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Kit Menkin’s Leasing News Monday,
March 18, 2002 www.leasingnews.org Independent, unbiased and fair news about the Leasing
Industry -------------------------------------------------------------------------- Headlines---- Bank of the West Becomes California’s Fourth Largest Bank* Minimum Leasing Association Dues Comparison Monday---Odds and Ends Where are Jim Lahti and Richard Galtelli? Jeffrey Taylor---lease CPA---New Tax Laws-- CitiCapital Launches Vendor FastFinance Silicon Valley---Mired in Recovery ### Denotes Press Release * parent of Bank of the West Leasing #### ############################################### Transaction Creates $34-Billion Western Banking
Organization;
Bank of the West Becomes Fourth-Largest California
Bank
SAN FRANCISCO and LOS ANGELES, / -- BancWest Corporation,
a subsidiary of BNP Paribas, announced today that it has completed
its acquisition of United California Bank from UFJ Bank Ltd. of Japan. United California Bank is the largest Los Angeles-based
bank with assets of $10.5 billion and 115 branches throughout California.
United California Bank will be merged into Bank
of the West, a BancWest subsidiary.
Later this year, its branches will be fully integrated into
the branch system of Bank of the West, more than doubling its California
presence.
The acquisition solidifies BancWest's position
as one of the premier western financial services franchises. BancWest now has $34 billion in assets and
serves 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.
"In terms of business lines and geography,
United California Bank is a perfect fit," said BancWest Chairman
and Chief Executive Officer Walter A. Dods, Jr.
"United California's strong presence in Southern California
complements Bank of the West's existing network in Northern California,
the Pacific Northwest, New Mexico and Nevada."
Don J. McGrath, president and chief operating
officer of BancWest and president and chief executive officer of Bank
of the West, said the transaction "puts our company into southern
California on a scale to compete successfully.
It also adds to our market share in the northern and central
regions of the state. We'll be able to offer our brand of community
banking and superior service to customers from San Diego to San Francisco."
About United California Bank
United California Bank ( www.unitedcalbank.com
) is the product of last year's merger of Sanwa Bank California and
Tokai Bank of California. The
parent company of United California Bank is UFJ Bank Ltd., which was
created in Japan in January in the merger of The Sanwa Bank, Limited
and The Tokai Bank, limited.
About BancWest
BancWest Corporation ( www.bancwestcorp.com )
is a bank holding company with assets of $34 billion following completion
of the above acquisition. It
is headquartered in Honolulu, Hawaii, with an administrative headquarters
in San Francisco, California. Its
principal subsidiaries are:
-- Bank of the West which, prior to this acquisition,
had 193 branches in Northern
and Central California, Oregon, New Mexico, Nevada, Washington state and Idaho, and
-- First Hawaiian Bank, with 56 branches in Hawaii, two in
Guam and two in Saipan.
About BNP Paribas
BNP Paribas ( www.bnpparibas.com ) 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 $735.8 billion (EUR 825.3 billion) and
shareholders' equity of $21.9 billion (EUR 24.6 billion) at December
31, 2001, BNP Paribas is the Number 1 listed bank in France and Number
2 listed bank in the Euro zone.
### ####################################################### Minimum
Leasing Association Dues Comparison
Basic
dues to join the six non-profit equipment leasing associations. The
Equipment Leasing Association has a $400 application fee. Full
comparison available at : http://www.leasingnews.org/DuesComparison.htm Equipment
Leasing Association: http://www.leasingnews.org/associations.htm Related
equipment leasing associations are located at: http://www.leasingnews.org/associations2.htm --------------------------------------------------------------------------------------------------- Monday---Odds
and Ends CIT
Blocking Leasing News e-Mail—sent him e-mail via AOL Sneaky. I'm impressed and approve.
I have a copy being sent to my home ( Name With Held---a CIT “department manager” ) ( You are right on. These email addresses are all free and very easy to obtain. Quite a out-dated attitude by CIT upper management as if employees are immature, not able to consider other opinions, or worse yet, won’t learn what is happening in their own company. What do they have to hide by blocking Leasing News email? Editor ) ----- Bruce
Kropschot recommended this book. Leasing
for Dummies First
Federal Jerry Bishop Appearing in Las Vegas
( Live! ) Eastern Association of Equipment Leasing
and United Association of
Equipment Joint Leasing Conference ( also at the National
Association of Equipment Leasing Conference
in Orlando ) Thank
you for the title "Dealing Man"-being a regular visitor
to Las Vegas
I accept that title with honor. Yes
I will be doing my small part in the NAELB Show in Orlando April 11-14,
and Las Vegas May 2-5. Actually my theme may be "the similarities
between surviving five days in Las Vegas, to surviving long term in the leasing business.
I am compiling the odds now and may have a surprising announcement
soon-Stay Tuned ! Jerry
Bishop, CEO First
Federal Leasing -------- Commercial
Money Center All
the e-mail to readers at Commercial Money Center now comes back. The
company is closed. Leasing
News is trying to find out whether they have
filed bankruptcy, are planning to file bankruptcy, and the outcome of
claims from lessee, vendors, brokers and other creditors. --- My
e-mail address has changed from "dmpower@mediaone.net" to
"dmpower@attbi.com". Keep up the good work -- your newsletter is
very interesting, informative and entertaining. Dan Power 1 King Philip Path Hingham, MA 02043-3954 Phone: 781-749-2195 E-Mail: dmpower@attbi.com (Thank
you. Very much appreciate
letting us know about the old address. Many
readers assume we will find out about their old address, but that is
not the case. Plus when we
get mail back, it is from the carrier, without who
the mail was original intended for.
If you change your address, please let
us know the old address to delete. Editor ) ---- Jim
Merrilees Guess
who left a voicemail message about attending the MAEL Invitational? *** Wonders
if I am flying him out "all expenses paid". Mentions he has a Chicago
office and should probably consider attending. Best
regards, Clyde
D. Cady President Facility
Capital 333
West Wacker Drive Suite
1750 Chicago,
IL 60606 cdcady@facilitycapital.com www.facilitycapital.com 312.541.6000
phone 312.541.1275
fax 312.399.9335
mobile Members
ELA & MAEL (
Wow, you are paying for his flight, too!!!
Dinner and wine included! What
a promotion to attract new members? . Editor ) ---
Members and non-members are invited. Where are Jim Lahti and Richard Galtelli
? BancPartners,
formerly First Commercial Leasing Larry Mathews President/ Chief Operating Officer BancPartners Leasing welcomes
Larry Mathews as President and Chief Operating Officer. Larry brings
24 years of banking experience to BancPartners. Prior to joining BancPartners,
Larry was Chairman/CEO of The Bank in Birmingham, Alabama, and Vice
Chairman of The Bancorporation where he managed thirty offices in
Alabama and Florida, oversaw the development and marketing of new
deposits and operating systems, and developed officer and director
incentive plans. Larry received an MBA from the University of Alabama
in 1981, and a BS Finance degree in 1975. He was a member of Beta
Gamma Sigma-Business Honorary. Larry proudly serves as Board Member
of the Alabama Symphonic Association and Prescott House. Jim
Lahti is still in the main picture on the website along with Richard
Galtelli : http://www.bancpartners.com/ On
one page, Rick Gatelli has his picture and is listed as Vice-President-COO, with
news that a private label community/regional bank program is about to
be launched. ( announcement made the previous week ). Neither
he or Rick Gatelli have their picture in: “Our People”. Where
are Jim Lahti and Rick Gatelli? _______________________________________________________________ Quote from the
Article “I personally think that it doesn’t do a whole heck of
a lot for a small leasing company or a company that doesn’t acquire
a lot of assets. Plus details from Section
101 and 102 of the passed bill---- New
Tax Laws http://executivecaliber.ws/sys-tmpl/door/ ( Website
address: Leasing Financial newsletter also available ) EDITORIAL by Jeffrey Taylor
Jeffrey
Taylor has more than 20 years of lease training experience. He is
a licensed CPA and has an extensive background in leasing as an academic
and broker. He received his BA from Washington University and his
MBA from the University of Chicago. His international lectures have
taken him to Australia, Canada, Hong Kong, Ireland, Italy, Korea,
Malta, Mexico, Nigeria, Portugal and Singapore. He has been published
in the Molloy Monitor, Asian Leasing Journal, Journal of Equipment
Finance, Practical Cash Management, Asset Leasing Digest, E-Trucker
Magazine and the Handbook of Equipment Leasing. ### ###################################################### (
After announcing closure of their Machine Tool division, Citigroup takes to the Internet to increase equipment
leasing business. They are also going to take out more Yellow Page telephone
advertising, it is reported. ) CITICAPITAL VENDOR FINANCE LAUNCHES FASTFINANCEŽ
New
York, NY -- CitiCapital, a business unit of Citigroup, today announced
the launch of FastFinanceŽ, an advanced e-commerce lease origination
and portfolio management system for its vendor customers. FastFinance
is available to equipment vendors, dealers, and distributors which
offer their customers point-of-sale financing through CitiCapital.
FastFinance helps users
significantly streamline their lease origination process and offer
their customers instantaneous financing when they acquire new equipment.
Manufacturers and distributors using FastFinance can close sales faster
by providing real-time quotes, submitting lease applications for their
customers online, and obtaining immediate credit decisions. With FastFinance,
users will also have access to their company’s own customer database
to track customer activity. Anthony Cracchiolo, Business
Head of CitiCapital’s Vendor Finance Group for Healthcare, Energy
and Electronics, said, “FastFinance is proof of our on-going
commitment to put technology to work on behalf of our customers. Whatever
the size of a vendor’s sales force – from 100 to 1,000 --
we can help them achieve their sales goals and become more efficient.
This innovative technology gives our customers a true advantage over
their competitors. They can now offer real-time financing from virtually
anywhere, anytime.” CitiCapital Vendor Finance
Group is a leading provider of finance programs for manufacturers,
dealers and distributors of medical technology, energy management
systems, electronics equipment, and business technology. With a current global
portfolio of $35 billion, CitiCapital, a business unit of Citigroup,
is the second largest U.S.-based commercial finance company. CitiCapital
provides a full range of financing solutions and services to over
550,000 customers throughout the world and is a market leader in material
handling, construction, business technology and medical equipment
finance, as well as transportation finance and fleet services. For
more information visit www.citicapital.citigroup.com.
Citigroup (NYSE: C), the
preeminent global financial services company with some 200 million
customer accounts in more than 100 countries, provides consumers,
corporations, governments and institutions with a broad range of financial
products and services, including consumer banking and credit, corporate
and investment banking, insurance, securities brokerage, and asset
management. Major brand names under Citigroup's trademark red umbrella
include Citibank, CitiFinancial, Primerica, Smith Barney, Banamex,
and Travelers. Additional information may be found at www.citigroup.com.
#### ################################# #################### Hard fall, slow recovery Silicon Valley mired in downturn even as the national economy improves Sam Zuckerman, San Francisco Chronicle Economics Writer Now that the national economy is in recovery mode, the chatter in Silicon Valley is that the long- suffering technology sector may be ripe for a rebound. But you wouldn't know that from talking with the folks who just lost their jobs at OptiMight Communications. The once-promising optical networking company's quest for high-tech success ended in January, just three years after it set up shop with visions of revolutionizing how data is transmitted over fiber- optic networks. It wasn't that the San Jose startup's products were inferior, insiders say. But with the telecommunications equipment market in the dumps, OptiMight's venture capital backers were unwilling to write the $80 million check needed to carry the company through to profitability. That forced OptiMight's owners to shut down the company, throwing some 100 people out of work. "We ran out of gas before we could reach the destination," said Ramki Ramakrishnan, OptiMight's former vice president of operations. What happened to OptiMight offers an important lesson, Silicon Valley observers say. Two years after the crash of the tech-laden Nasdaq index and one year after the onset of the nation's first recession in a decade, the valley's agony is far from over. The valley's widely anticipated recovery will sputter and stall before it works up a head of steam, analysts warn. Despite some signs of a rebound, jobs and fortunes will continue to be lost, more office space will go crying for tenants, stockholders will still count their losses and the boom times of the late 1990s will recede further into memory. "It's going to be a slow, modest recovery," said Tom Mendoza, president of Network Appliance, a Sunnyvale data storage company. "A rapid recovery is at least 12 months away." A surge of business failures belies any notion that the valley is returning to health. Companies that got their start during the boom years of the late 1990s are going belly-up at a rapid rate. The wave that decimated the dot-com sector is now washing over computer and telecom companies. FAILURES STILL RISING Up-to-date statistics on tech-sector business failures aren't available. But the disappearance of once highly touted companies such as OptiMight are the talk of the valley. "In 1999, we had 25 cases," said Chuck Brooks, a manager in the San Leandro office of CMA Business Credit Services, a firm that handles corporate reorganizations and liquidations as an alternative to bankruptcy court. "Now my caseload is up to 175, with 50 very active ones," said Brooks. High-tech companies account for two- thirds of his business. Therein lies the contradiction that grips the valley right now: Even as the national economy moves into positive territory and some parts of the tech market stabilize, the main indicators of the valley's economic health -- job creation, unemployment, office vacancy rates -- are still deteriorating and are expected to do so for months to come. Santa Clara County's unemployment rate was 7.3 percent in February. That number could peak at 8 or 8.5 percent in the months ahead, said Paul Fassinger, research director of the Association of Bay Area Governments. What happened during the past 18 months is by many measures the worst downturn the valley has ever experienced. Since the employment peak in December 2000, Santa Clara County, the heart of the valley, has lost more than 86,000 jobs and seen its unemployment rate multiply more than fivefold. Silicon Valley office vacancies soared from 1.3 percent in the first quarter of 2000 to 15 percent in the fourth quarter of last year, according to CB Richard Ellis, a commercial real estate services firm. The catastrophic turn of fortunes reflects the deflation of the tech bubble of the late 1990s. Last year, semiconductor sales fell by a stomach- churning 40 percent. Meanwhile, by the end of 2001, orders for telecommunications equipment were dropping at an annual rate of about 50 percent. CONSUMERS LEAD SLOW RECOVERY Tech-sector watchers say the worst is over. The market for technology products is no longer in free fall. But sales are likely to recover at a snail's pace. Consumer appetite for electronic gear is on the rise, boosting sales of computers and software. But demand from the all-important business sector has shown little sign of bouncing back. Businesses binged on tech equipment in the late 1990s as corporate America raced to get on the Internet. But those outsized investments in computers, servers, routers and software produced paltry financial benefits, contributing to one of the steepest plunges in corporate profits ever measured. These days, companies are still cutting back their plans for buying tech equipment, according to a survey by the investment bank Goldman Sachs. That means little or no growth in sales to business this year for many categories of tech products compared even with last year's depressed levels, Goldman predicts. For its part, the Semiconductor Industry Association forecasts a 6 percent rise in global chip sales in 2002, well below the industry's historic growth rate, driven by consumer purchases of DVD players, digital cameras and similar products. Computer sales are already bouncing back from their lows, thanks to robust consumer demand. In the three months ended in December, orders rose 23 percent from the previous quarter, according to the Commerce Department. But orders are still about a third below their prerecession peak. There is no recovery at all yet in telecommunications. During the boom years of the late 1990s, dozens of established and startup companies spent tens of billions of dollars building networks to handle surging Internet traffic. When demand failed to meet expectations, some companies failed, such as global fiber-optic network builder Global Crossing. Survivors sharply cut back spending. This year, the telecom research firm RHK projects that capital spending in the sector will plunge 31 percent to $48 billion following last year's 24 percent drop. Throughout the valley, the weak market for tech products is putting companies against the wall. An unforgiving Darwinian process is killing off the valley's weakest players. "As long as we have three to five players in every subsegment, we're going to continue to see failures," said Anand Gowda, a principal at the venture capital firm Carlyle Venture Partners. "We're going to see a shakeout for some time to come." None are more vulnerable than startups that need venture capital funding to pay the bills. For many infant companies, funders cut off the money spigot in 2000. Many of those firms are only now running out of cash, creating a spike in business failures. "The heaviest period (of business failures) started in October. By the second half of the year, there won't be so many," said Wu-Fu Chen, the entrepreneur who founded OptiMight. Another company founded by Chen, Cinta Networks, a San Jose designer of optical switches, also shut down a few weeks ago when its funding dried up. LEADERS WEATHER STORM Meanwhile, established companies whose survival is not at issue are struggling to regain their footing. Network Appliance parlayed its leading position in the hot data storage field into a 40 percent annual growth rate during the late 1990s. When corporate America stopped buying tech equipment, the Sunnyvale company's sales plunged, falling 24 percent in the nine-month period ended in January. Now the company projects that sales will grow again, but at a feeble 2 to 5 percent rate in the three months ending in April, company President Mendoza said. Of course, the mere fact that, outside the telecom sector, the tech market is no longer collapsing allows many valley companies to stabilize their operations. Managers can set budgets, finance projects and develop new products based on the assumption that revenue will be flat or rise slightly from current low levels. "We're definitely starting to come out of it," said Chris Albinson, chief strategy officer at San Francisco's Exodus Internet Services, which manages Internet operations for corporate clients. "We're seeing increased demand and stabilization of suppliers. Desperate competition seems to be diminishing." The company, which is owned by Britain's Cable & Wireless, was growing at a 40 percent pace before the bottom fell out of its business last year. Now, fueled by the trend for corporations to move a wider range of operations onto the Internet, Exodus expects to expand its business roughly 20 percent this year. The fact that Exodus still exists is itself something of a morality tale, Silicon Valley style. The original component of the company is the former Digital Island, a hot startup bought by Cable & Wireless in 2000 for $340 million. Last year, the company paid $700 million to add most of the operations of Exodus Communications, the once- white-hot Santa Clara Web hosting company that became one of the valley's most spectacular business failures. Digital Island adopted the name of Exodus, which was about 10 times its size. The company's ability to survive the Internet crash was the result of the deep pockets of its foreign owner. While rivals were running out of funds, Cable & Wireless had no debt and $6 billion in cash to support its struggling U.S. subsidiary. The Web hosting business, once dominated by flashy startups, is now ruled by such blue-chip names as IBM and EDS, companies that have the capital and resources to ride out the business cycle. "Startups are just not viable," said Exodus' Albinson. "If you're talking about venture-backed companies, the business cycle made the window of opportunity for those companies just go away. They didn't get enough customer traction to get cash-flow positive." E-mail Sam Zuckerman at szuckerman@sfchronicle.com. Skyrocketing vacancies The vacancy rate for Silicon Valley's office market climbed from 1.3 percent in first quarter 2000 to 15 percent in fourth quarter 2001. . Vacancy rate 2000 First quarter 1.3% Second quarter 0.6 Third quarter 1.1 Fourth quarter 2.3 . 2001 First quarter 4.8 Second quarter 8.6 Third quarter 12.0 Fourth quarter 15.0 . Chronicle Graphic . Source: CB Richard Ellis (
Many for rent signs everywhere, small and large offices. Many apartments
and homes for rent. Sales of new and existing homes has
slowed, but prices have not dropped. Little wait in lines at stores
and restaurants; traffic is lighter in the morning and evening commute.
Life may return to “normal”.
editor ) ____________________________________________________________ |
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