|
| October 19, 2000 Unicapital
Employee E-Mail Unicapital Divisions will be spun off or sold, look for Trinity Capital in the near future to service more leasing companies, look for BSB to survive but perhaps under a different name, and look for changes. For younger leasing people, get some of the old Bob Dylan records, as "The Leasing Times Are a Changing" Sierra Capital Mirrors means you are getting reflections of what is not reality. Compassion for Employees I have been getting e-mail messages from Sierra Cities and Unicapital employees. I try to answer them truthfully. I am an employer. I just lost to 3Com our funding manager who had been with us for almost seven years. Could not match their salary and stock. We parted friends. She visits us. Many of our previous employees stay friends as I have trained many in the industry. So I am an employer, too. I hate to see them go, and I hate to go through interviewing, and so does the rest of the staff in a small office ( and perhaps the same experience at large companies ). Here is a sample of what Leasing News gets:
Greetings, Name Withheld For employers on line, and for other employees at Unicapital, I share my response with this individual: My father always told me the time to start looking for a new job was right after you started the present job. He said to always have your pulse to somewhere where you would be happier, making more money, or if something were to go wrong, you will have practiced your job interviewing skills, grown more confidence in interviewing, and not be adverse to presenting yourself or being rejected, because they are not rejecting you as a person but as an employee. I don't think it is an indicationn you are unhappy as the reason to look for a better position at any time in your career. It is up to your employer to keep you happy. Read Dr. Chope's book, "Dancing Naked," about looking for work and your attitude ( amazon has it ). Remember the old adage, the best time to ask for money is when you don't need it. The same applies with employment. The response: Dear
Kit--- ( I know that in the case of a bankrutpcy, back pay and other issues are a high priority on the credit list. Perhaps some of the attorneys, or other employers, in our readership will be able to answer the question ). editor Signatures Required on Application--even On Line I appreciated your October 18 posting of the inquiry from an anonymous funder on the need for getting signatures on consumer credit reports. As you know, I gave a "White Paper" on this subject at last month's UAEL Conference in Orlando. I'd be pleased to send a copy to anyone requesting same. I can be reached at: Fax:
Roger Marce, Esq. 602-944-4417 Bob Rodi on "Signatures On Line" I would like to respond to the anonymous request regarding the "opinion" last August. First of all I would like to direct your leasingnews readers to the following website: www.ftc.gpv/os/statutes/fcra. At this website they can read all of the pertinent opinions many of which relate to the subject. (at the end I will list the opinions I believe to be most applicable)At the crux of this matter is the simple change of wording in the FCRA of 1996. Namely the wording was changed in section 604(a)(3)(F)(i), from "a transaction involving the consumer" to "a transaction initiated by the consumer". Mr. Medine, in his opinion to Mr. Tatelbaum of the NACM, draws the conclusion that, because of this change in wording, a lender is in violation of the "permissible purpose" rule of the FCRA if a credi report is obtained on a business owner or guarantor without explicit permission. Mr. Medine states that this is even true in the case of a sole proprietorship. While I do not want to bore your readers with any more details(the opinions are plenty boring on their own) I would like to pose a few sensible questions as follows: 1.
If this is such a major issue then why, in nearly 5 years since it passed, hasn't
the FTC launched one enforcement action? I know they haven't because if they had
the NACM wouldn't be requesting an opinion about it. It's obvious that the NACM
was thinking about it and asked the question. If they hadn't asked I don't think
there would be a word said about it. 2. If the FTC did decides to strictly enforce this statute what would be the effect on virtually the entire commercial credit industry in the United States? It would set us back about 20 years, would it not? I don't think that's going to happen. 3. Is anybody worried about complaints from customers that get approved for credit? I don't think so. If there were going to be any complaints it would be from customers who are declined, who thought they should have received an approval. In that respect it could be used as a weapon by some unscrupulous business owner seeking credit, such as "What do you mean I'm declined? You didn't get my signature before you ran my credit report so if you don't approve me I'll sue". I can just see thousands of bad deals getting done because credit grantors are living in fear of a lawsuit. 4. If this law is to be enforced and I was one of the internet based deal matching/auction sites I would really be worried about my investment right about now, wouldn't you? The writer in the anonymous inquiry asked if the current "panic" is an overreaction. I believe unequivocally that it is. While I don't presume to second guess the US Congress, I find it hard to believe that the simple language change referred to above was a deliberate legislative initiative by members of Congress who felt that American business owners needed to be protected from those of us in the credit industry, becuase we would use a credit report to take advantage of a business owner. Please
visit the website above and read the following opinions and draw your own conclusions:
If one goes to the URL above and simply adds "/name.htm" they will be taken directly to the opinion. (i.e. www.ftc.gov/os/statutes/fcra/tatelbaum.htm) The second name in the opinions listed above is the name to use for navigation. I believe that the real scare here is that there will be a class action lawsuit by some opportunistic attorney who will seek to help all of those unfortunate entrepreneurs who have been severly injured because some unscupulous credit grantor pulled their unauthorized credit report. I would normally worry a lot more about this but I am certain that this will blow over by the time that segment of the legal community gets through with Ford and Firestone/Bridgestone. Bob Rodi drlease@leasenow.com GoPublicNow.com announced that it has another addition to its client base, TotalFunding.com. This
marks the third client in recent months to have signed on for GPN services, in
which GPN has received an equity position between 200,000 and 500,000 shares in
those client companies. Bruce Berman, CEO of GoPublicNow.com commented, "Once again we are pleased to have placed another new client into to our expanding network of emerging companies as well as continuing with our business model of acquiring equity positions in a number of companies. TotalFunding.com is an emerging com pany but has some unique characteristics that made it a very attractive company to us. First, they have the key component of taking traditional brick and mortar business of equipment leasing and financing, but use an Internet platform from which to springboard their business. In addition, their si te is already online and they are producing revenues as well as having several key agreements in place." GoPublicNow.com will be providing business advisory services, organizing road show presentations to investment banking firms as well as other corporate development services to TotalFunding.com in exchange for approximately 276,000 shares in TotalFunding.com. "We believe that GoPublicNow.com will further our exposure within the financial and investor communities to communicate our corporate story and aid us in our expansion" stated Alan Collier, president and CEO of TotalFunding.com. ELEASE TO PROVIDE COMPLETE LEASE PROCESS AUTOMATION SYSTEM TO CAPITALWERKS Irvine, CA - CapitalWerks, LLC has chosen eLease* to provide an automated lease processing system. The system will allow CapitalWerks to connect customers, partners, and remote sales representatives over the Internet. The system can provide pricing on-line, process applications, generate credit decisions, produce lease documents, support accounting and billing, and offer real-time updates and reports. CapitalWerks chose eLease due its comprehensive features, scalable solution, and ASP platform. eLease anticipates the full platform to be functional for a November 1, 2000 launch date. eLease will be providing all components of the eLease Platform* that manages sales, application, underwriting, documentation, billing and accounting. The Platform is delivered as an ASP so that all hardware, software, data management, and network support and administration are included in the solution. Through process automation and ASP platform, eLease believes it can save CapitalWerks over $ 500,000 in the first year. "Of all the providers we considered, eLease offered the most complete end-to-end solution. Their ASP architecture allows us to outsource the IT burden," said Mark McQuitty, CEO of CapitalWerks. CapitalWerks is a commercial finance company engaged in the origination, sale, and servicing of non-cancelable equipment leases to small and mid-sized businesses and the sales of related services. CapitalWerks originates leases through direct relationships with selected leading equipment manufactures, distributors and industry cooperatives that generally offer CapitalWerk's leasing services as a preferred method of financing equipment sales. These relationships are secured through the efforts of highly experienced leasing sales professionals. eLease provides an end-to-end lease processing system for leasing companies, banks, and equipment manufacturers and dealers that offer leasing to their customers. The eLease Platform(tm) consists of 1) AccessPoint(tm), which enables lease functionality on any Web site, 2) SalesPoint(tm), which provides lease sales force automation solutions, and 3) InOffice(tm), which facilitates configurable workflow solutions for back office lease processing. The Sunnyvale, CA company is backed by idealab!. About eLease, Inc. eLease has leveraged extensive technical knowledge and leasing industry expertise to create the leasing industry's first standardized application for delivering automated workflow and Web-enabled leasing solutions. The company utilizes the platform to provide solutions for each constituent in the capital equipment leasing process, including financial service institutions, capital equipment vendors, and businesses that wish to acquire a lease. eLease was founded by a team of seasoned executives with experience in both the leasing and technology sectors. Additional information about eLease can be found at the company's web site at www.elease.com http://www.elease.com>. About CapitalWerks, LLC CapitalWerks is a national provider of small-ticket leases with original equipment acquisition costs typically ranging from $5,000 to $250,000. However, CapitalWerks also originates leases with original equipment acquisitions that exceed $250,000. CapitalWerks' primary equipment emphasis is in the following traditional industry sectors: computer; office; general healthcare and diagnostic; telecom; broadcast video; printing; imaging and graphic arts; manufacturing; packaging and specialty vehicles. For more information, please call 949-260-1090. I just joined your site at the recommendation of several colleagues and noticed that your "50 list" lists Transamerica as being sold. The real story is that Transamerica Corporation was in fact sold in July of 1999 to Aegon Corporation, N.V. and Transamerica Commercial Finance Corporation (TCFC) was subsequently put up for sale by AEG in the beginning of 2000. (this is the parent company of the leasing operation) However, TCFC was taken off of the market and rolled under our parent company Aegon (NYSE: AEG) approximately 45 days ago. It is business as usual and we continue to acheive better than expected results. It is true that Transamerica Corporation was sold to Aegon, however the equipment leasing business is still steaming ahead full force. By listing the company only as "sold" does not tell the whole story. I hope this information is useful, please keep up the good work on your site. Very Truly Yours, Jason
A. Gendron 51 Leasing Companies Major Changes American
Business Leasing ( gone ) any corrections, additions, comments will be appreciated. We are presently working on dividing the list into last twelve months and prior. To clear up any misunderstand, we have quoted Bruce Kropschot in the past about the purpose of the list, but it appears some readers thought it was his list. It is not. It was started by Sierra Cities in an internal memo to salesmen to go after the vendors and accounts of companies no longer around. It has been up-dated by your editor and readers over the last six months --editor Charter One Financial, Inc. CLEVELAND, Oct. 19 /PRNewswire/ -- Charter One Financial, Inc. (NYSE: CF), the holding company of Charter One Bank, F.S.B., today reported net operating earnings of $110.9 million for the three months ended September 30, 2000, up from $105.8 million for the third quarter of 1999. This was equivalent to a 13.0% increase in operating earnings per diluted share, to $.52 in the 2000 quarter, up from $.46 in the year ago quarter. All prior period data have been restated for the merger with St. Paul Bancorp, Inc. in October 1999, which was accounted for as a pooling of interests, and all per share data have been restated for the 5% stock dividend paid on September 30, 2000. Net operating earnings exclude the after-tax impact of merger expenses, which were $1.3 million in both the third quarter of 2000 and the third quarter of 1999. Including merger expenses, net income for the three months ended September 30 was $109.6 million, or $.51 per diluted share, in 2000, and $104.5 million, or $.46 per diluted share, in 1999. Net operating earnings for the quarter generated annualized returns of 1.37% on average assets and 18.96% on average equity. These compared with operating returns for the third quarter of 1999 of 1.34% on average assets and 17.03% on average equity. "The quarter came in very well," commented Charles John Koch, Charter One's Chairman and Chief Executive Officer. "Loan production was terrific and translated into healthy growth in our energized asset portfolio. We are very impressed with the progress we've made in shifting the balance sheet this year. For the first time, over half of our loan portfolio is in energized asset products. Although we continued to see pressure on net interest margin, we have built the basis for working through the margin pressure by accelerating the shift in assets and posting impressive gains in core deposits. One of the keys to our ability to ride through this period is the tremendous momentum coming out of retail banking, which posted a 31% year- over-year revenue gain." Top line revenue -- Top line revenue, which includes net interest income and recurring other income (excluding net securities gains/losses), totaled $317.4 million in the third quarter of 2000, compared to $327.9 million in the second quarter of 2000 and $307.1 million in the year ago quarter. Over the past 12 months, the Company has been aggressive in repurchasing its stock, repurchasing 16 million shares in the period. Because repurchases reduce revenue, thereby distorting comparative trends, it is helpful to look at top line revenue on a per share basis; equivalent per share amounts were $1.48 for both the third and second quarters of 2000, up 9.6% from $1.35 in the third quarter of 1999. Net interest income -- Net interest income was $223.2 million for the three months ended September 30, 2000 compared to $232.0 million in the second quarter of 2000 and $233.1 million in the third quarter of 1999. The net yield during the third quarter declined to 2.93% from 3.18% in the second quarter and 3.14% in the year ago quarter. As expected, net interest income was down due to the decline in net yield along with the Company's decision to limit balance sheet growth in light of the interest rate increases since the beginning of the year. Noninterest income -- Recurring noninterest income for the third quarter of 2000 totaled $94.3 million, up 27% from the year ago quarter. This line represented 30% of top line revenue in the current quarter, up from 24% in last year's third quarter. The largest component of recurring noninterest income was derived from retail banking activities, which accounted for $64.4 million of the total in the three months ended September 30, 2000. Growth in retail banking revenue continues to be driven by recent mergers, account acquisition in mature markets and continual product development. Retail banking revenue was up 4% from the second quarter of 2000, and up an impressive 31% from the year ago quarter.
Lending production -- Loan and lease originations for the third quarter of 2000
totaled $3.4 billion, up from $3.3 billion in the second quarter of 2000 and $2.9
billion in the year ago quarter. Originations of energized assets totaled $1.9
billion, or 56% of the total, up 11% from the second quarter of 2000 and up 30%
from the year ago quarter. The Company uses the term energized assets to include
all lending products other than traditional single-family loans. Loan production in Chicago continued to demonstrate the strong potential of the market acquired through Charter One's October 1999 merger with St. Paul Bancorp. In the three months ended September 30, 2000, the Chicago division closed $253 million in residential loans and $88 million in consumer loans. These results bring year-to-date totals to $617 million in residential loans and $228 million in consumer loans, compared with originations for all of 1999 of $345 million in residential and $73 million in consumer lending. Residential lending cross sales -- The Company's success at using its residential lending channel to cross sell profitable products continued through the third quarter of 2000. In the year to date, 69% of eligible mortgages were closed with a home equity line of credit, and the ratio increased to 79% for the month of September. The results were consistent throughout the franchise, with Charter One Mortgage Corp. (the mortgage banking subsidiary) posting 70% in September and Chicago, the newest piece of the franchise, jumping to 74%. Under a new program, the residential loan is also used to acquire core deposits. In the first quarter, Charter One introduced an initiative to attach a high-balance core deposit account to new mortgages; during the month of September, 33% of new mortgages brought in a new core account. Lending portfolio -- The lending portfolio totaled $23.9 billion at September 30, 2000, up 7.3% from the end of 1999. The one-to-four family portion of the lending portfolio totaled $11.4 billion at September 30, 2000, down $369 million from the end of 1999 and $546 million from June 30, 2000. Consistent with the Company's previously stated plan to limit balance sheet growth and accelerate the shift away from single-family exposure, the Company sold $1.2 billion in loans and securities during the quarter. The energized asset portion of the portfolio totaled $12.8 billion at September 30, 2000, or 53% of the total lending portfolio, compared with 48% at December 31, 1999. The energized asset portfolio has increased by 19% since the end of the year, on pace to exceed the Company's goal of 20% growth for 2000. Growth rates for individual components of energized assets reflected the emphasis on originations. Retail consumer loans are up 20% in the year-to-date to $5.4 billion, which includes $1.4 billion of home-equity lines of credit (up 40% from the end of 1999). Other notable nine-month growth rates include a 39% jump in the leasing portfolio and 20% in indirect auto. Credit quality -- Credit quality remained strong during the quarter as characterized by nonperforming asset and net charge-off levels. Nonperforming assets (including troubled debt restructurings and loans delinquent 90 days still accruing) totaled $176.1 million at September 30, 2000, resulting in a ratio of nonperforming assets to total assets of .54% at the end of the quarter. In addition, the ratio of net charge-offs to average loans remained stable during the period at .16% in the third quarter of 2000. "We continue to be pleased with the low level of net charge-offs coming out of our loan portfolio, which remain substantially below the industry average," Koch observed. "It is also timely to point out that Charter One is primarily a secured lender in all of its product sets. Additionally, our portfolio has only negligible amounts of shared national credits and indirect auto leases." Core deposits and cross sales -- Core deposits, which include checking, savings and money market accounts, totaled $9.2 billion at September 30, 2000, up 7.6% from December 31, 1999. The highlight of deposit activity was a 14.3% increase in checking account balances during the nine-month period. At the end of the third quarter of 2000, core deposits represented 49% of total deposits (up from 45% at the end of 1999) and checking account balances were 20% of the total (up from 17%). Cross-sell efforts have yielded impressive results, with $229 million in core deposits added since the end of 1999 through an initiative spearheaded by retail securities representatives combined with the residential mortgage program discussed above. Operating expenses -- Administrative expenses, excluding merger costs, totaled $146.7 million in the three months ended September 30, 2000, unchanged from the second quarter of 2000 and up from $142.0 million in the year ago quarter. The stable current quarter level includes the benefit of cost saves coming from the 1999 merger with St. Paul Bancorp, which offset the increased costs associated with volume-driven expenses resulting from the increase in loan production and new marketing programs. Operating expenses translated into an efficiency ratio of 44.93% for the third quarter of 2000, compared to 45.18% for the third quarter of 1999. Stock repurchase update -- On July 18, 2000, the Company authorized the repurchase of 10% of its outstanding shares, or approximately 20 million shares. During the three months ended September 30, 2000, Charter One repurchased 5.1 million shares (not adjusted for the 5% stock dividend) at an aver age price of $22.51, or $115.2 million. Business plan and operating environment -- Mr. Koch reiterated the guidance provided at the end of the second quarter on the current operating environment and the effect on Charter One's business plan and earnings prospects. He reinforced the Company's decision to limit balance sheet growth in the current interest rate environment. He also noted that based on current repricing trends, management anticipates the net interest margin will stabilize by the end of the fourth quarter. "Our business plan is intact and we are making significant progress in shifting the balance sheet away from its dependence on single-family lending. As demonstrated this quarter, the energized asset production has reached the level where it can provide the major portion of future balance sheet growth. Over time, the increase in energized assets should result in dramatic improvement in net interest income. Further, the strength of retail banking revenue, including impetus from our new Chicago market, shows every sign of continuing to fuel top line revenue growth for some time to come." Charter One has approximately $33 billion in total assets, making it one of the 30 largest bank holding companies in the country. The Bank has more than 420 branch locations in Ohio, Michigan, New York, Illinois, Massachusetts, and Vermont. 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 . Press releases are also available by telefax at no charge by calling PR Newswire Fax On Demand. To retrieve a specific press release, call: 800-758-5804 and reference account 313075. Forward-Looking Information This release contains certain estimates of future operating trends for Charter One Financial, Inc., as well as estimates of financial condition and earnings, operating efficiencies, revenue creation, lending origination, loan sale volumes, charge-offs and loan loss provisions. These estimates constitute forward-looking statements (within the meaning of the Private Securities Litigation Reform Act of 1995), which involve significant risks and uncertainties. Actual results may differ materially from the results discussed in these forward-looking statements. Factors that might cause such a difference include, but are not limited to: (1) revenue growth is lower than expected; (2) competitive pressures among depository institutions increase significantly; (3) changes in the interest rate environment reduce interest margins; (4) general economic conditions, either nationally or in the states in which the Company does business, are less favorable than expected; and (5) legislation or regulatory changes adversely affect the businesses in which the Company is engaged. Irwin Financial Corporation Announces Third Quarter Earnings COLUMBUS, Ind., Oct. 19 /PRNewswire/ -- Irwin Financial Corporation (Nasdaq: IRWN) today announced net income for the third quarter of 2000 of $9.1 million or $0.43 per share compared with $8.7 million or $0.40 per share a year earlier, an increase in earnings per share of 7.5%. Year-to-date, net income has totaled $26.1 million or $1.23 per share, an increase of 7.0%. Total net revenues in the quarter were $79.2 million, compared with $65.1 million in the third quarter of 1999, an increase of 21.6%. Return on average equity in the third quarter was 21.0% and the return on average assets was 1.67%. The quarter was marked by continued strong performance at the Corporation's home equity line of business. Lines of Business The Corporation's home equity lending business (www.ihe.com) earned $4.0 million, ($6.7 million pre-tax), in the third quarter, compared with $2.6 million pre-tax a year earlier, a 162.6% pre-tax improvement. Home equity loan and line of credit originations totaled $193.0 million in the quarter, an increase of $95.4 million or 97.8% compared with a year earlier. The owned portfolio of home equity loans and lines of credit totaled $1.1 billion at quarter-end, compared with $0.7 billion a year earlier, an increase of 42.7%. The improvement in net income was primarily the result of a $7.6 million or 187.1% increase in gain on sale revenues, reflecting a 179.1% increase in the principal balance of loans delivered to the secondary market. Origination fees and points increased to $4.7 million, a $3.1 million or 203.1% year-over-year increase. In addition, the home equity business completed three separate transactions significant to continued development of its growth strategy. * The company successfully completed its 11th asset-backed transaction with the sale of approximately $350 million of asset-backed AAA-rated bonds and a AAA-rated interest-only strip. The securities are to be collateralized by a pool of home equity loans and lines of credit that include loans with 100% and 125% combined loan-to-value ratios. * Separately, the company sold 38% of the residual interest in home equity loans (representing approximately $125 million of unpaid principal balance) previously securitized in December 1999. Consistent with two previous residual sales, the company sold the residual interest for a price equal to its current carrying value, establishing a market value for this residual consistent with the company's valuation assumptions. * Finally, early in the fourth quarter, the company acquired the residual interest, servicing rights and related whole loans of an approximately 400 million pool of previously securitized home equity lines of credit. The collateral supporting the pool is seasoned lines of credit predominantly up to 100% combined loan-to-value and similar in credit quality and yield to lines of credit originated by the company. Based on its interpretation of recently proposed federal banking regulations, the company believes the acquisition of the interest-only strip would qualify as a purchased residual interest for purposes of capital treatment. Net income at the Corporation's mortgage banking subsidiary (www.irwinmortgage.com) totaled $3.7 million, a decrease of $2.8 million or 42.9% compared with third quarter 1999 earnings of $6.5 million. The decline principally reflected decreased loan origination fees, lower interest income due to reduced volume resulting from higher interest rates, and lower absorption of fixed costs. Mortgage loan originations totaled $1.0 billion, down $0.3 billion or 24.5% from a year earlier. Refinanced loans accounted for 13.2% of originations in the third quarter, compared with 15.9% a year earlier. The company's owned mortgage servicing portfolio totaled $10.0 billion as of September 30, 2000, a year-over-year decrease of 4.8%, reflecting the company's decision to sell selected portions of the portfolio to take advantage of increasing values as interest rates have risen. The capitalized value of the company's servicing portfolio increased to $133.3 million as of September 30, 2000, compared with $127.9 million a year earlier, a 4.2% increase, primarily reflecting positive valuation adjustments resulting from slower prepayment speeds. The total economic value of the servicing portfolio at quarter end was $203.0 million, which was $69.7 million greater than the capitalized value. Net income for the commercial banking line of business (www.irwinunion.com) totaled $1.8 million in the third quarter, a decrease of $0.1 million or 4.3% from a year earlier, principally reflecting expenses related to the company's expansion activities. During the third quarter, the Bank successfully opened new markets in Louisville and Salt Lake City and hired personnel to start up markets in Las Vegas and Phoenix, continuing the progress of its strategy of identifying metropolitan markets which have undergone disruptive commercial bank merger and acquisition activity, while staffing the markets with experienced, senior lending officers. The amount of the increases in compensation, office support, and related capital expense charges were in line with management's expectations. The bank's loan portfolio of $974.5 million increased $324.2 million, or 49.8% year-over-year. The net interest margin for the Bank was 4.40%, compared with 4.89% a year earlier reflecting higher cost sources of funds. The Bank's net charge-offs totaled $103 thousand during the third quarter, compared with $121 thousand a year earlier. The Bank's 30-day and greater commercial loan delinquency was 0.29% as of September 30, 2000, compared with 1.03% a year earlier. The Corporation's leasing line of business, Irwin Business Finance (www.irwinBF.com), incurred a pre-tax loss of $0.6 million during the third quarter. This loss was in line with management's expectations reflecting the start-up phase of the company's development. As previously reported, the company completed its acquisition of a 78% ownership position in Onset Capital Corporation, a Canadian small-ticket equipment leasing company. The leasing line of business originated $27.8 million in leases in the quarter and had a portfolio at quarter-end of $128.2 million, including $60.8 million acquired as part of the Onset acquisition. Irwin Ventures (www.irwinventures.com), the Corporation's venture capital subsidiary, lost $0.2 million in the second quarter, reflecting operating expenses. There were no valuation adjustments in the company's investment portfolio during the quarter. The company's investment portfolio has a $12.9 million carrying value and a $4.1 million cost basis. Balance Sheet The Corporation's assets totaled $2.2 billion as of September 30, 2000, a $0.5 billion increase from a year earlier, principally reflecting a 67.0% increase in portfolio commercial loans and leases. Nonperforming assets (including other real estate owned of $3.0 million) were $7.9 million or 0.37% of total assets as of September 30, 2000, down from $8.9 million or 0.53% of total assets a year earlier. The Corporation's allowance for loan losses totaled $12.6 million as of September 30, 2000, compared with $8.8 million a year earlier. The ratio of allowance for loan losses to total loans was 1.13%, compared with 1.32% a year earlier reflective of the growth of the Corporation's loan and lease portfolio. The ratio of allowance for loan losses to nonperforming loans totaled 257% at quarter-end. The Corporation had $181.1 million in shareholders' equity as of September 30, 2000, an increase of 14.1%. Shareholders' equity as of September 30, 2000, was $8.55 per common share, a year-over-year increase of 15.2%. The Corporation's Tier 1 Leverage Ratio and Total Risk-based Capital Ratio were 12.0% and 11.1%, respectively, compared with 12.6% and 14.3% a year earlier. Irwin Financial Corporation (www.irwinfinancial.com) is an interrelated group of specialized financial services companies. The Corporation, through its five major subsidiaries -- Irwin Mortgage Corporation, Irwin Home Equity Corporation, Irwin Union Bank and Trust Company, Irwin Business Finance, and Irwin Ventures Inc. -- provides a broad range of consumer and commercial financial services in selected markets in North America. This press release contains forward-looking statements that are based on management's expectations, estimates, projections and assumptions. These statements and estimates include but are not limited to projections of business strategies and future activities, but are not guarantees of future performance and involve uncertainties that are difficult to predict. Words such as "believes" and similar expressions are intended to identify forward-looking statements, which include but are not limited to projections of business strategies and future activities. Actual future results may differ materially from what is projected due to a variety of factors including potential changes in interest rates, which may affect consumer demand for loans and lines of credit; refinancing opportunities, which may affect the prepayment assumptions used in the Corporation's valuation estimates; competition from other financial service providers for experienced managers as well as for customers; changes in the proposed regulatory treatment of purchased residual interests, unanticipated difficulties in expanding the Corporation's businesses, availability of appropriate investment opportunities, legislative or regulatory changes, or governmental changes in monetary or fiscal policies. For additional explanation of various factors that may affect our future results, refer to the Management Discussion and Analysis in the Corporation's 10-K which is on file with the SEC.
MINNEAPOLIS, Oct. 19 /PRNewswire/ -- U.S. Bancorp (NYSE: USB) today reported operating earnings of $410.9 million for the third quarter of 2000, compared with $409.0 million for the third quarter of 1999. Operating earnings of $.55 per diluted share in the third quarter of 2000 were $.01 lower than the same period of 1999. Operating earnings on a cash basis increased to $.63 per diluted share in the third quarter of 2000 from $.62 in the third quarter of 1999. Return on average common equity and return on average assets, excluding merger-related charges and available-for-sale securities transactions, were 20.4 percent and 1.92 percent, respectively, in the third quarter of 2000, compared with returns of 24.6 percent and 2.09 percent in the third quarter of 1999. The reduction in the Company's return on average common equity reflects the impact of recent acquisitions, which were accounted for using purchase accounting. Including after-tax merger-related charges and available-for-sale securities transactions of $9.6 million in the third quarter of 2000 and $12.6 million in the third quarter of 1999, the Company recorded net income for the third quarter of 2000 of $401.3 million, or $.54 per diluted share, compared with $396.4 million, or $.54 per diluted share, for the same period of 1999. U.S. Bancorp Chairman, President and Chief Executive Officer John F. Grundhofer said, "Our third quarter results reflect our continuing efforts to become a customer-centered company that builds shareholder value through profitable revenue growth. In late 1999, we announced our intention to increase investments in service quality, technology and office expansion, in addition to making selective acquisitions that enhanced our market presence or product capabilities. These investments and acquisitions have contributed to our year-over-year expense growth. The payoff has been favorable revenue growth trends, particularly in fee income, and moderate expense growth on a sequential quarter basis. We are seeing progress on many other measures as well, including customer satisfaction, branch transaction accuracy and consumer account growth. We are confident that we are on the right course to accelerate revenue growth and are on track to meet our previously stated earnings expectations for 2000." Total revenue on a taxable-equivalent basis, before available-for-sale securities transactions, grew by $148.0 million, or 9.5 percent, over the third quarter of 1999. The increase in total revenue was driven by core loan growth, credit card fee revenue, investment banking and brokerage activity and acquisitions. Excluding the impact of acquisitions and divestitures, total revenue on a taxable-equivalent basis, before available-for-sale securities transactions, in the third quarter of 2000 would have been approximately 7 percent higher than the third quarter of 1999. Offsetting the growth in total revenue were increases in noninterest expense, before merger-related charges, of $117.0 million and provision for credit losses of $31.0 million over the third quarter of 1999. The growth in noninterest expense was primarily due to acquisitions, investment banking and brokerage activity and additional investments in sales, service quality and technology. In addition to an increase in the Company's on-going technology investment in Internet-related products and services, the third quarter of 2000 included approximately $10.8 million of Internet infrastructure-related expense. Relative to the second quarter of 2000, total revenue growth was 1.7 percent (approximately 6.8 percent on an annualized basis), while noninterest expense increased 0.9 percent (approximately 3.6 percent annualized).
Net charge-offs in the third quarter of 2000 were $172.9 million, compared with
second quarter of 2000 net charge-offs of $163.2 million and third quarter of
1999 net charge-offs of $141.8 million. A portion of the increase in net charge-offs
over the third quarter of 1999 was due to an expected increase in losses on the
growing credit-scored small business lending portfolio. On September 28, 2000, the Company acquired Lyon Financial Services, Inc., a wholly-owned subsidiary of the privately-held Schwan's Sales Enterprises Inc. in Marshall, Minn. Lyon Financial specializes in small-ticket lease transactions and has $1.1 billion in assets. On October 4, 2000, the Company announced that it had signed a definitive agreement to be acquired by Firstar Corporation (NYSE: FSR) of Milwaukee, Wis. in a tax-free exchange of shares. U.S. Bancorp shareholders will receive 1.265 shares of Firstar Corporation stock for every share of U.S. Bancorp stock. Pending all regulatory and shareholder approvals, the deal is expected to close in the first quarter of 2001. On October 13, 2000, the Company acquired Scripps Financial Corporation of San Diego, which has ten branches in San Diego county and total assets of $650 million. Line of Business Within the Company, financial performance is measured by major lines of business which include: Wholesale Banking, Consumer Banking, Payment Systems, Wealth Management & Capital Markets, and Corporate Support. These segments are determined based on the products and services provided to respond effectively to the needs of a diverse customer base. Business line results are derived from the Company's business unit profitability reporting system. Designations, assignments and allocations may change from time to time as management accounting systems are enhanced or product lines change. During 2000 certain organization and methodology changes were made and 1999 results are presented on a consistent basis. Wholesale Banking contributed $161.7 million of the Company's operating earnings in the third quarter of 2000, a 9.3 percent increase over the third quarter of 1999. Strong revenue growth, primarily due to core loan growth and bank acquisitions, was partially offset by an increase in provision for credit losses and higher noninterest expense. Wholesale Banking contributed $492.6 million of the Company's operating earnings in the first nine months of 2000, a 12.7 percent increase over the same period of 1999. Consumer Banking contributed $114.5 million of the Company's operating earnings in the third quarter of 2000, a 6.8 percent decrease from the third quarter of 1999. Total revenue in the third quarter of 2000 was essentially equal to total revenue in the third quarter of 1999, primarily due to the reduction in the indirect automobile portfolio, a third quarter of 1999 gain from the sale of student loans and a third quarter of 2000 loss on the Company's investment in New Century accounted for under the equity method based on New Century's reported earnings. A reduction in the business line's provision for credit losses, primarily due to improved deposit fraud management and the divestiture of the indirect automobile portfolio, was more than offset by an increase in noninterest expense. The Company is currently investing in a number of customer service quality initiatives and enhanced technology designed to improve the earnings growth of the Consumer Banking business line. Consumer Banking contributed $335.2 million of the Company's operating earnings in the first nine months of 2000, a 0.5 percent increase over the same period of 1999. On a normalized basis, considering the impact of the timing of revenue derived from student loan sales and the loss associated with New Century, the growth in Consumer Banking's operating earnings would have approximated prior quarters' results. Payment Systems contributed $57.3 million of the Company's operating earnings in the third quarter of 2000, a 4.0 percent increase over the third quarter of 1999. Total revenue grew 14.1 percent over the third quarter of 1999. Strong growth in corporate and retail card product fees and ATM processing-related revenue was partially offset by a slight reduction in net interest income, reflecting the growth in the business line's noninterest-bearing corporate card loans. Payment Systems' revenue growth was partially offset by increases in provision for credit losses and noninterest expense over the third quarter of 1999, reflecting continued growth in investments in key strategic co-brand partnerships, new products and technology, as well as transaction volume. Payment Systems contributed $161.7 million of the Company's operating earnings in the first nine months of 2000, a 22.0 percent increase over the same period of 1999. Wealth Management & Capital Markets contributed $47.2 million of the Company's operating earnings in the third quarter of 2000, a 4.4 percent increase from the third quarter of 1999. Total revenue grew by 19.7 percent over the third quarter of 1999, due to increases in investment banking, trading account profits and commissions, trust fees and growth in loans and deposits in Private Financial Services. Offsetting the positive impact of revenue growth was a 24.1 percent increase in expense, primarily due to the increase in investment banking and brokerage activity, office expansion and other growth initiatives. Wealth Management & Capital Markets contributed $165.0 million of the Company's operating income for the first nine months of 2000, a 14.6 percent increase over the same period of 1999. Corporate Support includes the net effect of support units after internal revenue and expense allocations, treasury and other corporate activities. Operating earnings for Corporate Support in the third quarter of 2000 were approximately $7.7 million less than in the third quarter of 1999. The variances in operating earnings for the quarter and first nine months of 2000 from the same periods of 1999 primarily reflect the change in residual allocations associated with the provision for credit losses. Net Interest Income Third quarter net interest income on a taxable-equivalent basis was $883.0 million, compared with $845.0 million recorded in the third quarter of 1999. Average earning assets for the period increased over the third quarter of 1999 by $6.4 billion, or 9.3 percent, primarily driven by core commercial and home equity and second mortgage loan growth and bank acquisitions, partially offset by reductions in securities, indirect automobile loans and residential mortgage loans. The net interest margin decreased in the third quarter of 2000 to 4.64 percent, compared with 4.84 percent in the third quarter of 1999, as lagging deposit growth relative to the growth in total earning assets has increased the Company's incremental cost of funding. Excluding indirect automobile and residential mortgage loans, average loans for the third quarter were higher by $8.1 billion, or 14.3 percent, than the third quarter of 1999. The decline in indirect automobile loans reflects a $1.8 billion loan sale completed in the third quarter of 1999. Without acquisitions, average loans, excluding indirect automobile and residential mortgage loans, were approximately 10 percent higher than the third quarter of 1999. Average available-for-sale securities for the third quarter of 2000 were lower than the third quarter of 1999 by $659 million, or 12.6 percent, reflecting both maturities and sales of securities. Noninterest Income Third quarter noninterest income, before available-for-sale securities transactions, was $826.0 million, an increase of $110.0 million, or 15.4 percent, from the same quarter of 1999. Excluding the impact of acquisitions and divestitures, noninterest income, before available-for-sale transactions, in the third quarter of 2000 would have been approximately 14 percent higher than the third quarter of 1999. Credit card fee revenue was higher quarter over quarter by $31.5 million, or 19.5 percent, reflecting continued growth in corporate and retail card product fees and ATM processing-related revenue. Investment banking revenue in the third quarter of 2000 was $37.2 million, or 61.9 percent, higher than the third quarter of 1999 due to strong equity capital markets activity at U.S. Bancorp Piper Jaffray. Other income increased by $23.2 million, or 16.5 percent, over the third quarter of 1999 primarily reflecting the impact of acquisitions, U.S. Bancorp Piper Jaffray managed account fees, revenues associated with equity investments, the timing of sales of SBA loans, and leasing residual income, partially offset by the third quarter of 1999 gain-on-sale of branches in Kansas and Iowa. Noninterest Expense Third quarter noninterest expense, before merger-related charges, totaled $884.4 million, an increase of $117.0 million, or 15.2 percent, from the third quarter of 1999. The increase in expense over the third quarter of 1999 was primarily the result of acquisitions, the increase in investment banking and brokerage activity and the Company's continuing investment in sales, service quality and technology. In addition to on-going investments in Internet-related products and services, the third quarter of 2000 included approximately $10.8 million of incremental spending on Internet infrastructure-related initiatives. Third quarter noninterest expense, before merger-related charges, was higher than the second quarter of 2000 by $7.8 million, or 0.9 percent (approximately 3.6 percent on an annualized basis). The sequential quarter increase in expense was primarily due to growth in investment banking and brokerage activity, as the Company's planned spending on service quality, technology and expansion initiatives, which negatively affected year-over-year comparisons, are now fully incorporated in the on-going expense base. The $15.7 million of merger-related charges incurred in the third quarter of 2000 were related to the integration of the Company's various acquisitions, including Mellon Network Services, Western Bancorp and Peninsula Bank of San Diego.
SOURCE U.S. Bancorp http://www.prnewswire.com AmSouth Announces Creation of e-Commerce Group BIRMINGHAM, Ala., Oct. 19 /PRNewswire/ -- AmSouth Bank announced today that it is expanding its commitment to Internet banking by appointing an e-Commerce Director and creating an advisory group of senior executives to oversee the bank's e-Commerce strategy. "AmSouth's focus in creating an e-Commerce department is to expand the choices our customers have and ensure that their needs are met in the way they decide is most effective," said Grayson Hall, executive vice president of the operations and technology division and a member of the bank's newly created e-Commerce Council.
AmSouth's emphasis on e-Commerce will span all lines of business and increase
the bank's capabilities and customers' choices, Hall said. To lead the e-Commerce
department, AmSouth has tapped Rod Woodford, a senior vice president who most
recently was responsible for directing all conversion training related to AmSouth's
merger with First American Corp. "The creation of this new group will allow us
to be more nimble in providing our customers with what they want and need in the
Internet space. Our emphasis will be on adding and refining our online offerings
quickly and frequently across all of our lines of business," Woodford said. * A complete suite of Internet banking services for checking and savings accounts; * A branch and ATM locator -- that will provide a map and directions if necessary; * Access to retirement plans managed by AmSouth; * Online stock trading and research through AmSouth Investment Services; Business Express, which gives small- to mid-sized businesses flexible access to all of their accounts; * TMS Web, AmSouth's Internet-based information reporting and transaction origination product targeted at corporate customers; and, * Online applications for check cards, credit cards, checking and savings accounts, mortgages, home equity lines of credit and Internet banking. Through AmSouth.com and the e-Commerce department, AmSouth plans to significantly expand the banking capabilities available to its 2.2 million households. The e-Commerce department is guided by the e-Commerce Council, an advisory group composed of Woodford, Hall and three other members of AmSouth's management committee: Michael Baker, senior executive vice president and head of the Capital Management group; Candice Bagby, senior executive vice president and head of the Consumer Banking group; and Claire Tucker, senior executive vice president and head of Commercial Banking. With guidance from the advisory group, the e-Commerce department is responsible for the development and implementation of AmSouth's e-Commerce strategy, development of e-products and Internet alliance partner selection and management. The group's main focus is on coordination of initiatives among all of the bank's lines of business, ensuring that AmSouth is making the right investments with the right priorities. All web planning and project management occurs within this core group in order to leverage existing technology, processes and expertise About AmSouth AmSouth (NYSE: ASO) is a regional bank holding company headquartered in Birmingham with $39.4 billion in assets, 600 branch banking offices and 1,300 ATMs. AmSouth operates in Alabama, Florida, Georgia, Kentucky, Louisiana, Mississippi, Tennessee and Virginia. AmSouth is a leader among regional banks in the Southeast in several key business segments, including consumer and commercial banking, small business banking, mortgage lending, equipment leasing, annuity and mutual fund sales, and trust and investment management services. AmSouth also offers a complete line of banking products and services at its web site, www.amsouth.com . SOURCE AmSouth Bank
|
 |
||||||
| ||||||
|
 |
|
|
|