Next Thursday---LIVE at 1pm, California Time


Michael Meacher, President, National Association of Equipment Leasing Brokers


“ Meet the Leasing News Maker”




Kit Menkin’s Leasing News Thursday, January 17 ,2002


Headlines----Eastern Association of Equipment Leasing Lessors Membership Up 7%

                        eLNA Nominates & Orix for Web Award

                         Smart Online Selects NCB Capital, alliance with Republic Leasing

                          BancWest Earnings Rise 13.0% for 4th Quarter, 17.8% for Full Year 2001

                      RISConsulting Launches Aircraft Risk Management Internet Portal

                    Compaq had strong quarter

                    Key Equipment Finance Names James W. Mignogna Sr. VP/Nat. Sales Mgr.

                     Fed nationwide survey finds expectations for midyear recovery

                  US Bancorp Reports 4th Quarter Earnings


               Thursday---Odds and Ends


### Denotes press release




Eastern Association of Equipment Leasing Lessors Membership Up 7%


EAEL had 228members at December 31, 2001. This number is net those companies that exited leasing in 2001


Alison Pryor


( June, 2001, EAEL had 213 members.

Leasing News is working on an up-date of the Association page

and dues, benefit comparison. )

__________________________________________________________________ and ORIX Financial Services Nominated

for eLNA Web Award


The eLessors Networking Association ( eLNA), formed the first of the

year as a leasing association, formerly ( now for sale) to award its 2002 Web Award to the ( and ORIX Financial Services (


John O. Semon, eLNA chairman, said, "The eLNA Web Award will be presented at our annual technology conference to the company nominated and voted by our membership as having the most dynamic and content relevant website serving the equipment leasing industry, John O. Semon, eLNA Chairman, founder, president of and Jurastic Group in Atlanta, Ga, said. “ I am pleased to see that in the first week of open nominations, and ORIX Financial Services were the first two sites nominated by our membership. Both of these websites represent the high standard of excellence we expect the eLNA Web Award to recognize."


Mr. Semon stated that additional nomination and voting information are available






Thursday----Odds and Ends


Bill Hanson—Live!!!


I think Meet the Leasing News Maker was a booming success. Congratulations!!


Bob Baker


( Thank you. Bill Hanson deserves a lot of credit. His son Ty also helped

him, as Bill will be the first to admit he is not a “computer person.”

Let’s see how the president of NAELB does next Thursday at 1pm,

California time. editor )






I have a listing in the job section and while I have not yet found the employment I seek I wanted you to know that your listings are very effective.


Since listing with you I get 2 or three inquiries per week, and while most are not a match....some very interesting contacts have been made.


Thank you for your service.





Bob Stevenson



Nigeria E-Mail


Here is a link to learn more about Internet fraud from African Countries.


Apparently the letters your subscribers have been receiving, including yours truly, are dubbed a "419" scam, named after the Nigerian penal code which addresses the issue. The site not only contains pages that address all the types of frauds being perpetrated, but also sample copies of letters, some which look quite familiar. There is also a link of where to report probable fraud to US authorities.


I thought your readers may find it interesting.


Jim Fleming




Pizza and the Pentagon


Your comment about the pizza and the Pentagon reminds me of when I worked at Finlaco in the late 70's and early 80's. We were headquartered in the tallest building in Tyson Corner (McLean VA). From my office I could see the top of the CIA building. We could tell if a crisis was about to occur by the number of helicopters taking off and landing.




( In This Day in History:

1991, Allied forces launched a major air offensive against Iraq to begin the Gulf War....A little know historic fact, the launched was predicted by pizza orders. At 5am that morning, the Domino’s Pizza fast-food chain put out a warning to its franchises that war was likely later that day, based on the record order of pizza the previous night from the Pentagon. The Pentagon is the headquarters o the Department of Defense in Washington, DC, and as reported yesterday, is the world’s largest office building.



“Paperless Literally Overnight”


I really like your emails. They're informative and, above all, honest.


I just read the "Paperless Literally Overnight" article about Great America

and I really found it amusing, given that the resources to do what they did

have been around for quite some time yet, nobody in this industry, or others

for that matter, have been courageous enough to take the step.


Though we are just a small broker firm, we have been "paperless" since 1996

and had accumulated almost a whole storage room full of file cabinets paying

rent Just to keep copies?


Being a broker, we get to keep the same amount of paper as the funding

sources, only that there are the originals and ours were the photocopies

needed to keep records.


Consequently, we got to keep photocopies since the year 1978, when we turned

from self-funding to brokering. We hired some young people to scan all

records, one by one and in one month, using Capital Stream's System 1

software application, we opened one day as a 100% paperless company.


The applications and systems from Capital Stream became more and more

sophisticated and, now using the CapitalStream's wonderful "Centerpoint"

application, we continue to be totally paperless and now with a lot more

efficiency and safety due to their new systems.


You are correct. We get calls from funding sources or customers in need to

speak about a specific detail of a transaction and in less than the time it

takes them to explain what they want we have the record in front of us and,

when they wish to discuss documentation details, it takes less than 10

seconds to have the scanned documents, like a perfect photograph, in front

of us and we can flip through the pages just like you would with a folder,

except that our is truly organized in groups of documents, such as credit,

documentation, funding, taxes, etc.


We even scan bank records, invoices, etc. We keep only those originals

required by law and shred the rest.


We calculated the amount of paper that crosses our desks and we estimate

that each of us does the work, equivalent to that of five people.


As you well know, in this blessed leasing industry, the concept of

automation had been just possessing an electric typewriter and it is now

time for all, big and small, to get with the times and get automated and

fast, even if this is said by this old man, who is closer to the harp than

to the guitar. Those upcoming executives better be on the ball, if they want

to work in a cost effective manner. Maybe that way we will get a little

lower buy rates. Yea right ...


Moral: Call the salesmen. Get paperless and enjoy life. Disk space is a lot

cheaper than rent.


Advice: Get a huge tape backup system and don't relax about backups.

Beorganized and methodical because computer servers are all manufactured under

Murphy's Law and we experienced precisely that, not once but twice. We

replaced it, got to our tapes and we were in business again in a short time,

using the whole imaging system, intact as it was.


Thanks again for your wonderful letters, Kit.


Alfredo R. Vionnet

Vionnet & Associates, Inc.

Fresno, CA

Phone: (559) 229-4782


(Thank you...You understand my sense of humor. When I got this press release, I really got a kick out of Paperless Overnight. I mean the hyperbole in the enitre press release really made me laugh. I thought P.T. Barnum wrote it. I didn’t

edit or change a thing.


One of the reasons we put ### around the story is to let readers now we did NOT

write it. It is a press release written by the company public relations expert with

their own sell or spin or exaggeration. Some of them are really hilarious. editor )






I appreciate the service you provide to our industry. I has made it a more connected community that can rally us to react to changes that are always occurring. I have been in the industry for over 20 years During that time so much of the information obtained by the "players" about the happenings was through the grapevine from "bruised grapes".


Thank you for launching us into the 21st century and keeping us vigilant.


Hope you have a prosperous and delightful 2002 with many good memories,


Bernice Truszkowski, CLP






Your newsletter is a great help in knowing what's going on in the

industry and who's doing what.


Keep up the good work.


Lee Greif




Your website has been very valuable

and resourceful to my leasing career so far! I refer it to new brokers



thanks for the help!


"new upcoming rep"


Alliance Funding Group Inc.

(562)694-2884 ext 547

(562)694-5315 fax






You are an optimist. Green Bay in January is very "cold." I grew up in

Wisconsin, a Packer fan. I now reside in St. Louis (yes the same town that

has the team that lost to the 49'ers I think 17 times in a row). Even though

Jeff Garcia is a good quarterback, who played in Canada (where it got very

cold), he still has to have players catch the ball and hold on to it; not an

easy task for those California guys. I'll take the Packers. But enjoy

yourself. Going to a Green Bay game is a special experience.


By the way, thanks for the daily leasing news. You do a great job, and I

enjoy other peoples view points on all the different subjects that you



Safe travels!


Bob Chlebowski

Capital, Technology & Leasing, LLC.


( Thank all of you for your wishes before, and after the game. My only

comment is we could have beaten the St. Louis Rams. I think the

New York Times Monday article on the game was correct: the Packers

stopped our running game, figured out how to get Owens, out thought

us, we didn’t tackle well, and Favre played a brilliant game. They were

the better team that day. editor )






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


Smart Online Selects NCB Capital to Provide Financing Products to Smart Online's Business Customers, alliance with Republic Leasing


WASHINGTON & DURHAM, N.CSmart Online Now Offers Business Loans, SBA Lending, Leasing and


Receivable Financing to its Syndicated Partners' Platforms


Smart Online, Inc., the leading provider of Web-delivered business productivity applications that power the start-up, growth and management of small and medium-size enterprises, announced today that it has chosen NCB Capital, a leading provider of Web-based business finance services, to offer commercial banking products to some of its Fortune 1000 syndicated partners within their small business platforms.


Through this partnership, NCB Capital's products will now potentially be available to millions of users who access Smart Online and its syndicated platforms. The products now available are the following:


- Business loans (Provided by American Express Business Finance)


- From $10,000 to $100,000, these loans are available for any


business need;


- SBA loans (Provided by National Cooperative Bank) - Backed by

the U.S. Small Business Administration, these loans are ideal

for new businesses or those with limited working capital;


- Leasing (Provided by Republic Leasing Company, Inc.) -

Conserves a company's cash flow by enabling the company to

lease virtually any asset including machinery, equipment,

computers, software, automation equipment, furniture,

fixtures, medical and dental equipment, and more;


- Receivable financing (Provided by CDS Capital) - Converts

account receivables and outstanding billings to immediate cash



"We are very pleased to be working with NCB Capital," stated Michael Nouri, CEO of Smart Online. "Financing is the life blood of small and medium-sized companies and reliable access to that financing that is user friendly and understands the needs of small businesses is critical. NCB Capital, and its parent, National Cooperative Bank, have helped small businesses get access to financing for over 20 years. We cannot think of a better partner to add this capability to our existing suite of products."


"Smart Online possesses the leading array of Web-native business productivity applications for every phase of the business lifecycle and has earned a large and loyal following in the small to medium-size business community," said Michael Scinto, Managing Director of NCB Capital. "We feel that the products we offer will perfectly compliment Smart Online's existing resources and look forward to working together."


About NCB Capital


NCB Capital is dedicated to helping businesses get easy access to capital. NCB Capital partners with best-in-class service providers to offer products including: Business Loans; SBA Loans; Leasing; Receivable Financing; and Merchant Services.


NCB Capital is the Web-based business finance division of National Cooperative Bank (NCB), which provides financial services including loans and deposit products to the nation's cooperatives and their members as well as other member-owned organizations and nonprofit endeavors. Chartered by Congress in 1978, National Cooperative Bank was privatized in 1981 as a cooperative financial services company that is owned by more than 1,700 of its customers. Headquartered in Washington, D.C., NCB has offices in Alaska, California, Connecticut, New York and Ohio. To learn more about NCB, visit


About Smart Online


Smart Online, Inc. offers the industry's broadest array of Web-delivered business productivity applications that power the start-up, growth and management of small and medium-size enterprises across the U.S. and Europe. Smart Online's Web-native applications can be rapidly and seamlessly integrated into partners' Web sites, greatly enhancing the value of partners' e-relationships with their end-users. Smart Online is a privately held company with headquarters in Durham, N.C., and offices in Charlotte, N.C., the United Kingdom and France. For more information about Smart Online, Inc. please visit the company's Web site at




NCB Capital


Mickey Mandelbaum, 212/213-1628




Smart Online, Inc.


Tom Furr, 919/765-5000


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

BancWest Earnings Rise 13.0% for Fourth Quarter, 17.8% for Full Year 2001


HONOLULU / -- For the fourth quarter of 2001, BancWest Corporation reported net income of $63.5 million, up 13.0% from the same quarter of 2000. For the full year, the parent of Bank of the West and First Hawaiian Bank reported net income of $254.8 million, up 17.8% from 2000.


Cash earnings for the quarter were $72.7 million, up 12.9% from the fourth quarter of 2000. For the full year, cash earnings were $291.6 million, up 17.1% from 2000.


"Considering the economic fallout from September 11th, our sustained progress is gratifying. Bank of the West continues to grow at a strong double-digit percentage in Western states and First Hawaiian Bank also increased earnings despite the economic hit the Islands have taken since September," said Walter A. Dods, Jr., BancWest Chairman and Chief Executive Officer.


On December 20, BNP Paribas acquired the 55% of BancWest stock it did not already own for $35 in cash per share. The $2.5-billion transaction made BancWest a wholly-owned subsidiary of BNP Paribas, France's largest listed banking group and seventh largest in the world.


Assets, loans, deposits.


BancWest Corporation had total assets of $21.6 billion at December 31, 2001, up 17.2% from a year earlier. Loans and leases totaled $15.2 billion, up 8.9%. Deposits were $15.3 billion, up 8.5%.


Continued revenue growth.


Overall revenues for the quarter were up 16.6% from the same quarter a year earlier and revenues for the full year rose 10.9% from 2000, exclusive of the impact of nonrecurring items.


Higher net interest income.


Net interest income grew 13.6% over the fourth quarter of 2000, due to 9.1% growth in average loans and leases, primarily in the Western Mainland states, as well as the effects of interest rate reductions during 2001. Net interest margin for the quarter was 4.84%, compared with 4.83% for the third quarter of 2001 and 4.66% for the fourth quarter of 2000. For the full year, the margin was 4.73%, compared with 4.75% for of 2000.


Profitability ratios.


Excluding integration costs and amortization of intangible assets but including nonrecurring items, BancWest's return on average tangible assets was 1.57% for 2001, an improvement over the 1.48% return for 2000. Return on average tangible stockholder's equity was 22.71% for 2001 vs. 20.32% for 2000.


Credit quality.


BancWest's nonperforming assets were $119.4 million at December 31, 2001, or 0.78% of loans and foreclosed properties. That compares to the 0.86% ratio as of December 31, 2000 and 0.85% as of September 30, 2001.


Net charge-offs in the fourth quarter were an annualized 0.60% of average total loans and leases, compared to 0.44% in the same quarter a year ago. Net charge-offs for the full year were 0.55% of average total loans and leases, compared to 0.37% in 2000.


During the quarter, the provision for credit losses was $28.8 million, an increase of $12.3 million from the fourth quarter of 2000. For the full year, the provision for credit losses was $103.1 million, an increase of $42.6 million from 2000.


Dods said BancWest increased its loan loss provision both before and after September 11, 2001, because changing national and global conditions will increase the probability that losses not specifically identified may be inherent in the company's loan portfolio. The portfolio is continually stress-tested to identify potential problem industries and borrowers, Dods said.


As a result of the credit loss provision exceeding net charge-offs for the year by $22.2 million, the allowance for credit losses represented 1.28% of total loans and leases at December 31, 2001, compared to 1.23% at December 31, 2000 and 1.27% at September 30, 2001.


Acquisition of United California Bank.


On December 9, 2001, BNP Paribas announced that it had agreed to acquire United California Bank, a subsidiary of UFJ Holdings of Tokyo, in a $2.4-billion cash transaction. United California Bank, the largest Los Angeles-based bank, currently has assets of $11 billion and 117 branches throughout California.


The acquisition, through BNP Paribas subsidiary BancWest, is expected to close by the end of the first quarter of 2002, subject to regulatory approvals. United California Bank will then be merged into Bank of the West by the end of the third quarter of 2002, more than doubling its California presence, and the consolidated company will operate under the Bank of the West name.


Following the acquisition, BancWest will have $34 billion in assets and serve 1.5 million customers from more than 350 branches in California, six other Western states, Guam and Saipan. Bank of the West will have $15 billion in deposits within California, ranking fourth in bank deposit market share in the nation's most populous state.


Acquisition on Guam, Saipan.


On November 9, 2001, BancWest subsidiary First Hawaiian Bank completed its acquisition of Union Bank of California's branch network in Guam and Saipan, along with associated loan and deposit accounts. First Hawaiian Bank assumed branch deposits (approximately $200 million) and also bought various loans from the branches.


About BancWest: BancWest Corporation ( is a bank holding company with assets of $21.6 billion. It is a wholly-owned subsidiary of Paris-based BNP Paribas. BancWest is headquartered in Honolulu, Hawaii, with an administrative headquarters in San Francisco, California. Its principal subsidiaries are Bank of the West (193 branches in Northern and Central California, Oregon, New Mexico, Nevada, Washington state and Idaho) and First Hawaiian Bank (56 branches in Hawaii, two in Guam and two in Saipan).


About BNP Paribas: BNP Paribas ( is a world leader in banking and financial services, offering retail banking and financial services (consumer credit, leasing, e-brokerage, insurance, car fleet management, etc.) to millions of individual customers and corporations mainly in France (2000 branches), Europe, the United States, Mediterranean basin and Africa. Headquartered in Paris, France, it has one of the most extensive international networks in the world with offices in 87 countries. Active in all major financial centers, and providing services to large corporations and institutions, BNP Paribas enjoys key positions in Corporate and Investment Banking, Private Banking, Asset Management and Securities Services. With total assets of $723.6 billion (EUR 851 billion) and shareholders equity of $19.8 billion (EUR 23.3 billion) at June 30, 2001, BNP Paribas was the Number 1 listed bank in France and Number 2 listed bank in the Euro zone.

To learn more about Bank of the West Leasing, contact: Steve Crane

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


RISConsulting Celebrates 5th Anniversary With Launch of Aircraft Risk Management Internet Portal


BOSTON--RISConsulting announced today the launch of its new aviation industry Portal - has been developed as the premier portal for aircraft financial risk management. It will host a suite of risk management tools to aid aircraft and aircraft component manufacturers, aircraft leasing companies, and financial institutions in the analysis and measurement of risk related to asset and residual value guarantees, aircraft leasing, securities (e.g., EETCs) and manufacturer contingent liability portfolios. RISConsulting has reached an agreement in principal with Airclaims Limited, a leading aircraft valuation and appraisal firm, for Airclaims to be the data partner for


"", says Derrell Hendrix, CEO of RISConsulting, "is dedicated to increasing the transparency and liquidity of aircraft financial risk and is a natural step for us given the aircraft risk expertise and models we have developed over the past five years."


In addition to a single aircraft residual value guarantee (or option) stochastic model and pricing tool that is already available, the site will host the following models:


-- An aircraft residual value guarantee/option portfolio stochastic model and pricing tool


-- An aircraft lease income portfolio deterministic (stress) model


-- An aircraft lease income portfolio stochastic model


-- A EETC deterministic (stress) model


Approved parties that register before March 31st will have free access to models for three months. RISConsulting is also offering all approved registrants up to 2 hours of free consultation on models and related risk analysis, as well as assistance in understanding and using the models.


RISConsulting is a Boston-based consulting and advisory firm providing cutting-edge financial risk and capital management models and risk-transfer solutions to top-tier institutions worldwide. In addition to aircraft, RISConsulting advises on transactions involving P&C reinsurance risk (2 CAT bond transactions) and life reinsurance risk (5 transactions), and is currently developing an innovative alternative collateral program for non-admitted reinsurance carriers.


RISConsulting was founded in 1996 by Mr. Derrell Hendrix and the Insurance Corporation of Hannover (a subsidiary of Hannover Re of Germany). Utrecht America Holdings (a. subsidiary of Rabobank Nederland) joined RISConsulting as a member in 1997.


For more information on RISConsulting, you may visit our website at




The RISConsulting Group LLC


Andy Seem


(617) 867-9010


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


Compaq had strong quarter




San Jose Mercury News


Compaq Computer, the world's second-largest maker of personal computers, said Wednesday that it beat analysts' expectations for fourth quarter earnings by 4 cents a share.


While revenue declined from the same period a year ago, it improved $1 billion -- or 14 percent -- over the previous quarter, indicating Compaq may have succeeded in putting the worst behind it as the company pushes forward on its controversial merger with Hewlett- Packard.


While Compaq was touting its strong results, dissident HP board member Walter Hewlett was sending his first direct communication to HP's 750,000 shareholders explaining why he opposes the deal.


Compaq executives attributed the better-than- expected earnings growth in the company's enterprise business, its services business and better-than-expected sales in personal computers during the holiday season.


``We have managed to maintain a very high customer focus and customers have also continued to endorse Compaq,'' said Peter Blackmore, Compaq's executive vice president of sales and services.


Compaq reported fourth-quarter net income of $92 million, or 5 cents a share, compared to a net loss of $672 million, or 39 cents a share, in the year-ago quarter. Excluding a $36 million charge for merger-related expenses, the company earned 6 cents per share.

Revenue for the fourth quarter was $8.5 billion, compared to $11.5 billion the same period a year ago.


``It's no exaggeration to say that 2001 was a difficult year,'' said Michael Capellas, Compaq's chief executive officer during a conference call with analysts on Wednesday. ``It was a year of economic weakness and reduced demand for information technology,'' he said.


Compaq shares rose to $11.40 in after-hours trading Wednesday, after closing the regular session at $11.10, down 30 cents a share. ``It was awesome,'' said analyst Dan Niles of Lehman Brothers in San Francisco. ``We thought revenues would be above $8 billion -- maybe $8.1 or $8.2. They did $8.5. We thought they would be profitable, maybe a few cents. They said 6 -- so that is great, too.''


HP officials also were pleased. ``The results show that Compaq executed well,'' said spokeswoman Judy Radlinsky. ``They proved they were not distracted and that they continue to have the support of customers. This reinforces our view that the merger combination presents a compelling opportunity to enhance shareowner value.''


Depending upon approval from both U.S. and European regulators, HP has said that it expects a shareholder vote on the merger sometime between late February and the end of June.


Hewlett's anti-merger camp was skeptical about the Compaq numbers. ``When you lower the bar to the floor, it's pretty easy to step over it,'' said Hewlett spokesman Todd Glass.


Hewlett, who is spearheading the campaign against the Compaq-HP deal, is to meet with the full HP board today for the first time this year.


Glass said Compaq's earnings for 2001 are about 71 percent below the analysts' consensus at the time the deal was announced last September. Based on HP's closing price of $23.08 on Tuesday, HP stockholders will be paying 95 times 2001 earnings for Compaq if the merger is approved, he said.


``We do not believe that Compaq's results mitigate the flaws in the proposed merger,'' Glass said.


On Wednesday, Hewlett took his case against the merger directly to HP shareholders with a three-page letter that restated his concerns and urged them to reject the proposed deal.


Some analysts who've come out against the merger were unmoved by Compaq's results.


``You have to peel back the layers to see what is at the core,'' said Ashok Kumar, an analyst at U.S. Bancorp Piper Jaffray, of the earnings report. ``There is nothing there, in my opinion. It's window dressing to get sponsorship for the deal, and nothing else.''


Contact Tracy Seipel at or (408) 920- 5343.



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




ALBANY, NY, Key Equipment Finance, one of the nation's

largest bank-held equipment financing companies, has announced that James

W. Mignogna has been named senior vice president and national sales manager

for its commercial leasing services unit. In his new role, Mignogna will

manage Key Equipment Finance's nationwide sales force as it pursues

equipment financing solutions for business clients throughout the U.S and



Mignogna replaces James A. Crowley who assumes a new role as

super-regional sales manager for Key Equipment Finance's expanded eastern

U.S. sales territory.


Mignogna's office is located at Key Equipment Finance's world headquarters

in Superior, Colorado. He and his family will relocate from Pittsburgh,

Pennsylvania, during the first half of 2002.


Prior to joining Key, Mignogna served as senior vice president of business

development and national sales manager for Mellon U.S. Leasing. Prior to

that position, he held various senior level roles with national

responsibility at Comdisco Electronics Group, Computer Leasing, Inc. and

Equitable Life Leasing.


Key Equipment Finance provides business-to-business equipment financing

solutions to businesses of many types and sizes. They focus on four

distinct markets:


    small businesses in the U.S.;

    mid-to-large size businesses in the U.S. and Canada for acquisitions

from $5,000 and up;

    equipment manufacturers, distributors and value-added resellers

worldwide; and

    federal, state and local municipalities as well as other public sector



Headquartered outside Boulder, Colorado, Key Equipment Finance manages a $7

billion equipment portfolio with annual originations exceeding $3 billion.

The company, which operates in 25 countries and employs more than 700

people worldwide, has been in the equipment financing business for nearly

30 years. Additional information regarding Key Equipment Finance, its

products and services can be obtained at


Cleveland-based KeyCorp (NYSE: KEY) is one of the nation's largest

bank-based financial services companies, with assets of approximately $84

billion. Key companies provide investment management, retail and commercial

banking, retirement, consumer finance, and investment banking products and

services to individuals and companies throughout the United States and, for

certain businesses, internationally.


The company's businesses deliver their products and services through KeyCenters and offices; a network of

approximately 2,400 ATMs; telephone banking centers (1.800.KEY2YOU); and a

Web site,, that provides account access and financial products 24

hours a day.



( courtesy )


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

US Bancorp Reports 4th Quarter Earnings


    EARNINGS SUMMARY                                                 Table 1

    ($ in millions, except

    per-share data)                  Percent Percent

                                       Change   Change   Full    Full

                   4Q    3Q    4Q   4Q01 vs 4Q01 vs   Year    Year Percent

                  2001   2001   2000   3Q01    4Q00    2001    2000   Change

    Before merger

    and restructuring-

    related items*:


       earnings $785.2 $149.7 $824.2    nm    (4.7) $2,550.8 $3,106.9 (17.9)


       per common


       (diluted)   0.40   0.08   0.43    nm    (7.0)    1.32    1.62 (18.5)

      Cash earnings

       per common


       (diluted)** 0.48   0.15   0.49    nm    (2.0)    1.59    1.82 (12.6)

    Net income    695.4   38.7 768.7    nm    (9.5) 1,706.5 2,875.6 (40.7)

    Earnings per

    common share

    (diluted)    0.36   0.02   0.40    nm    (10.0)    0.88    1.50 (41.3)

    Cash earnings

    per common


    (diluted)**   0.43   0.09   0.46    nm    (6.5)    1.15    1.70 (32.4)

    Dividends paid

    per common

    share       0.1875 0.1875 0.1625    --    15.4      0.75    0.65 15.4

    Book value per

    common share

    (period-end) 8.43   8.54   7.97 (1.3)    5.8

    Return on

    average common

    equity***(%) 18.6    3.5   22.2                     15.7    21.6

    Return on


    assets*** (%) 1.85   0.35   2.02                     1.54    1.96

    Net interest

    margin (%)    4.60   4.42   4.33                     4.45    4.36


    ratio*** (%) 50.4   49.5   47.8                     49.5    48.8

    *   merger and restructuring-related items (net of taxes) totaled

       $89.8 million in 4Q01, $111.0 million in 3Q01 and $55.5 million in


       merger and restructuring-related items (net of taxes) totaled

       $844.3 million in full year 2001 and $231.3 million in full year 2000

    ** calculated by adding amortization of goodwill and other intangible

       assets to operating earnings and net income

    *** before merger and restructuring-related items

    nm percentage is not meaningful or distorted due to 3Q01 provision for

       credit losses and other charges


    U.S. Bancorp (NYSE: USB) today reported operating earnings of

$785.2 million for the fourth quarter of 2001, compared with $824.2 million

for the fourth quarter of 2000.


Operating earnings of $.40 per diluted sharein the fourth quarter of 2001 were lower than the same period of 2000 by $.03,or 7.0 percent. Operating earnings on a cash basis were $.48 per dilutedshare in the fourth quarter of 2001, compared with $.49 in the fourth quarterof 2000. Return on average common equity and return on average assets,excluding merger and restructuring-related items, were 18.6 percent and1.85 percent, respectively, in the fourth quarter of 2001, compared with returns of 22.2 percent and 2.02 percent in the fourth quarter of 2000.


    U.S. Bancorp (the "Company") is the organization created by the merger of

Firstar Corporation ("FSR") of Milwaukee, Wis. and the former U.S. Bancorp

("USB") of Minneapolis, Minn. The merger was completed on February 27, 2001,

as a pooling-of-interests, and prior periods have been restated.


    Including after-tax merger and restructuring-related items of

$89.8 million in the fourth quarter of 2001 and $55.5 million in the fourth

quarter of 2000, the Company recorded net income for the fourth quarter of

2001 of $695.4 million, or $.36 per diluted share, compared with

$768.7 million, or $.40 per diluted share, for the same period of 2000.


    U.S. Bancorp President and Chief Executive Officer Jerry A. Grundhofer

said, "I am very pleased with the Company's overall results in the fourth

quarter, but I am particularly pleased with the revenue momentum that was

established. Equally important, we continued to make significant progress

against our primary corporate objectives of reducing the risk profile of the

Company, improving credit quality and completing the seamless integration of

Firstar and U.S. Bancorp on schedule.


U.S. Bancorp is now well positioned to withstand the current economic environment and to capitalize on growth opportunities as the economy improves. In addition, the integration is on target to be completed by the end of the third quarter of 2002.


The success of our integration efforts to date and the benefits of the merger became evident in our fourth quarter results. The Five Star Service Guarantee is in place across the entire Company and service quality is at extremely high

levels, which is reflected in our ability to retain existing customers,

attract significant new business and grow revenues. I am proud of our

accomplishments in the quarter and of the dedicated employees of U.S. Bancorp

who are committed to seeing these trends continue in 2002 ."


    Total revenue on a taxable-equivalent basis for the fourth quarter of 2001

grew by $181.3 million, or 6.4 percent, over the fourth quarter of 2000,

primarily due to improvement in the net interest margin, acquisitions, core

banking growth, and securities gains, partially offset by a reduction in

capital markets-related revenue, trust and investment management fees,

earnings from equity investments, and further impairment of retail lease

residuals recognized in the fourth quarter of 2001.


    Total noninterest expense, before merger and restructuring-related items,

increased over the fourth quarter of 2000 by $156.1 million, or 11.6 percent,

primarily reflecting acquisitions and an additional impairment of mortgage

servicing rights (MSR) recognized in the fourth quarter of 2001.


    Provision for credit losses for the fourth quarter of 2001 increased by

$36.3 million, or 15.8 percent, over the fourth quarter of 2000, reflecting an

increase in charge-offs quarter over quarter resulting from deterioration in

economic conditions and credit quality relative to a year ago.


    Net charge-offs in the fourth quarter of 2001 were $265.8 million,

compared with the third quarter of 2001 net charge-offs of $563.3 million and

fourth quarter of 2000 net charge-offs of $229.5 million. Net charge-offs in

the third quarter of 2001 included approximately $313.2 million of charge-offs

related to management's decision to accelerate its workout strategy for

certain borrowers, as well as the recognition of collateral and credit

deterioration in the transportation, manufacturing, communications and

technology sectors.


Nonperforming assets decreased from $1,132.4 million at

September 30, 2001, to $1,120.0 million at December 31, 2001, primarily

reflecting management's credit quality initiatives. The ratio of allowance

for credit losses to nonperforming loans was 245 percent at December 31, 2001,

compared with 243 percent at September 30, 2001.



( courtesy )


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Fed nationwide survey finds expectations for midyear recovery


By Martin Crutsinger, Associated Press


WASHINGTON (AP) The U.S. economy began the new year still

mired in its first recession in a decade, but there were signs of

improvement and business executives were hopeful for a rebound by

midyear, the Federal Reserve said Wednesday.

In its latest survey of business conditions around the country, the Fed said, ''While there are still indications of caution, there are also scattered reports of improvement.''

The Fed noted that auto production was up sharply at many plants, in response to big zero-financing-spurred sales gains in October and November.

The central bank said that consumer spending in general was showing some signs of improvement in late December and early

January, with the Cleveland, Kansas City, New York and Philadelphia

Fed districts reporting better-than-expected sales.

''Many districts indicate that their contacts believe a recovery will begin by midyear, but the timing and strength are uncertain,''

the Fed's report declared.

The Fed survey, done eight times a year, will be used when central bank policy-makers hold their first meeting of the new year

on Jan. 29-30.

Many private economists believe the Fed will cut interest rates for a 12th time at that meeting to increase the likelihood that a sustainable recovery will occur in coming months.

The picture painted of economic activity in the Fed survey conformed to views expressed recently by various Fed officials,

including Fed Chairman Alan Greenspan.

Greenspan said in a speech Friday that the economy appeared to

be stabilizing after the severe jolts caused by the recession,

which began in March, and the September attacks.

But Greenspan warned there were still ''significant risks'' from a variety of forces that could derail any budding recovery.

The Fed survey found that the U.S. airline industry was continuing to suffer from falling ticket sales and soaring security

costs in the wake of the terrorist hijackings.

Those terrorist attacks, hitting an economy already in recession, caused more than 800,000 job cuts in October and November alone.

The Fed survey found that those massive layoffs had translated

into falling wage pressures, with the Cleveland Fed reporting that

some firms were invoking ''economic duress'' clauses in their labor

contracts to renegotiate existing union contracts to lower their

labor costs.

The central bank report found that prices were dropping for many

goods and services, although there were sharply rising prices

reported for security and insurance, a reflection of the impact of

the terrorist attacks. The Fed noted that health care costs also

were rising sharply.

Manufacturing, which last year suffered its biggest drop in output since the 1982 recession, remained in trouble at the start

of this year, the Fed reported, with activity weak or declining in

nearly all parts of the country.

But even in this battered sector, the Fed found reasons to be hopeful about a rebound with Cleveland and Atlanta reporting an

increase in new orders and Atlanta even beginning to hire back

laid-off workers.

In general, the Fed found ''more optimism among the country's manufacturers with many predicting a pickup toward the end of the

first half of 2002.''

The Fed, beginning on Jan. 3 of last year, cut interest rates 11 times, pushing the federal funds rate, the interest that banks charge each other, down to 1.75 percent, the lowest level in more

than 40 years.

However, the Fed's last rate cut on Dec. 11 was just a

quarter- point move rather than the half-point cuts it had favored

for most of last year.

That change has led many analysts to believe the Fed is nearing

the end of its rate cuts. Before Greenspan's speech last Friday,

many analysts said the Fed might pass up the chance to cut rates at

its Jan. 29-30 meeting.

However, Greenspan's discussion of ''significant risks'' still facing the economy has many analysts now looking for at least one

more quarter-point move.

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