Good News/Bad News: ICB/Sovereign Bank Merger

by Christopher Menkin

"You should look into the ICB & Sovereign Bank merger. It appears that Sovereign is closing down Ira Romoff's group. A lot of talented people will be let go by month end. It's a real shame. Although a little over a year old, ICB Leasing Corp. was developing into a real good funding source."

(name with held)

Ira Z. Romoff, Director of Leasing, ICB Leasing Corporation, New York City, confirmed the consolidation.

"I can't tell you when or how many will be let go," he said. "The consolidation will be to the Melville, Long Island office of Sovereign. You should be speaking with Chris Swanton, Executive V.P. of Sovereign Leasing at his Boston office.”

"They have a very active leasing company with a lot of money, particularly with the capital from Santander bank in Spain.”

October 24th , 2005 when Sovereign Bank made the announcement of the agreement to acquire Independence Community Bank Corp. of Brooklyn, New York for $42 per share in cash, they also announced that Banco Santander Central Hispano, S.A. of Madrid, Spain had agreed to make a $2.4 billion minority investment in Sovereign, by agreeing to purchase shares from Sovereign at $27 per share, “a significant premium over market,” said Jay Sidhu, chairman, president and CEO of Sovereign. “As a result of this purchase, Santander will own 19.8% of Sovereign's stock and the proceeds of this investment will facilitate our acquisition of Independence.”

"Sovereign Bank is a $63 billion financial institution with more than 650 community banking offices, over 1,000 ATMs, and approximately 10,000 team members, with principal markets in the Northeast United States. Sovereign is the 18th largest banking institution in the United States."

http://www.sovereignbank.com/companyinfo/default.asp

Sovereign Bank has recently also been in the news, with this press release on March 22, 2006: “ Sovereign Bancorp, Inc. (NYSE: SOV) and Relational Investors LLC, Sovereign's largest shareholder, announced that they have agreed to settle all their outstanding differences, to work together to build a better bank for Sovereign's shareholders and other constituencies, and to add two new directors to Sovereign's board.”

http://phx.corporate-ir.net/phoenix.zhtml?c=67999&p=irol-newsArticle&ID=834689&highlight=

In Mr. Romoff's April newsletter that was reported in Leasing News on April 5th, he stated, “Our goal is to create a larger, stronger and more diverse leasing company by consolidating the ICB Leasing business into Sovereign Bank's Commercial Equipment and Vehicle Finance platform. The combined entity can offer a wide range of Leasing and Equipment Finance products and will have a combined portfolio of over $1.2 billion. Our intent is to continue to provide you with the outstanding level of service that you expect and deserve. We are doing our best to make this a smooth process and will keep you updated as this transition continues.

“There will, of course, be some changes. I plan to stay as long as needed, but will not be involved in the long run with the ongoing entity."

When asked directly if he was going to retire again, he said, "I can't tell you when." When asked six months or twelve months, he responded, “Not a year, sooner," and then with a laugh, added,

"Don't worry, I won't go into the business of sending out an equipment leasing newsletter."

He again directed to speak with Chris Swanton at the Boston headquarters of the leasing operation. A call was made, but it was Good Friday.

Who is Ira Romoff? He has over 30 years in the financial services industry, as a commercial banker and leasing executive. He is past director of the Eastern Association of Equipment Lessors and the Equipment Leasing Association and is a member of both the United Association of Equipment Leasing and the National Vehicle Leasing Association.

He was executive vice president of European American Bank's Leasing Department and a member of EAB's Executive Management Group. Under Mr. Romoff's direction, the EAB Leasing Department has advanced as an integral part of the bank's record growth since 1991. As a result, EAB's Leasing Department ranks among the top fifteen bank leasing companies throughout the United States.

EAB purchased Fidelity Leasing April 14, 2000, and was the premier lessor when purchased by Citibank on February 12, 2001 for $1.6 billion and $350 million preferred stock. The news of closing the broker origination division hit all the leasing industry hard, especially on the east coast. Reaction was swift about the resignation of European American President Ira Romoff; the eminent departure by Fred Anderson along with Omar Diaz and Rich Illich.

August 18, 2004, he announced to Leasing News, he was back in business:

“WE WILL BE DRIVEN BY COMMON SENSE, NOT SILLY RULES. CREDIT AND COLLATERAL WILL COUNT, BUT SO WILL THE INTEGRITY OF THE LESSEE, LESSOR AND VENDOR.

“WE WILL SUPPORT OUR LESSORS WITH DIRECT CREDIT LINES WHEN NEEDED, PARTIAL AND FULL RECOURSE STRATEGIES AND NON RECOURSE FUNDING.

“WHILE OUR PRIMARY GOAL WILL BE TO BUILD A SOLID BANK LEASING OPERATION AS I HAVE DONE IN THE PAST, OUR METHOD WILL INCLUDE STRENGTHENING OUR LESSORS SO THAT THEIR FRANCHISE VALUES WILL GROW OVER TIME. THIS VALUE ADDED FOR OUR LESSORS WILL DIFFERENTIATE US FROM THE PACK.”

Certainly the ICB Leasing and Sovereign merger was not foreseen, and perhaps there will be a covenant not to compete, but at a certain date, Leasing News will most likely be receiving another announcement from the energetic veteran with a great sense of humor.