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May 30, 2001 Headlines----
UAEL Membership Down 47% United Capital/Lehman Bros. Sterling Bank Leasing CSMI ( Credit OnLine ) Becomes Part of First American Corp. “Advanta Seeks Its Niche,” Philadelpha Business Journal Heller Financial Chooses PeopleSoft Hypercom /Golden Eagle Leasing Completes Leasing Loan Securitization GE Capital Loses $1.2 Billion on Derivatives Fitch Downrates Unicapital????? Charter One Registers !00,000 Customer on Line PBDS Announces Partnership with MicroBilt Plastic Leasing Card Marketers Beware!!! New Federal GLB Privacy Law July 1 United Association of Equipment Leasing ( UAEL ) Membership Down 47% “ Right now it stands at 310,” UAEL Membership Director Bill Grohe said.” This includes 44 new members. As we enter our Membership contest, we hope to add another 100, perhaps 150 new members.” The membership count at year-end was 589.* He stated UAEL has completed its membership renewals. He said there were no statistics available to see what the past fall off of non-renewals have been. According to past issues of UAEL Newsline, the non-renewal has ranged from 18% to 20% in previous years. “ This is normal, I think in this economy, “ he said. “ There are many companies not around any more, and others who are cutting back. “ A flyer called “ UAEL Grapevine—May 2001” from the desk of Joanie Dalton, Managing Director, has gone out by mail and e-mail to all members. It states, “ The Member-Get-A-Member Contest was kicked-off at the Spring Education Conference and our Membership Chair, Ginny Young of Brava Capital has put out a challenge to anyone who can beat past contest winners Bob Baker, CLP, and Jim Lahti, CLP that she will throw in a case of ‘fine California Wine’.” You may contact Joanie Dalton or Bill Grohe at 510-444-9235 or via their web site: www.uael.org or: joanie@uael.org.....bill@uael.org * http://www.leasingnews.org/links_section.htm --------------------------------------------------------------------------------------------- United Capital/Lehman Bros. --Redux It's been awhile since I've read any new information on United Capital. I am an ex-employee of theirs and recently ran into a few people I used to work with at United and they filled me in on quite a few new rumors that I had previously heard nothing about. Apparently Lehman Brothers has auctioned off United Capital's portfolio and no one I've spoken with seems to know who bought it or how much they paid for it. I was also told that at first Lehmen tried to sneak the sale through without United's knowledge and their 1st attempt to sell it was stopped by a court order. Although I believe the employees I was talking to were telling me the truth I find it kind of difficult to imagine a secured lender of Lehman's standing having to sneak around like a repo-man in the middle of the night. In an attempt to verify some of these rumors myself I contacted a friend of mine who still has some ties with United and although he was unable to provide any additional information on the above topic he did mention to me United Capital has retained a large national law firm and has been gathering as much information as it can in preparation for a lender liability suit against Lehman and it's officers. I was with United in November and December when the crap really hit the fan and I was actually in the room to hear the answer to United Capital's request for money or the release of imperfected collateral in an effort to clean up all partially funded transactions, Lehman's representative simply stated "why should Lehman care, the lessee's won't be suing us!", needless to say I won't be shedding any tears if Lehman loses this one. Have you heard any additional information that might confirm or refute these rumors? Sincerely, Anonymous Ex-United Capital Employee = = = = Many companies looked at buying the United Capital portfolio. None found it suitable, poor quality (superbrokers paper) and no remaining reps and warrants since United was dead. Then Lehman looked for a servicer again obtaining several bids. The portfolio is currently being serviced under private label lock box by Information Leasing Corp, a sub of Provident Bank. As far as the Lessees know United Capital is still alive. I also understand ILC is servicing at least a portion of the Finova portfolio in the same manner. ILC is gearing up in the small ticket market place which makes sense because Provident is the largest credit card issuer. Highly Reliable Source Name Withheld -------------------------------------------------------------------------------------------- Sterling Bank Leasing Gerald Ennella has resigned as Manager of Sterling Bank Leasing. Robert Krause has resumed his duties as the head of this division of Sterling National Bank, on an interim basis. ### #### ### ###################### ################## Hypercom Corp. Completes Securitization of Golden Eagle Leasing Loan Portfolio
PHOENIX----Hypercom Corp. (NYSE: HYC) Wednesday announced that it has completed the securitization of substantially all the lease receivables in the portfolio of Golden Eagle Leasing Inc., its micro-ticket leasing subsidiary. The securitization included $45.6 million in principal balances of leases, with bonds issued to investors backed by these leases having a total principal amount of $31.9 million. The bonds bear interest at 8.58 percent per annum and have an expected term of about 66 months. A reserve amount of $1.8 million was established at closing. Hypercom used the funds generated by the securitization to pay off conduit facilities relating to Golden Eagle Leasing totaling $23.4 million. It also used $4 million to pay down Hypercom's revolving line of credit, which stood at $32.1 million after the pay down. The securitization will be accounted for as a financing. The company also disclosed that, although the latest amendment to its forbearance agreement with its principal bank lending group had expired on May 15, 2001, the banks have taken no adverse action and negotiations concerning the terms of a new forbearance agreement continue. Jonathon Killmer, executive vice president and chief financial officer of Hypercom, commented, "We are continuing to pursue replacing our current senior credit facility with another senior credit facility, as well as various other forms of financing transactions." Christopher S. Alexander, president and chief executive officer, Hypercom Corp. added, "In addition to the announcement of the securitization, we also want to make it very clear that the business turnaround plan we set in motion a few months ago is working well. "Customers continue to embrace the concept of the ePic (ePOS-infocommerce) technology with its value-added applications, such as electronic receipt capture, ICEPAC(TM) (static advertising and coupons) and electronic statements, and the ePic ICE(TM) (Interactive Consumer Environment) family of Internet-enabled terminals." About Hypercom Corp. Hypercom Corp. is a leading global provider of electronic payment solutions that add value at the point-of-sale for consumers, merchants, and acquirers. Hypercom's products include secure card payment terminals and web appliances, networking equipment, and software applications for e-commerce, m-commerce, smart cards, and traditional payment applications. Headquartered in Phoenix, Hypercom maintains an installed base of more than 4 million card payment terminals, which operate seamlessly with the products of its Network Systems Division. These solutions are installed in over 100 countries and conduct more than 2.85 billion transactions annually. Hypercom's Internet address is www.hypercom.com. Hypercom is a registered trademark of Hypercom Corp. ePOS-infocommerce and ICE are trademarks of Hypercom Corp. All other products or services mentioned in this document are trademarks, service marks, registered trademarks or registered service marks of their respective owners. Forward-Looking Statements This press release includes statements that constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Reform Act"). Hypercom Corp. claims the protection of the safe-harbor for forward-looking statements contained in the Reform Act. These forward-looking statements are often characterized by the terms "may," "believes," "projects," "expects," or "anticipates," and do not reflect historical facts. Forward-looking statements involve risks, uncertainties and other factors which may cause actual results, performance or achievements of Hypercom to be materially different from those expressed or implied by such forward-looking statements. Factors that could affect Hypercom's results and cause them to materially differ from those contained in the forward-looking statements include uncertainties relating to: -- The company's need to maintain forbearance from its existing lenders, which is currently on day-to-day status, and to complete new financing transactions; its ability to continue to obtain raw materials and other inventory from its vendors; its ability to improve product quality, security and reliability, and manufacturing processes, especially for new products and product extensions; market acceptance of products and services; its ability to increase gross margins and reduce expenses; increasing competition especially relative to market size and growth rates; economic conditions; industry and technological changes; the composition, timing and size of orders from major customers; inventory obsolescence; cannibalization of legacy products by new products; the possibility of asset write downs or increases in reserves; and risks associated with international operations, including currency fluctuations; -- Risk factors and cautionary statements made in Hypercom's Annual Report on Form 10-K for the period ended Dec. 31, 2000 and Quarterly Report on Form 10-Q for the period ended March 31, 2001. -- Other factors that Hypercom is currently unable to identify or quantify, but may arise or become known in the future. In addition, the foregoing factors may affect generally Hypercom's business, results of operations and financial position. Forward-looking statements speak only as of the date the statement was made. Hypercom does not undertake and specifically disclaims any obligation to update any forward-looking statements. CONTACT: Hypercom Corp., Phoenix Jonathon E. Killmer, 602/504-5000 Email: jkillmer@hypercom.com Maureen McGarrigle, 602/504-4802 Email: mmcgarrigle@hypercom.com ## # # # # # # # # # ## # # ## # ## ############# #### #################### #### Alliance Bancorp Announces Stockholder Approval of Merger Agreement With Charter One Financial
HINSDALE, Ill.----Alliance Bancorp (Nasdaq: ABCL) today announced that stockholders have approved the Agreement and Plan of Merger with Charter One Financial, Inc. of Cleveland, Ohio. Under the merger agreement, each share of Alliance Bancorp common stock is to be converted into the right to receive $5.25 in cash and 0.72 shares of Charter One Financial common stock. In addition to today's shareholder approval, the merger requires various regulatory approvals. The Federal Reserve Board has approved the merger, the Office of Thrift Supervision has deemed the merger application complete, and all other regulatory steps have been accomplished. As a consequence, the merger is on track to be completed in early July. Alliance Bancorp is the holding company for Liberty Federal Bank, which will be merged into Charter One Bank, F.S.B. Charter One currently has 423 branch locations (436 after the net additions from Alliance) in Ohio, Michigan, New York, Illinois, Massachusetts, and Vermont. Their diverse products include: consumer banking, indirect auto finance, commercial leasing, business lending, commercial real estate lending, mortgage banking, and retail investment products. For additional information about Charter One, including press releases and investor presentations, investors are directed to their website: www.charterone.com. Alliance Bancorp's common stock trades on the Nasdaq National Market tier of the Nasdaq Stock Market under the symbol: ABCL. The common stock of Charter One Financial Inc. trades on the New York Stock Exchange under the symbol: CF. Charter One has approximately $34 billion in total assets ($36 billion after the merger with Alliance), making it one of the 30 largest bank holding companies in the country # # ############## ### ### ##### ######################## ####### Credit Management Solutions, Inc. Stockholders Approve Merger
ANNAPOLIS JUNCTION, Md., -- Credit Management Solutions, Inc. (Nasdaq: CMSS) announced today that its stockholders have approved the merger of CMSI with a subsidiary of The First American Corporation. Under the terms of the transaction, upon the closing CMSI stockholders will receive 0.2841 of a share of First American common stock for each outstanding share of CMSI stock held by them. Approximately 2,273,000 shares of First American common stock will be exchanged for all outstanding shares of CMSI. First American will also assume all outstanding options to purchase shares of CMSI common stock. About CMSI Since it was founded in 1987, CMSI has been a premier provider of credit automation software and services, including Internet-based online lending and leasing technology. Corporate clients include leading organizations in the banking, finance, automotive, student lending, and telecommunications industries. The Company's e-commerce subsidiary, Credit Online, Inc., credit- enables business-to-business and business-to-consumer transactions through its Internet gateway and funding exchange network. Its patented CreditOnline(TM) and CreditConnection(R) technology links credit originators (such as automobile dealers) and borrowers with an extensive network of leading prime and non-prime lenders. Through its CMSI Systems, Inc. subsidiary, CMSI licenses credit decisioning and other automation systems and services for consumer and business credit that have been the choice of some of the world's most demanding credit grantors. CreditConnection and CreditOnline are trademarks or registered trademarks of Credit Management Solutions, Inc. Press releases and other CMSI information can be found on our Web Site: http://www.cmsinc.com . This press release contains statements which may constitute forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Statements in this press release that are not strictly historical are "forward looking" statements which are subject to the many risks and uncertainties that exist in CMSI's operations and business environment. These risks and uncertainties may cause actual results to differ materially from expected results and include, but are not limited to, the risk that CMSI's anticipated merger with The First American Corporation may not be completed and the risks detailed in CMSI's reports and other documents filed from time to time with the Securities and Exchange Commission. SOURCE Credit Management Solutions, Inc. CO: Credit Management Solutions, Inc.; The First American Corporation # # # ########### #### #################### ##################### # # # # It has been a while since you and I last spoke and I want to add my compliments to the many you have already received about Leasing News. You are really providing a timely and much needed service to the industry. My question to you is how do you find time to work in a little leasing yourself? Keep up the good work! Ted Parker cclcjp@ix.netcom.com Ted --------------------------------------------------------------------------------------------- Once an industry darling, Advanta seeks its niche (Philadelphia Business Journal) By Andy Gotlieb Started in 1951 with just $30, Advanta Corp. by the mid-1990s had become a financial services powerhouse, known for its consumer and business credit cards, mortgages, equipment leasing and auto insurance. Annual revenue topped $1.2 billion, the company ranked as the nation's eight-largest credit-card company and the stock price climbed above $60 per share. Today, much of that is gone -- and that's OK with Chairman and CEO Dennis Alter and William A. Rosoff, the company's vice chairman and president. Having jettisoned everything except for its business credit cards, Advanta's looking to become a niche player in a single field. "We found the business card ... was not only growing very nicely, but was also delivering the best returns on any business we were in," said Alter, whose father Jack founded what was then called Teachers Service Organization as a credit union for educators. Alter said a 2 percent return on assets was possible for the newly constituted Advanta, with 1.7 percent to 1.8 percent likely in 2001. Banks generally shoot for a 1.5 percent return on assets. And Rosoff predicted 30 percent to 50 percent growth both this year and next. The revamping marks a sea change for Advanta. After going public in 1985, the company thrived through the mid-1990s, showing net revenues of $851 million in 1996, a 38 percent increase from the previous year. Credit cards accounted for a bulk of the business. But Advanta announced a $20 million loss in the first quarter of 1997, thanks to worse-than-expected credit-card delinquencies and a failure to keep new customers. At the time, the company considered a sale and hired a merger and acquisition outfit to review its business strategy. Radical surgery ensued to staunch the red ink. By October 1997, Advanta had sold its consumer-credit operation to what was then Fleet Financial for about $1.3 billion, a $500 million after-tax gain. Alter noted that Advanta got into the credit-card business in 1982 by buying a bank in Delaware for $2.1 million. Selling the credit-card operation for more than $1 billion, while retaining the bank, meant a healthy return. In October, Advanta announced it would sell its mortgage operations, acquired in the mid-1980s, to Chase Manhattan Mortgage Corp. for more than $1 billion, creating a $60 million after-tax gain. That deal closed in the first quarter of this year. "It's a grind-it-out business," Rosoff said of mortgages, estimating it would have taken at least three more years to produce a good return. Advanta once held $10 billion in assets through its mortgage business, Alter said. That's all gone now. Also in the first quarter, Advanta announced it would discontinue its equipment-leasing business and negotiated an early termination of its alliance with Progressive Casualty Insurance Co. to directly sell automobile insurance. That leaves business credit cards as a main business line and annual revenues projected around $260 million. Whether Advanta's shares ever climb back to their historic highs is anyone's guess. The company's "A" shares of stock go for about $15, while "B" shares fetch about $13.50. "Our goal is not size," Rosoff said. "Our goal is to have a place to thrive." Business credit cards tend to be an afterthought for the larger card issuers, Alter said. While the 100 million credit-worthy consumers in the United States already hold 500 million bank credit cards, just one in four of the 40 million small businesses -- defined as those with less than $10 million in sales and under 100 employees -- has a card. "It is not saturated. It is not oversold," Alter said, adding that Advanta has nearly 1 million business-card customers. "Price competition has not reached it the same way it has the consumer side." "Mastercard tells us we're the second or third largest issuers of Mastercards in the country to small businesses," he continued. Analyst Todd Pitsinger of Friedman Billings Ramsey & Co. in Arlington, Va., approves of Advanta's strategy. He rates the company a "buy." But Pitsinger did say the single-minded strategy could have pitfalls, even if few competitors are currently pursuing the same strategy. "There can be periods of time when the competition can act irrationally, minimizing your returns," he said. Rosoff discounted that, saying there was room for competitors in the business credit-card arena. "It's not that for them to get a dollar, we have to give up a dollar," he said. The struggling economy may, at least temporarily, play into Advanta's hands. According to the latest Phoenix Management Services of Chadds Ford quarterly lending survey, two-thirds of lenders said the slowdown would reduce the availability of loans to small- and middle-market companies. While Alter and Rosoff are confident about Advanta's new future, the company's still experiencing financial struggles as it reorients itself. Last year, Advanta reported a net loss of $156.7 million on revenues of $292.2 million. In the first quarter of 2001, the company touted that its business cards segment of $1.78 billion in managed receivables posted net income of $8.27 million. But the company as a whole lost $29.43 million on gross revenues of $64 million. Discontinued operations accounted for $8.4 million pre-tax of that loss. Another $4.1 million went for severance and outplacement costs for 69 employees terminated because of the restructuring. Through that reorganization, the company did retain Advanta Partners, its venture capital affiliate. Advanta Partners lost $7.82 million during the quarter. "The investments have synergy with what we're doing," said Rosoff, noting that the companies Advanta Partners helps bankroll include businesses such as a collection agency. Despite the poor first quarter, the venture capital affiliate has returned more than 30 percent compounded annually over the past six or seven years, Alter said. Alter looks forward to reviewing the second-quarter financials. The quarter will mark the company's first as primarily a business credit-card provider. # # ## ## ################################## #### ########### Charter One Registers its 100,000th Online Customer
Five-Month-Old Site Has Generated 600 Customers a Day and National Accolade CLEVELAND, -- Five months after its launch, www.charterone.com , the online banking and bill payment site for Charter One Financial, Inc. (NYSE: CF), has registered 100,000 enrolled users. Since its December introduction, the site has been well received by both new and existing customers and has been named one of the top ten online banking sites by Gomez Inc. Charterone.com offers a wide variety of services including totally free bill payment, electronic bill presentment and free wireless access. "We took the time to develop a sound strategy that would enable us to offer financial products and services that our customers want now and in the future," said Michael Dobbins, senior vice president, Charter One. "Thanks to this strategy, we have successfully met all of our launch target dates, far exceeded our enrollment and new product sales projections and have created a very user friendly site." Earlier this month Charter One began offering online small business services, including online and wireless access, totally free bill payment, the ability to check current lending rates and apply online for commercial mortgages, lines of credit and term loans. Charter One has also instituted several unique programs to help encourage enrollment and online usage. For example, through its One-Click Fund, Charter One sets aside money to fund computers for schools within their branch trade areas. To date, the fund already has more than $60,000 earmarked for new computers. In addition, Charter One has offered a limited-time promotion that allows customers enrolled in the Charter One MegaRewards debit card program to automatically earn one point for every dollar in Internet-based bill payments they make. "We are pleased that our Internet initiatives are doing so well," said Mark Grossi, executive vice president, Charter One. "Obviously, generating 100,000 users in just five months, given the size of our household base, is a very big deal. We think that the services we've added recently for small business customers will be just as successful." Grossi continued, "We now have almost 30,000 bill payment users who, after just five months, are already doing over $24 million in online payments. Not only is this an impressive number, but it is growing dramatically each month." Charterone.com ranked eighth overall on the Gomez Winter 2000 Internet Banks Scorecard(TM) rankings. In addition, charterone.com ranked third for the 'Internet Transactor' and 'Saver' customer profile categories. Gomez defines 'Internet Transactors' as customers who are interested in simplifying and automating as much of his or her transactional needs as possible, and 'Savers' as customers who seek high yields and expect low fees. Charter One has approximately $34 billion in total assets, making it one of the 30 largest bank holding companies in the country. The Bank has 423 branch locations in Ohio, Michigan, New York, Illinois, Massachusetts and Vermont. The branch locations operate under the Charter One name in all areas except in Michigan, where the Bank is known as First Federal of Michigan. The Company's diverse product set includes: consumer banking, indirect auto finance, commercial leasing, business lending, commercial real estate lending, mortgage banking, and retail investment products. For additional information, including press releases and investor presentations, investors are directed to Charter One's Web site: www.charterone.com . SOURCE Charter One Financial, Inc. # # ############### #### ########################### ######### GE Capital Loses $1.2 Billion on Derivatives (Bloomberg) By Tom Kohn General Electric's finance subsidiary lost $1.2 billion in the derivative markets in the first quarter, while |