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November 21, 2001 Republic
Leasing of South Carolina Sold We will have a Thanksgiving Edition ( Up-dates, Dwight Galloway Speaks Out, The Perfect Storm abridged ) #denotes press release ___________________________________________________________________________ Republic Leasing of South Carolina Sold As reported by Leasing News, Republic Leasing of South Carolina has been for sale for several years. We recently reported about Netbank being the number one suitor. What happened is Netbank wanted to get into the commercial end, as they have been very successful in their growth of consumer customers. So they bought the mortgage company that owns Republic Leasing of South Carolina. Dwight Galloway then receives the best Christmas present ever, as he states his current boss becomes the CEO, and they want him to continue what he is doing, at a lower cost of funds, and a great competitive advantage in the marketplace. Exclusive Comments from Dwight Galloway tomorrow in our Thanksgiving edition. Here is the press release from Netbank. ### ############################ ########################## ########## NetBank,
Inc. Reaches Definitive Agreement Combination Will Create a Diversified Financial Services Powerhouse That Leverages Technology to Create Greater Customer and Shareholder Value ATLANTA ¾ ¾ NetBank, Inc. (Nasdaq: NTBK), the holding company for the country’s largest independent Internet bank, NetBank® (www.netbank.com), Member FDIC and Equal Housing Lender, today announced a definitive agreement to acquire Resource Bancshares Mortgage Group, Inc. (Nasdaq: RBMG; www.rbmg.com), a wholesale mortgage banking company and financial intermediary focused on the purchase, sales and servicing of residential, single-family first mortgage loans through a nationwide network of mortgage brokers and correspondent banks. Terms of the agreement call for common shareholders of RBMG to receive 1.1382 shares of NetBank common stock in exchange for each share of RBMG common stock. The acquisition is part of the bank’s investment strategy and builds on its purchase earlier this year of Market Street Mortgage, a direct-to-consumer mortgage lender based in Clearwater, Florida, with 42 offices in 10 states. RBMG’s conforming mortgage business will operate as a wholly owned subsidiary of the bank. Based on third quarter results of this year, the combined company will have assets totaling $3.6 billion and approximately 1,950 employees. The combined company’s stock will trade on Nasdaq under the NetBank name and ticker symbol. The acquisition is expected to close within the first half of 2002, possibly by the end of the first quarter, and is subject to normal shareholder and regulatory approval. The two companies have complementary strengths that when combined represent greater earnings opportunities and exceptional business synergies, including: · A lower-cost source of funding for the mortgage business through the bank’s proven efficiency in attracting deposits on the Internet; · Improved means for the bank to deploy deposits into sound, higher-yield assets; · Further diversification of the bank’s income stream, including increased fee income; · Greater cross-selling opportunities, whether the customer relationship begins on the mortgage or banking side of the business; and · Further depth of management that mixes the asset-generation experience of the mortgage business with the technology and new media marketing expertise of the bank. “This acquisition is particularly significant,” said D.R. Grimes, CEO, NetBank. “In many ways, it will complete our transition from a start-up retail bank into a sizeable, diversified financial services institution. Over the past year, we have talked about our effort to strategically build out the asset side of the bank’s balance sheet to create greater value for our shareholders. With Market Street Mortgage, we were able to enter the retail lending business with a seasoned management team and increase our overall earnings immediately. RBMG represents the same opportunity on a larger scale within the wholesale industry.” “Beyond the operational synergies that exist between the companies, we share a customer-centric corporate culture and a focus on continually growing our core profitability,” said Douglas K. Freeman, CEO, RBMG. “Both companies share a reputation for being an innovator in leveraging technology across their business to improve internal efficiencies and better serve their customers. Together, we will have tremendous intellectual capital and skill sets to build on.” Following the successful completion of the acquisition, T. Stephen Johnson and Grimes will continue as Chairman and Vice Chairman of the combined company. Freeman will serve as CEO. The board of directors will consist of 11 members — 6 from the NetBank board, 4 from the RBMG board and one member who currently serves on both boards. Existing management teams will oversee the respective businesses. About NetBankâ NetBank, Inc. (Nasdaq: NTBK) is a financial services company that has recorded 14 consecutive quarters of profitability to date. Its wholly owned subsidiary, NetBank, Member FDIC, currently has $2.5 billion in assets and serves customers in all 50 states and 20 foreign countries. NetBank shares the operational cost savings of its branchless business model with customers through high interest rates on deposit accounts and reduced- or no-fee banking services. The bank offers a comprehensive line of banking, brokerage and lending products along with innovative services. Customers enjoy free interest-bearing checking with an ATM or Visa® Check Card, free unlimited online bill payment and presentment, wireless account access and an account consolidation service that allows them to review their online accounts at other institutions through the NetBank Web site. Readers of Worth honored NetBank as a top online bank in the magazine’s 2000 and 2001 “Readers’ Choice Awards.” For more information, visit NetBank at www.netbank.com, or call 1-888-BKONWEB (256-6932). About Resource Bancshares Mortgage Group, Inc. Resource Bancshares Mortgage Group, Inc. (Nasdaq: RBMG) is a financial services company primarily engaged in the business of mortgage banking. Through its wholly owned subsidiaries, RBMG works with correspondent lenders and brokers to purchase, sell and service agency-eligible and sub prime residential, single-family first-mortgage loans and to purchase and sell servicing rights associated with agency-eligible loans. More information about RBMG can be found at www.rbmg.com. ### ( Lease News has written and watched the growth of Netbank, mentioning this institution as the leader in internet banking. editor ) ---------------------------------------------------------------------------------------------------------- “Herd of Cattle” is Why Commercial Money Center Was Kicked out of NAELB Dear NAELB members: The Board of Directors has unanimously voted to expel Commercial Money Center (221West Crest Street, #200, Escondido, California ) for membership in the National Association of Equipment Lease Brokers based on the filings of a complaint by a member for ethical violations. The action was taken in accordance with the NAELB ethics procedures. As always, the NAELB advised that members conduct business with other members so that the ethics program can benefit our members. Sincerely Mike Meacher
Reached at the Eastern Association of Equipment Leasing Conference in New Jersey, where he was not only a host and sponsor, but speaking, Bill Hansen explained his side of the story: “ This transaction was complete, the insurance bond purchased, the money put up, when the vendor of the transaction sold the collateral, which was a herd of cattle. We told the broker and the lessee to get another herd and we will put it in the transaction. The lessee said he did not want to get another herd. We told them since we had purchased the bond, according to section 4 of our contract, they don’t get the money back. We will apply it to a new lease from the lessee.” The broker, a member of the National Association of Leasing Brokers went to the Standards and Ethics Committee, making a formal complaint. Hansen said he sent in a letter explaining the situation, a copy of the lease contract, and pointed out section 4 and section 20 o9f the lease contract. “ We can’t change the circumstances, and more importantly we could not return the money as it would be too much of a precedent for transactions we encounter, “Hansen explained.” The Standard and Ethic Committee took it to the full board and they ruled against Commercial Money Center. CMC works on “D” deals, had deals, and often the paperwork and time involved is long, due primarily to the nature of the transactions. Leasing News has received many complaints, but everyone we investigated the circumstances did not result in a Bulletin Board complaint. CMC was able to justify all the actions. Leasing News also receives many complaints about companies keeping advance rentals, when leases do not fund. In many of the circumstances, there are commitment letters or other documents the lessee has signed that the money is “forfeited” if they change their mind or other circumstances arise. These then are viewed as private disputes and do not make the Bulletin Board. The action by NAELB was reviewed by their Standards and Ethics Committee, then sent to the full board of directors for a vote. ------------------------------------------------------------------------------------------------------------ Fed Economist Parry See Internet Long Time to Recover High Tech
Too Weak to Lead Recovery The U.S. economy will continue to contract for the rest of the year and the first quarter of next, but even when it rebounds the Bay Area is not likely to be its driving force, the president of the Federal Reserve Bank of San Francisco said yesterday. In a speech at the Fairmont Hotel kicking off a symposium by the University of California's Fisher Center for Real Estate and Urban Economics, Robert Parry said that the recent downturn has hit the Bay Area particularly hard, and that other regions and industries will likely have to be the leaders in turning the nation around. "I can't make a very strong argument that San Francisco or the Bay Area economy is going to lead the nation out" of the recession, Parry said, in response to an audience member's question. "We've got to see high tech have a significant turnaround." It's no secret the downturn has hammered San Francisco. Offices along Bryant Street and the South Park area, once bustling with idealistic young dot- com workers and companies swollen with capital investment, are boarded up and vacant now. For the first time in recent history, Parry said, commercial vacancy rates in San Francisco have drifted above those in Los Angeles -- 14.8 percent here in the third quarter, compared with 13.9 percent there. National growth began to slow during the second quarter of 2000, Parry said, just after the technology and Internet economies and valuations were reaching their zenith here. The technology boom brought about unprecedented business investment in technology infrastructure, and investors poured money into the sector. Now, the economy has contracted at an annualized rate of 0.4 percent during the third quarter, and unemployment jumped to a five-year high of 5.4 percent in October, with the largest single-month decline in jobs in 15 years. The Fed has cut rates 10 times since January, dropping the Fed funds rate to 2 percent from 6.5 percent at the beginning of the year. The contraction is likely to worsen during the fourth quarter, with further job losses and erosion of consumer confidence, and continue early next year, before possibly staging a rebound toward the end of the first half of 2002, Parry said. In part, this is driven by the events of Sept. 11 as much as the pullback in spending and investment. "The horrific events of Sept. 11, I believe, changed our world in myriad ways," he said. "In terms of the economy, these attacks clearly struck us when we were vulnerable, pushing us from slow growth to outright contraction." Still, Parry said, a number of uncommon events have prevented the downturn from being worse than it is. Chief among them was consumer spending, which grew a record 7.1 percent in October despite a range of negative indicators. This may have been driven in part by extremely low interest rates, which have led many homeowners to refinance and "monetize" their assets to buy more goods, Parry said. Tax rebates and falling energy prices may have also played a role. In the long term, prospects are good, he said. "Frankly, there's no way to know exactly when" the turnaround will come, he said. "But I do know this: The economy will recover. The fundamentals are strong." ____________________________________________________________________________ Support for Joe Woodley as New UAEL CEO I am in Disney World with my kids for a couple of days. Then going to Naples for Thanksgiving. I would like to comment on the selection of Joe Woodley to head up the UAEL. I support Chuck Brazier in this wholeheartedly. Joe Woodley is one of the finest people I have ever known in this business. I won't bore your readers with the details or embarrass Joe with them, but suffice it to say that Joe Woodley did something for me, 15 years ago, that pretty much determined the way I would conduct myself with respect to my business relationships. Joe is one of those people that you may meet, from time to time in your life, that provide you with an example that you want to emulate. Joe Woodley is one of those people, for me. There is no one that I respect more in this business. He is the perfect person to bridge the gap between the old and the new in our association. Under the tutelage of Joe and Bill Grohe, Joannie Dalton has the opportunity to develop into one of the finest association managers in the leasing industry. Joe Woodley is well thought of in all circles in this industry. He will be able to establish and maintain good relationships with the leadership of the other associations and I can think of no better advisor to the Executive Committee than Joe Woodley. Joe cares deeply about the UAEL and he demonstrates it by supporting the association in every way he can. I can't think of a better person to carry out the current agenda of the UAEL. Bob Rodi,
CLP ____ Congratulations to Joe W. Does this mean he gets more strokes? JW Jerry Withrow
( Didn’t understand the e-mail, so asked Jerry Withrow ) He always wants strokes on the golf course. I figure he will be so busy with UAEL that his game will suffer and he will end up wanting 'more strokes". Ask Joe he'll tell you what I mean. Jerry Withrow
Business Still Buying Office Supplies/Staples Profit Up FRAMINGHAM, Mass. (AP) Office supply chain Staples Inc. reported a 7.85 percent increase in profits in the third quarter, meeting Wall Street expectations despite fallout from the Sept. 11 terrorist attacks. Staples reported net income of $91.31 million, or 20 cents per share, compared with $84.66 million, or 18 cents per share, a year ago. Analysts surveyed by Thomson Financial/First Call anticipated earnings of 20 cents per share. Sales rose 1 percent to $2.83 billion, compared with 2.80 billion a year ago. The company said overall comparable sales for the quarter were down by two percentage points because of the events of Sept. 11. Staples said it plans to open fewer than 80 new stores after previously announcing it was cutting expansion from 110 stores to 100. ''We have planned conservatively for the year and expect to achieve earnings for the fourth quarter in the range of 25 cents to 27 cents per share,'' Staples Chairman and Chief Executive Officer Thomas Stemberg said in a statement. ''Looking ahead to next year, a strong management team, expense control initiatives and a renewed focus on improving returns all position Staples for solid earnings growth.'' Analysts estimate earnings of 25 cents per share in the fourth quarter for Staples. Sales for the Staples Delivery business, including Staples Direct, Staples Contract and Quill, combined with their e-business counterparts, were $778 million, a 9 percent increase over last year. Staples also reported that its contract business outperformed the industry during the quarter, acquiring more than 2,000 new accounts, adding to 3,500 accounts in the first half of the year. For the first three quarters, Staples earned $171.2 million compared with $171.4 million a year ago. Staples operates 1,300 stores and has 50,000 employees. U.S. Government Housing Report for October Housing activity for October fell 1.3% to 1.552 million (SAAR), continuing a modest slide that began prior to 9/11. Permits, an indicator of future activity, fell 3.6% to 1.47 million, SAAR, the lowest level since December 1997. Regional data was mixed with two regions up – NE up 5.3% and Midwest up 14.3%, while the West dropped 16.7% and the South was unchanged. Analysis and outlook: Housing continues to slow, but the pullback to date, including post 9/11 data, has been modest. Permit data is particularly weak as builders have been hesitant to start new projects in light of recent weakness in consumer confidence and rising unemployment rates. Yes, single family activity is slowing some, but the current SAAR rate of 1.242 million is still strong by historical standards. The economy is in a mild recession with 3rd Qtr. GDP contracting 0.4% with 4th Qtr. contraction expected to be somewhat worse, maybe –2%. The impact of 9/11 has been understandably strong and quick: the latest numbers showed consumer confidence dropping to 85% with unemployment jumping from 4.9% to 5.6%, so we would expect housing to reflect these changes, and it is. However, the housing sector remains remarkably resilient and I expect it to resume its upward trend next year. Here are some reasons why we should be upbeat on housing (excerpted from editorial by Dr. Irwin Kellner, CBS.MarketWatch.com, November 16). 1st, interest rates are about as good as it can get with the 30 year rate below 6.5% (and if you look hard enough, you can get one below 6%), and refinancing is putting lots of money into peoples pockets. 2nd, housing affordability is excellent as price appreciation in many key markets has been cut in half recently and NAR’s “housing affordability index” is currently at a near 30 year high. In fact, NAR tells us that the typical household now earns more than enough to qualify for a conventional loan covering 80% of a median priced single family home. 3rd, strong demographics, particularly immigration trends, are helping to keep housing afloat. Many people in the immigrant population are in the 25-34 age group, which happens to be the prime home buying age in this country. In fact, during the past 3-4 years, immigrants accounted for 25% of new housing demand. Housing is extremely important to the economy. In fact, when you add direct and indirect impacts such as furniture sales, refinancing impacts through housings’ “wealth effect”, etc., housing accounts for over 20% of our GDP in any given year. For three out of four homeowners in the U.S., their houses represent their most significant portion of their wealth according to a recent study by NAR (Nat’l Assoc. of Realtors). Forget the stock market, your investment in housing is the real driver in today’s economy. The study found that each dollar of housing wealth translates into 20 cents in attritional consumer spending and savings. You’ve heard the old adage – “as housing goes, so goes the country”. Well, that’s never been truer than today. Consumer investment in single family residential housing is expected to more than double from the current $11 trillion to as much as $ 25 trillion by the end of the decade according to Franklin Raines, chairman of Fannie Mae. NAHB’s latest outlook has housing bottoming in the 4th Qtr. 2001 at 1.44 million, SAAR, but then reversing course next year, starting the 1st Qtr. at 1.475 million and finishing at 1.66 million, SAAR in the 4th Quarter. ---------------------------------------------------------------------------------------- State by State Unemployment Rates by Associated Press The unemployment rates in the 50 states and the District of Columbia for September and October of 2001. State Sept.
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