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May 15, 2001
Leasing News List Tomorrow--Up-Dated---Wednesday ----------------------------------------------------------------------------------------------- LEASING NEWS 5/15/2001 to regularly receive Leasing News kitmenkin@leasing news.org --- ON LINE ( to be posted soon )at LeasingNews.org ------------------------------------------------------------------------------------ Headlines--- The Fed Cuts Rate One More Time--- 50 basis points Equipment Leasing Association New Study First International Bancorp Reports First Quarter $303,000 Income Heller Financial to Relocate Franchise Finance Headquarters Leasing Association Meetings the Next 30 Days Others Say, "Rodi Did Not Miss the Mark" Potpourri Salesman Pay Survey---Continues " I'm sure I can round up a few to go a few rounds with 'Name Withheld'" ###### Denotes Press Release from Company --------------------------------------------------------------------------------------- ############################################################### Citibank Lowers Base Rate
NEW YORK----Citibank said today it has lowered its base lending rate from 7.5% to 7.0% effective Wednesday, May 16, 2001. Citigroup (NYSE:C), the preeminent global financial services company, provides some 120 million consumers, corporations, governments and institutions in more than 100 countries 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 umbrella are Citibank, CitiFinancial, Primerica, Salomon Smith Barney, and Travelers. Additional information may be found at: www.citigroup.com. ################################################################# ( Clients will be asking more what the "interest rate is", mortgage rates, perhaps some car financing, will go down, but don't hold your breathe for a Citibank, Wells Fargo, or most credit card lowering of credit card interest, and American Express won't cut their rate to retailers or late fees, and major corporate borrowers on a non-fixed, floating rate loan, will see lower payments---but not necessarily an extension of new credit. The Prime rate does not have the effect it has had in the past, except make customers ask more about the rate, and makes them more "rate conscious." editor). ---------------------------------------------------------------------------------- Quick Version of the Rate Increase Fed Cuts Interest Rates by Half a Point By JEANNINE AVERSA .c The Associated Press WASHINGTON (May 15) - The Federal Reserve cut a key interest rate Tuesday by a half-point, the fifth reduction this year, in an effort to keep the struggling economy afloat. The Fed said the rate cut was needed to combat various drags on the economy, including a decline in business investment in new equipment. ''This potential restraint ... continues to weigh on the economy,'' Fed policy-makers said in a statement. The Fed cut its target for the federal funds rate, the interest banks charge each other on overnight loans, to 4 percent. Stocks were mixed in the wake of the cut. A half-hour after the Fed's announcement, the Dow Jones industrial was down 3 points and the Nasdaq index had gained 23 points. Many economists had predicted a half-point cut; others expected a quarter-point reduction. Immediately after the Fed's action was announced, Bank of America, Bank One and M&T Bank Corp. reduced their prime lending rates by a half-point, to 7 percent. Other banks were expected to follow. The prime rate is the key benchmark for millions of loans, from home equity and unpaid credit card balances to short-term loans for small businesses. The decision to cut rates came after the Fed's chief policy-making group, the Federal Open Market Committee, met privately. The committee is composed of Fed Chairman Alan Greenspan, Fed governors and five of the 12 presidents of Federal Reserve banks. The Fed said its chief concern remains the threat of the economy stalling and falling into recession. ''The risks are weighted mainly toward conditions that may generate economic weakness in the foreseeable future,'' the Fed said in its statement. The Fed also cut its mostly symbolic discount rate, the interest that the Fed charges to make direct loans to banks, by one-half point to 3.5 percent. The Fed's action comes against the backdrop of a beleaguered manufacturing sector, which many believe is in a recession of its own, and a weakened job market. One of economists' biggest fears is that the nation's unemployment rate, which climbed to 4.5 percent in April, will continue to rise and prompt Americans to cut back sharply on spending and tip the economy into recession. Consumer spending has been the main force keeping the economy afloat, and a fifth rate reduction would aim to keep it that way. The Fed's interest rate cuts lower borrowing costs and are designed to spur consumers to spend and businesses to invest, both of which bolster economic growth. Even with the all the gloomy economic news, there's been some ray of light poking through the clouds. Housing and construction activity, another pillar for the economy, has held up well during the slowdown. And consumers, who account for two-thirds of all economic activity, have continued to spend. Economists are hopeful that the economy, mired in a slowdown since the second half of last year, will return to more healthy growth later this year. The economy grew at an annual rate of 2 percent in the first three months of this year, twice as fast as the 1 percent growth rate registered in the fourth quarter. But many economists believe the economy has lost altitude in the current quarter. The central bank last cut rates April 18, after an emergency telephone conference call convened by Greenspan. It was the second time this year the Fed took the unusual step of changing rates outside its normal meeting schedule. More In Depth Story and Analysis of Rate Cut New York Times Federal Reserve Cuts Rates by Half a Percentage Point By RICHARD W. STEVENSON WASHINGTON, May 15 — The Federal Reserve continued its campaign to reinvigorate the weakened economy today, cutting its benchmark interest rate by half a percentage point for the fifth time in as many months. The central bank said its decision was driven primarily by the deteriorating outlook for businesses, which are slashing their investments in new plants and equipment in the face of declining profits. Today's action reduced the federal funds rate on overnight loans among banks to 4 percent, from 4.5 percent. The decision brought the total reduction since the Fed began cutting rates in January to 2.5 percentage points, making this one of the most concentrated efforts the Fed has ever undertaken to reignite economic growth. The federal funds rate has not been as low as 4 percent in almost seven years, since the Fed finished reviving the economy following the recession of 1990 and 1991. The Fed also cut its discount rate on loans to banks from the Federal Reserve system by half a point, to 3.5 percent, from 4 percent. After fretting for several days that the Fed might limit its rate cut to a quarter of a percentage point, investors bid up stock prices modestly today following the central bank's announcement at 2:15 this afternoon. The economy has thrown off mixed signals since the central bank last cut rates on April 18. Retail sales rose in April, and consumer confidence stabilized, suggesting that consumer spending, which accounts for about two-thirds of the economy, is weathering the slowdown relatively well. Companies made progress in bringing their backlogs of unsold goods and supplies into line with reduced demand. The stock market stabilized. But the economy lost 223,000 jobs in April, the biggest downturn in more than a decade, and the unemployment rate rose to 4.5 percent, from 4.3 percent. And most worryingly to many analysts, businesses continued to slash their capital spending plans. In doing so, they dragged down a segment of the economy that had been a major engine of growth, and raised questions about the sustainability of continued improvements in productivity, the most fundamental measure of long-term economic potential. "The erosion in current and prospective profitability, in combination with considerable uncertainty about the business outlook, seems likely to hold down capital spending going forward," the Fed's policy-setting Federal Open Market Committee said in a statement. "This potential restraint, together with the possible effects of earlier reductions in equity wealth on consumption and the risk of slower growth abroad, continues to weigh on the economy." The Fed gave no signal that it was likely to cut rates again before its next scheduled meeting on June 26 and June 27 — but it did not give any hint either that it has come to the end of this rate-cutting cycle. Indeed, it emphasized that "inflation is expected to remain contained," an indication that it feels it has leeway to cut rates further if data in coming weeks indicates that the economy is growing even weaker. Some economists said they were surprised that the Fed is not more concerned about inflation, given that by most measures price increases have accelerated this year. They suggested that further cuts in interest rates are likely to have little effect on capital spending decisions. While lower interest rates clearly provide a boost to consumer and to interest-sensitive sectors of the economy like housing, they do little to alter the equations faced by businesses deciding whether to modernize a factory or upgrade their computer systems. "The Fed did note that consumption is healthy, that housing is healthy and that inventory adjustment is rapid," said Mickey D. Levy, chief economist at Bank of America. "Obviously they are concerned about capital spending, which is a legitimate concern. But they can't do anything about it. And what really jumps out is that the Fed says inflation is contained, and it's not." -------------------------------------------------------------------------------------------- Equipment Leasing Association New Study Entrepreneur and The Equipment Leasing Association (ELA) are conducting a survey to determine how small businesses are dealing with the changing financial landscape. The study will identify the strategies being employed to leverage capital in the changing marketplace, what factors are being considered when making equipment procurement decisions and small businesses attitudes towards leasing. Please direct your small business customers to http://websurveyor.net/wsb.dll/4270/ELA-entr.htm and encourage them to participate in this survey. -----------------------------------------------------------------------------------------
"Antoines," "Emeril's", "Andrew Yaegers," "Arnouds," "Commander's Palance," "Brennon's" reservations at all these restaurants--food, jazz, wine, song Hope to see many of our friends in New Orleans at the National Association of Equipment Leasing Broker's Conference Saturday, May 19, 3:30pm Leasing News Workshop
Kit Menkin Bob Baker, Wildwood Financial Steve Crane, Bank of the West Leasing, Phil Dushey, Global Leasing Steve Geller, Leasing Solutions Bruce Kropschot, Kropschot Financial Services Bob Teichman, Teichman Financial Training Rob Yohe, Consultant Ginny Young, Brava and Company ---------------------------------------------------------------------------- Salesman Pay ( for a survey we hope to complete soon ) In reference to sales reps pay: We provide "back office functions" (i.e. standard credit, docs, marketing, etc), fax machines, Nextels (any calls over package they are responsible for), business cards, and work space when they're in the office (the majority of them are not...we have 7 people spread from TN to FL). We "pack" commissions 10% and then split (you can call this 45%...I guess the difference is point-of-view), which we pay on the 1st and 15th. Because of intense competition in my area and market, please withhold my name! Name Withheld ------------------------------------------------------------------------------------------ Potpourri-- I didn't have the opportunity to read Bob Rodi's comments regarding the demise of JDR, but would agree in principal with his position for one simple reason - JDR was a very poor company to work with and any time our industry can rid ourselves of these types of companies we are better of - period!! JDR would often change their approval terms, not return fax/phone calls for 2-3 days, funding's would take extra days due to this poor service and basically provide very poor/unprofessional service to our vendors & lessee's. (sound familiar Mr. Chriest??) Forget about "losing another lender" - bad things happen to bad businesses - Good riddance! Keep up the good work Mr. Menkin & Mr. Rodi, Joseph P. Mazzoni JoeMazzoni@aol.com President & CEO North American Funding + + + Re: Denrich I can't help agreeing with Alex Alonso (who I hope is doing well!) Denrich was a great funding source. Their only "quirk" - they would not approve a deal if the principal was over 65! But once you knew that, you didn't send them any old folks any more. Those were the days! Charlie Meaker Mrlease@aol.com Lease Financing, Inc. 800-478-2330 or 520-398-2652 Since 1987 - Financing For Business Equipment, Software, and Modular Buildings --- + + + Re: To Mark Speros - If you need any help outside that hotel let me know . I 'm sure I can round up a few to go a few rounds with "Name Withheld" - June Sciotto/Regal Finance june@theregalgroup.com + + + I believe Frank and Perry are having a dry one right now Jim Fleming nationalbusinesscredit@yahoo.com + + + I am surprised that a class act like Rob Day would even compare his operation to that of JDR Capital. Pawnee and Financial Pacific are both companies who specialize in challenged credits. They tend to these transactions with great dispatch and they maintain their character and ethical perspective while doing so. It is fairly obvious to any industry observer that a guy like Rob Day and a company like Pawnee have a long term strategic plan to which they are committed. Mr. Day, unfortunately, totally missed my point. I would actually be quite surprised if Pawnee and JDR shared many of the same brokers. I have always thought that Pawnee was far more selective in their choice of business sources. When a company like JDR goes down, it isn't a slap in the face to anyone in the leasing business. In fact, the slap in the face occurs when a company like JDR can reportedly accumulate $180 Million in volume over a two to three year period. I certainly do not consider anyone who is hardworking, ethical, and committed to the long term success of their company and the industry as a whole to be an "after thought". In fact I have the utmost respect for anyone who can carve a viable business in a niche market such as Rob has done with Pawnee. If Rob, however, is under the impression that JDR was such a company then his information about that operation is vastly different than my own. With respect to my status (current or former) with the UAEL it is precisely this reason that I do speak up on such issues. I wish that the leadership could be even more vocal about who or what becomes a member but unfortunately our lawyers tell us we can't, due to potential anti-trust violations. Unfortunately we are relegated to doing "post mortems" on companies in our industry, both bad ones and good ones. If leaders in the industry, (a category in which I would include Rob Day, regardless of association status or membership) don't use their experience to identify the mistakes from the successes then I am not certain how we will ever teach the young or less experienced people in this industry right from wrong. I will continue to speak up because I feel as though I owe the younger members of our business that courtesy. A great deal of my success stems from the fact that WAEL/UAEL provided leadership and mentors over the years that showed me, and others like me, that one can take the higher road to success. Bob Rodi www.leasenow.com drlease@leasenow.com 1-800-321-LEAS (5327) x101 ( Rob Day did not wish to respond. Or to put it another way, he didn't want to wrestle with Mr. Rodi. editor ) ------------------------------------------------------------------------------------------- Meetings the Next 30 Days ----------------------------------------------------------------------------------------------- Last Minute Registration is Available for National Association of Equipment Leasing Brokers New Orleans May 17-20
* 30 Educational Workshops * Chances to win A Palm Pilot * Chance To Win A Round Trip Airline Ticket To Europe * Social Events * All the fun and excitement of New Orleans * Plenty of time to meet with the MONEY SOURCES!
o register for the NAELB Conference:t www.naelb.org/meeting%20promo.pdf
or e-mail: Buzz Thomas bthomas@clemonsmgmt.com ----------------------------------------------------------------------------------------- May 19-20 3rd Annual Mid-American Equipment Leasing Association Warm Up Golf Weekend [ MAEL ]
Location : Ruffled Feathers & Course at Aberdeen
The 3rd Annual MAEL Warm Up Golf Weekend features tee times at: Ruffled Feathers in Lemont, IL on Saturday, May 19 (arrive by 10am) The Course at Aberdeen in Valparaiso, IN on Saturday, May 20 (arrive by 10:30am). Prices are per day, per person, and include transportation. Ruffled Feathers $150 for member co. attendees $200 for non-member co. attendees** The Course at Aberdeen $150 for member co. attendees $200 for non-member co. attendees** For on-site registrations or payments add $35 per attendee. MAEL's "no-show" policy applies for this event. To register on line: https://www.mael.org/events/golf_register.asp May 21st, 2001
17th Annual MAEL Golf Invitational [ MAEL ]
Location : Harborside International
Registration for the event will begin at 10:00 a.m. and lunch begins at 11:00 a.m. with a shotgun start at noon sharp. The Dinner/Reception will begin at approximately 5:30 p.m. and go until 9:30 p.m. Golf, Reception & Dinner - $225 for member co. attendee $800 for a member co. foursome $275 for a non-member co. attendee** $1000 for a non-member co. foursome** Reception & Dinner Only - $85 for member co. attendee $135 for non-member co. attendee** For on-site registrations or payments add $35 per attendee. MAEL's "no-show" policy applies for this event. To register on line: https://www.mael.org/events/golf_register.asp ------------------------------------------------------------------------------------------ Equipment Leasing Association Credit & Collections Management Conference June 3-5, 2001 * Minneapolis Marriott City Center * Minneapolis, MN Conference Home | Events Home Registration | Schedule | Information Exhibitor Information | Exhibitors This event page sponsored by:
Quality Counts! Is Now the Time to Review your Credit Policies & Procedures? Have you properly prepared for the Current Economic Climate? What Should Buyers and Sellers of Portfolios Consider in light of Current Market Conditions? How might the Federal Reserve's Monetary Policy impact your business? Has technology increased your ability to process new applications and minimize fraud risk? How can Credit and Collections Managers be more effective in mitigating their exposure? In a tight funding market like the one we are in today, equipment leasing and finance professionals find themselves returning to the fundamental credit evaluation policies and procedures they have always had in place. This year's Credit and Collections Management Conference is designed to help companies get a better understanding of the forces impacting their decisions today...and what steps they can take to help themselves through today's market. Who Should Attend? Senior vice presidents and vice presidents of credit, credit mangers, credit analysts, documentation specialists and collection managers from small- and mid-size companies. Those interested in Credit and Collections, might also try: The Effective Credit Underwriter A web-based course designed to help credit analysts and others in the equipment leasing and finance industry increase their proficiency in assessing the credit worthiness of middle market business transactions. The course includes the following sections: a Credit Skills Diagnostics, a Personal Learning Plan of up to 54 lessons, a Case Study Simulation and a Final Exam. The course can be worked through independently or with the assistance of an online mentor. ----------------------------------------------------------------------------------------------- Thank You Just wanted to drop you a line to let you know how much I look forward to Leasing News.....it's a great way to keep up with what's going on in our industry and help keep focused on what we, as brokers, are dealing with in this ever-changing business. Keep up the good work! Rosann Glandt Gemco Leasing rmglandt@aol.com + + + Thanks you for your very informative information. We look forward to it everyday. Thank you Tomi Avila <tavila@SDICapital.com> -------------------------------------------------------------------------------------------- ################################################################ First International Bancorp Reports First Quarter 2001 Results HARTFORD, Conn.--May 15, 2001--First International Bancorp, Inc. (NASDAQ:FNCE), parent of First International Bank, today reported net income of $303,000 ($.04 per diluted share) for the quarter ended March 31, 2001, compared with $2.1 million ($.26 per diluted share) in the same period last year. Total gains on loan sales in first quarter 2001 were $5.0 million, approximately the same as first quarter 2000, as increased gains from the sale of federally guaranteed loans were offset by a decline in gains from the sale of loan-backed securitizations following the company's exit from new securitization activities after 2000. Costs impacting first quarter 2001 net income included $625,000 ($.08 per diluted share) related to the company's pending merger with United Parcel Service, Inc. (NYSE:UPS) and $497,000 ($.06 per diluted share) for an impairment charge on an interest-only strip held for one of the company's seven securitizations. Loan originations during the first quarter of 2001 were $114.1 million, representing an 11% increase over the $102.5 million in loans originated during first quarter 2000. The company increased the percentage of federally guaranteed loans to 82% of total originations in first quarter 2001 from 65% of total originations in first quarter 2000 in response to market demand from its core client base of small industrial businesses, the slowing economy, and the heightened risk environment. Total loans managed by the company were $1.3 billion at March 31, 2001, an 18% increase from $1.1 billion at March 31, 2000. First International Bank reported balance sheet non-performing loans at March 31, 2001 of $5.3 million, representing 3.27% of balance sheet loans, compared with 2.75% ($4.2 million) at December 31, 2000 and 3.20% ($4.6 million) at March 31, 2000. Net charge-offs for first quarter 2001 were $773,000, commensurate with fourth quarter 2000 net charge-offs of $754,000. The company made a provision for loan losses of $1.0 million during the first quarter, bringing the Allowance for Loan and Lease Losses to $5.8 million at March 31, 2001. Brett N. Silvers, Chairman and CEO, commented, "The quarterly results reflect solid performance in our small business lending niche, especially in light of the time and attention our staff has dedicated to pre-integration activities related to our pending merger with UPS." In January 2001, First International entered into a definitive merger agreement with UPS. "We have made good progress toward achieving the conditions for closing with UPS early in the third quarter," stated Silvers. As required by the UPS merger agreement, the company announced a definitive agreement on May 2, 2001 to sell its FDIC-insured deposits to Hudson United Bank. A special meeting of shareholders to formally consider the UPS transaction will be held on June 1, 2001. About First International Bank and First International Bancorp Inc. First International Bank (www.firstinterbank.com), a world leader in the use of SBA, USDA and Export-Import Bank loans, provides innovative credit, trade and financial solutions for small and medium-sized industrial businesses. The company has more than 100 experienced lending officers located in 15 U.S. offices, and 14 international representatives. In 2000, the company originated more than $500 million in loans primarily within its industrial niche, and closed the year with a managed loan portfolio of $1.3 billion. Established in 1955, the bank is a subsidiary of publicly traded First International Bancorp Inc. (NASDAQ:FNCE), with headquarters in Hartford, Connecticut. ################################################################ Heller Financial to Relocate Franchise Finance Headquarters
CHICAGO, May 15 /PRNewswire/ -- Heller Financial (NYSE: HF) today announced that it will relocate its Franchise Finance unit from San Diego to Heller's corporate headquarters in Chicago. The move will leverage Chicago's existing core credit operations expertise, streamline processes and procedure s, and increase efficiencies. The unit will be led in the interim by Laird Boulden, Group President of Commercial Equipment Finance. "Heller has had a long-standing commitment to financing convenience stores, retail petroleum locations, casual dining and quick serve restaurants," said Boulden. "Bringing the Franchise Finance headquarters to Chicago will allow us to efficiently enhance the service we provide to franchisees as w e continue to focus on this important market." Heller Financial, a self-funded financial services company, has been a consistent financing source for this market for nearly a decade. The move to Chicago will streamline this successful operation. It is scheduled to be completed within 90 days. Commercial Equipment Finance provides sophisticated, structured lease and loan products for growth-oriented companies. The group provides financing for a variety of industries, and has also developed specialized expertise in Special Purpose Property, Business Aviation and Franchise Finance. In 2000, this group within Heller Financial completed more than $1 billion in new business. Heller Financial, Inc., is a worldwide commercial finance company providing a broad range of sophisticated, collateralized financing solutions. With $20 billion in total assets, Heller offers equipment financing and leasing, sales finance programs, collateral and cash flow-based financing, financing for healthcare companies and financing for commercial real estate. The company also offers trade finance, factoring, asset-based lending, leasing and vendor finance products and programs to clients in Europe, Asia and Latin America. Heller's common stock is listed as "HF" on the New York and Chicago Stock Exchanges. Heller can be found on the World Wide Web at http://www.hellerfinancial.com . http://tbutton.prnewswire.com/prn/11690X27380540 SOURCE Heller Financial, Inc. |
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