auto finance portfolio and the sale of the investments
will reduce the size of the Company's balance sheet. Management expects to take
advantage of the freed-up capital to allow for growth in the core community banking
franchise and share repurchase activity. Earlier in the 4th quarter, the Company
repurchased 140,000 shares, and has repurchased over 30% of its stock since its
first buyback program began in 1996.
On all of these developments, Marvin
N. Schoenhals, Chairman, President and CEO of WSFS said, "Winding-down the auto
lease business and the sale of the investments, we believe, will not only improve
fundamental performance measures going forward but also will reduce the risk profile
of WSFS as an institution. These are difficult decisions, especially the decision
regarding WCC, which has been an integral, profitable part of WSFS for many years.
However, we recognize that these assets and strategies were not earning, or forecasted
to earn, their required rates of return. We believe these decisions will provide
room for, and allow Management to focus on, improving our core community banking
franchise. We must continually evaluate the businesses we are in and services
we provide, and shift resources out of the lower performers to the higher performers,
or those with prospects for higher returns."
Other 4th Quarter 2000 Expectations
Excluding the losses noted above, WSFS expects 4th quarter earnings per share
to be between $0.41 and $0.45, boosted primarily by continued strong performance
from its reverse mortgage portfolio and improved performance from WSFS' two start-up
joint initiatives: Wilmington National Finance, Inc. (WSFS' sub-prime home equity
dealer) and Customer One Financial Network, Inc./everbank.com (WSFS' venture in
internet-only financial services). WNFI and C1FN/everbank.com, are expected to
lose approximately $0.03 to $0.04 this quarter, improved from a combined $0.06
loss in the 3rd quarter 2000 and $0.09 loss in the 2nd quarter 2000. Further,
non-performing assets of WSFS are expected to improve modestly from the 3rd quarter
2000 levels.
WSFS Financial Corporation is a $1.7 billion financial services
Company. Its principal subsidiary, Wilmington Savings Fund Society, FSB, operates
twenty-eight (28) retail banking offices in New Castle County and Dover, Delaware,
as well as Chester, Delaware, and Montgomery Counties in Pennsylvania. Other operating
subsidiaries include WSFS Credit Corporation; Wilmington National Finance, Inc.;
CustomerOne Financial Network, Inc.; and 838 Investment Group, Inc. For more information,
please visit our website at www.wsfsbank.com.
This release contains forward-looking
statements, within the meaning of the Private Securities Litigation Reform Act,
that involve risk and uncertainty. It should be noted that a variety of factors
could cause actual results to differ materially from the anticipated results or
other expectations expressed in the Company's forward-looking statements. The
risks and uncertainties include, but are not limited to, the growth of the economy,
interest rate movements, timely development of technology enhancements for its
products and operating systems, the impact of competitive products, services and
pricing, customer-based requirements, Congressional legislation, regulations,
estimates, and similar matters. Readers of this release are cautioned not to place
undue reliance on forward-looking statements which are subject to influence by
the named risk factors and unanticipated future events. Actual results, accordingly,
may differ materially from management expectations. WSFS Financial Corporation
does not undertake and specifically disclaims any obligation, to publicly release
the result of any revisions that may be made to any forward-looking statements
to reflect the occurrence of anticipated or unanticipated events or circumstances
after the date of such statements.
SOURCE WSFS Financial Corporation
CO: WSFS Financial Corporation; WSFS Credit Corporation; Wilmington National Finance,
Inc.;
Customer One Financial Network, Inc./everbank.com
ST: Delaware,
Pennsylvania
IN: FIN
Sandy Spring National Bank to Acquire Leasing Company
Kropschot
Financial Services initiated this transaction and served as exclusive
financial advisor to Progress Financial Corporation.
OLNEY, Md., Dec. 21 /PRNewswire/ -- Sandy Spring National Bank of
Maryland, a subsidiary of Sandy Spring Bancorp, Inc. (Nasdaq: SASR),
announced today that it has reached an agreement to purchase certain
assets of The Equipment Leasing Company (ELC) located in Sparks,
Maryland. ELC is a division of Progress Leasing Company headquartered
in Blue Bell, Pennsylvania. The acquisition, subject to regulatory
review, is expected to be completed by the end of January 2001.
Hunter R. Hollar, President and Chief Executive Officer of Sandy
Spring Bancorp, stated, "The acquisition of ELC meets our strategic
initiatives of expanding our revenue base, diversifying our income
sources and enhancing our available financial services for small
to medium sized businesses."
ELC has been in business for over twenty years originating and brokering
leases for small to medium sized businesses primarily in the mid-Atlantic
region. Their leases provide financing for essential business equipment
such as computers, network systems, office furniture and design
systems, and communication equipment. In the acquisition, Sandy
Spring National Bank expects to acquire approximately $30 million
in lease receivables. The Equipment Leasing Company will continue
to be managed by its current president, Dennis M. Horner and its
17 employees will join the bank's approximately 470 existing employees.
Sandy Spring Bancorp is the bank holding company for Sandy Spring
National Bank of Maryland, which currently has twenty-nine financial
services offices in Montgomery, Howard, Prince George's and Anne
Arundel Counties in Maryland. At September 30, 2000, Sandy Spring
Bancorp had consolidated assets of approximately $1.7 billion, deposits
of $1.2 billion, and stockholders' equity of $115 million.
SOURCE Sandy Spring Bancorp, Inc.
CO: Sandy Spring Bancorp, Inc.; The Equipment Leasing Company
ST: Maryland, Pennsylvania
rogress Financial Corporation Announces Sale of Equipment Leasing
Division
The Full Announcement
BLUE BELL, Pa., Dec. 21 /PRNewswire/ -- Progress Financial Corporation
(Nasdaq: PFNC) ("PFC") announced it has reached an agreement to
sell certain assets of the Equipment Leasing Company (ELC) to Sandy
Spring National Bank, a subsidiary of Sandy Spring Bancorp, Inc.
(Nasdaq: SASR). ELC, located in Sparks, Maryland, is the Maryland
Division of Progress Leasing Company, a wholly owned subsidiary
of PFC. The sale, subject to regulatory approval, is expected to
be completed by January 31, 2001. The company expects to recognize
a pre-tax profit on the sale of approximately $1.7 million subject
to adjustment based on the portfolio at closing. The announcement
was made today by W. Kirk Wycoff, President and CEO of PFC.
According to Wycoff, the sale of ELC is part of PFC's strategy to
consolidate its leasing operations in Pennsylvania where there is
synergy with existing Progress Bank lending clients and also to
keep PFC in compliance with OTS regulatory limits on the level of
leasing assets allowed for a federal thrift.
ELC has been in business for over twenty years originating and brokering
leases for small- to medium-sized businesses primarily in the mid-Atlantic
region. Their leases provide financing for essential business equipment
such as computers, network systems, office furniture and design
systems, and communications equipment. In the acquisition, Sandy
Spring National Bank expects to acquire approximately $30 million
in lease receivables. The Equipment Leasing Company will continue
to be managed by its current president, Dennis M. Horner, and its
17 employees will join the bank's approximately 470 existing employees.
Wycoff also indicated that the Company will add an additional $1.2
million to its loan loss reserves during the fourth quarter of 2000.
This additional provision is due to market conditions which it believes
may impact the loan portfolio at its subsidiary, Progress Bank.
Although PFC has not experienced a significant growth in non-accrual
loans, it believes it is appropriate to bolster its reserve ratios
at this time. The combination of the ELC sale and the additional
provision for loan losses will increase PFC's ratio of reserves
to loans to in excess of 1.30%.
About Progress Financial Corporation (PFC)
Progress Financial Corporation is a unitary thrift holding company
headquartered in Blue Bell, Pennsylvania. The business of the Company
consists primarily of the operation of Progress Bank, which serves
businesses and consumers through sixteen full-service offices. The
Company also offers a diversified array of financial services including
equipment leasing through Progress Leasing Company, with offices
in Blue Bell, Pennsylvania, and financial planning services and
investments through Progress Financial Resources, Inc., headquartered
in Philadelphia, Pennsylvania; and asset based lending through Progress
Business Credit. In addition, the Company also conducts commercial
mortgage banking and brokerage services through Progress Realty
Advisors, Inc. with locations in Blue Bell, Pennsylvania; Richmond
and Chesapeake, Virginia; Woodbridge, New Jersey; and Raleigh, North
Carolina. The Company also receives fees for the construction and
development of assisted-living communities through Progress Development
Corporation; venture capital activities managed by Progress Capital
Management, Inc.; and financial and operational management consulting
services for commercial clients through KMR Management, Inc. located
in Willow Grove, Pennsylvania. The Company's common stock is traded
on the Nasdaq Stock Market, National Market under the Symbol "PFNC".
About Sandy Spring Bancorp
Sandy Spring Bancorp is the bank holding company for Sandy Spring
National Bank of Maryland, which currently has twenty-nine financial
services offices in Montgomery, Howard, Prince George's and Anne
Arundel counties in Maryland. At September 30, 2000, Sandy Spring
Bancorp had consolidated assets of approximately $1.7 billion, deposit
of $1.2 billion, and stockholders' equity of $115 Million.
SOURCE Progress Financial Corporation
CO: Progress Financial Corporation; Equipment Leasing Company; Sandy
Spring National Bank;
Sandy Spring Bancorp, Inc.
ST: Pennsylvania, Maryland
IN: FIN
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