Tuesday, March 19, 2005
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The Start of our Archives----April 17, 2000-
(Leasing News started about ten years ago, maybe longer, as an e-mail to friends in the leasing business, and somehow grew into a “list serve” form where readers shared information, then I started including “news reports” or “reprints” of items. In June of 2000, we I realized we had over 2,000 on the mailing list, the newsletter was formerly incorporated, an advisory board named, and one of the things they suggested was calling it Kit Menkin's Leasing News. Eventually I changed it as it grew more into “news,” less the Bob Rodi-Ken Goodman Sumo wrestling match, and the web site brought more readers and the ability to specialize on leasing information. While the concept is basically the same, the format has evolved, as has our readership, estimated at 25,000, including readers out of the continental United States.
(Bob Rodi, CLP, industry leader, bon vivant, and as outspoken as I, was an early contributor, with many complaints that he was too “long winded.” The reality is he has always been “right on the money” when it comes to predicting where the industry is head. I rarely edited to shorten his comments in the early days. With the advent of the various leasing association's list serves, and also the concept of becoming a more widely read trade publication, our format became more “adult,” more serious, although I still like the humor and to kid, such as with Sal Maglietta of USbancorp, who's PR was not able to provide a picture of him with the press release.
(I began to save e-mail for use as an archive with Bob's prediction on internet leasing. This is the first I saved, and it starts here with the news the Imperial Business Credit, a leader in its field and funded by John Otto, was closing its doors---followed by Bob Rodi's accurate forecast about where internet leasing was going. Bob was one of the first to utilize the world wide web, to automate, his former partner became a millionaire from it, and here is his view---which by the way, turned out to be totally accurate and ahead of where it appeared the market place was going at the time as there was a wild rush to get in on web site application and processing, often equated to the time of the Oklahoma land rush. editor )
First, I have confirmed what was one of the rumors at the NAELB Conference ( and I was sitting both with Chuck Brazier and Gordon Roberts at lunch ): Imperial Business Credit, Inc. has closed it's doors as of Friday, the 14th of April. A leader in the small ticket industry. There are a lot of good people now looking for work.
This is a preview of Bob Rodi's Workshop to be held at the UAEL San Francisco Conference May 4-7, 2000. For those who will not be attending, his key thoughts are said here. For those interesting in learning more, Bob's workshop will be "standing room only:"
As you know this is a topic that is also near and dear to my heart. I am actively involved with internet marketing and have been since our first "sight" went live on the original Progidy Service 10 year ago. That was before most of the current leasing industry "gurus" ever heard of the internet and while a lot of the younger people were still worried about graduating from high school. The following is a short synopsis of one of by seminars at the SEC in SF called "Will the internet kill the App only market" For those that cannot attend I believe we will be video taping the session. I'm sure the tape will be worth ordering.
I agree with Rob Yohe. The internet is not going to sweep in and change commercial small ticket that drastically in the short run. Most small business people are going to be reluctant to make decisions involving tens of thousands of dollars without personal contact with the lessor. Equipment Leasing has always been a "hands on" business. Those that feel that the internet will completely take over small ticket are assuming that everything will be done as a "loan". I simply do not subscribe to this philosophy. Even the small ticket lease is a fairly complicated financial transaction that requires contact with the lessee to close. In my humble opinion I do not yet see that any internet based lessor has a huge advantage over a non-internet based lessor. I feel somewhat qualified to comment in this area a I am currently on both sides of the fence.
Rob is right in his assumption that the only "end users" logging on and looking for internet leasing are those that are using the "throw enough_ _ _ _ against the wall and something is bound to stick" approach. In over 4 years of marketing on the current version of the internet and several years of marketing on the predecessor to the modern internet (we had site on Prodigy, Compuserve and Genie back in those days) the bulk of end users are "shopping" or they might be other venture backed dot.com companies, or they are the desperate type that figure if they apply in enough places in the same day that maybe they'll slip through. At any rate the leasing industry has not been particularly partial to any of those customer profiles. This is not to say that our web site hasn't been extremely useful, producing a good return. It absolutely has but that has been primarily the result of our sales staff and affiliate group driving traffic to the site. Hardly a "rush" of business because the sight is sitting out there waiting for customers to log on and do Millions in business.
The surge in internet based leasing will come from leasing companies "partnering" with other lenders who are in unrelated but complimentary areas. This will however be a major marketing effort that will involve cross selling and trading of customer lists. I fundamentally believe that the future of small ticket lies in this direction but customer lists are closely guarded now and I shutter to think of the ramifications to a company like Lending Tree if it got circulated on the internet that they were selling customer data to other lenders. Not that it doesn't happen but the internet secrecy weeks would have a field day with them. This might ultimately affect their stock price. I just don't believe that is going to happen any time soon.
There are also the lenders who are currently excited about the flurry of activity surrounding the so called "financial portal" sites. How long does anybody think that these are going to be popular if the bulk of the business starts going to one, or a few dominant bidders? Once that becomes apparent lenders and customers will have the same level of interest in these sites as they have in left over meat loaf. Besides that, go and take a look. The same lenders are available on all the portals. That being the case what proprietary advantage will one portal offer over another to give the customer a reason to log on and use its services. I don't see that there is a significant price advantage as yet and most of these sites are offering less of a time advantage at the currently than the customer can get by picking up the phone and calling a leasing company directly. Unless there is huge price advantage, or some other proprietary advantage, why would I give my transaction over to some portal site who will shop it for me and let me know in 24 or 48 hours that they have 4 companies who like the deal? Now that I have found that out I still have to go negotiate with each to get my best deal. In this scenario what did I gain by doing it "on line"? What has the portal done to promote its own brand equity? What have any of the participating lenders done to advance their brand equity? Nothing that I can see.
Let us not forget the vendor in this equation. Until the internet totally circumvents the customer/vendor relationship vendors will be the ultimate source of deal flow. I would guess that even a customer with an approval from a financial portal would be swayed away if the vendor had a leasing option that could match or come close to the portal offer. How long will the lenders, subscribing to the portal sites, maintain interest if this is the case? Besides that, on small ticket leases,(the size that might actually get done en masse over the internet which I peg at $25K and below)the difference in dollar significant between a 12.5% yield and a 14% yield are not significant enough to sway the customer away from a trust relationship that they might have with the vendor.
Last but not least the "app only on the internet model" assumes that our customers (the eventual lessee) wakes up in the morning and says to himself "I think I'll log on to the internet and lease something today". Leasing has traditionally been a product that has been "sold" to customers. Unlike bank financing or other types of lending it has not been viewed as a "necessity". Leasing has always been supplementary. Look at our own industry literature where we call leasing an "alternate source of funding", use leasing to "supplement your bank lines", or "preserve your capital". The customer may want to "lease equipment to free up capital for other more productive purposes" We hardly train our customers to think of equipment leasing as a "can't do without" mainstream finance product.
I will close by saying that the bulk of the small ticket customers have not yet reached the level of technological sophistication or trust that will promote huge growth in "end user" internet leasing. Those that think traditional marketing methods will be completely replaced are grossly overestimating the short term potential of the internet. There will be a long transition period where customers will obviously try new methods of securing financing. Small business people will be cautious because that is their nature. Most of the Small business people I know have too much to lose by being reckless. The small segment that will embrace the internet with reckless abandon will probably get some great deals because all of the portals sites and their subscribers will need these types of success stories to prove they were right. I would advise anyone wondering about how to handle this situation to do the following: make sure they are current with, and knowledgeable about technological advancements, put together a web site that enhances your company image (in the short term a nice web site will be equated with "image and credibility"), don't write "checks" on your web site that you cannot cash with your actual capability. Most importantly convey to your customers that you are a "Hi Tech/Hi Touch" company. You will use technology to improve and deliver better service but also convey that the internet is one component of your CRM (customer relationship management)strategy but your primary concern is the needs of your lessee. Make your customer the beneficiary of technological by using it to address their agenda. Don't make your customer a "victim" of technological because you feel that you have to justify some investment you've made to be and internet leasing company.
Bob Rodi, CLP
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Popular Leasing USA Loses Its Argument in Home Town Court
“----dangerous precedent set?”
A three-judge panel in St. Louis County Circuit Court, Missouri, has ordered the addition of a bankrupt telecommunications company in New Jersey to more than $30 million “cost to lessor “ contract disputes.
Over 100 pending breach-of contract suits involving Norvergence leases were purchased by Popular Leasing USA of Baldwin, Missouri, a subsidiary of Banco Popular North America (BPNA.) They claim the lease payments should continue to be made.
The defendants have many issues, stating NorVergence should also be named in the legal dispute, as the contracts are fraudulent.
"The court finds in the absence of NorVergence Inc. (that) complete relief cannot be accorded among those already parties," judges Melvyn W. Wiesman, Barbara Wallace and Ellen Levy Siwak ruled. "Based upon the oral argument of counsel, the court finds it feasible to join NorVergence as a party."
“The effect of a court order adding NorVergence on the industry of "buying and selling of contracts would be devastating," Popular Leasing USA Attorney Randal Scherck said in his original arguments, according to the St. Louis Post-Dispatch. " It sets a dangerous precedent,"
Daniel V. Conlisk, the attorney for approximately 75 of the lessees, argued that his clients need to add NorVergence Inc. of Newark, N.J., even though the company is in bankruptcy proceedings as he claims they were the victims of fraud by NorVergence and perhaps the cause why his clients no longer are making leasing payments regarding contracts the companies signed with NorVergence for Internet, telephone and cell-phone service.
Randall F. Scherck, lawyer for Popular Leasing USA, argued that such an order from them was not necessary as their cause centered around enforcing the "stream of payment" of the leasing contracts.
Scherck acknowledged that Popular Leasing purchased the leasing contracts from NorVergence and denies that Popular Leasing USA was involved in any alleged “fraud.”
One of the arguments centers around the alleged high-tech, next-generation network accelerator called "The Matrix", allegedly costing $1500 new and $500 used. NorVergence salesmen claimed the product was a "spectacular innovation" which would channel telephones, Internet and cell phone service onto single line.
Most of the leases had listed only one Matrix device, although some had two, but all the “cost to lessor” were quite different. It appears no one at Popular Leasing USA caught the description being the same in funding of the over 100 leases, obtaining insurance certificates or filing personal property tax reports or UCC forms, despite the many different prices of the lease contracts they purchased.
Customers were reportedly told they'd get unlimited service if they would sign leases and pay fixed-price bills monthly. When "The Matrix" turned out to be a decidedly low-tech machine - basically a router - charges of fraud were filed and by June of last year, NorVergence was in bankruptcy.
Conlisk position is they were fraudulent contracts, adding that the defendants also had the right to examine the relationship between NorVergence and Popular Leasing in the preparation of the lease contracts, evidently as the cause to cease making the “stream of contract” payments.
In a related story, according to a press release : “ Popular Leasing U.S.A., announced that it has expanded its Capital Markets Group to include a Commercial Finance Division, complementing the group's existing Healthcare and Technology Division.
“Headed by Kevin Ward, the division will deliver financing solutions for mid- and large-ticket ($100,000 to $10 million) equipment transactions. Additionally, the unit will expand its current portfolio acquisition and vendor program finance initiatives for construction, manufacturing, printing and other industries.
“'Our expansion into the commercial equipment arena is the next logical step to meet our aggressive growth goals by making available attractive financial products and services geared to industry-specific needs and requirements,'” said Ward, formerly of Sierra Cities. ‘Addressing our customer's needs has lead to our continued development of value-added products and services, and we remain committed to helping them expand their businesses and achieve their goals.'
“ With direct, vendor and manufacturer programs available, Popular Leasing's Commercial Finance Division will offer master lease lines of credit, sale and leaseback transactions, and equipment portfolio purchases. Its equipment specialties include machine tools, packaging and food processing, material handling, plastics, mobile and tower cranes, telecommunications, rail maintenance, and information technology.
“The new division will be headquartered in Ewing, N.J., with offices in Littleton, Colorado, and Rio Verde, Arizona. About Popular Leasing U.S.A. Popular Leasing is a subsidiary of Banco Popular North America. Established in 1996, Popular Leasing is now the 32nd largest bank-affiliated leasing company in the U.S., with a focus on medical and commercial markets in all 50 states, Canada, Puerto Rico and the U.S. Virgin Islands. Headquartered in Ballwin, Missouri, Popular Leasing has a network of 15 sales offices in nine states. For further information, contact Popular Leasing at 800-829-9411 or visit www.popularleasingusa.com .
“ About Banco Popular Banco Popular North America is a subsidiary of Popular, Inc., which, with more than $40 billion in assets, is ranked among the country's 30 largest bank holding companies. BPNA operates over 135 branches in California, Texas, Illinois, New York, New Jersey and Florida, as well as 130 financial services stores under the name of Popular Cash Express. Banco Popular was named one of the “100 Best Companies to Work For” in 2005 by FORTUNE Magazine and ranks among the top 10 Small Business Administration lenders in the country. Banco Popular was founded 112 years ago in the U.S. Commonwealth of Puerto Rico.”
(Best contact on this new division is Doug Mehl, Commercial Finance Division 800-770-3052, formerly with Safeco and GE, possessing tremendous management skills and marketing abilities. editor)
Grassley Still After “Silo's”
Senate Finance Chairman Charles Grassley (R-Iowa) complains that the U.S. tax code still has many loopholes that allow companies to hide their assets in offshore accounts.
Grassley's remarks were directed at the 2004 corporate tax bill that he helped craft. Speaking at a committee hearing to explore reasons for a $312 billion tax gap in uncollected taxes, Grassley said the tax shelter legislation that passed out of the Senate last year did not go far enough, and noted that it still contains a loophole that permits corporations to continue making what he views as questionable transactions.
He took specific aim at legislation that would curb so-called leasing tax shelters for sale-in and lease out transactions, otherwise referred to as LILOs and SILOs.
Grassley lamented that existing leasing arrangements can still proceed under the bill if the transactions were submitted for approval by the Federal Transit Administration after June 30, 2003, and prior to March 13, 2004.
"Incredibly, this provides shelter promoters another full year to get their deals approved by the FTA," Grassley said. The legislation applied to leases entered into after March 12, 2004.
David G. Mayer's Business Leasing News—April Edition
1. Patton Boggs Aviation Briefing Exposes Five Hot Issues in Business Aviation
Testimonials on Mayer's “Business Leasing for Dummies”
From “Leasing Gems” by Jeffrey Taylor
“My very good friend, (which I distinguish from the phrase my good friend) David Mayer (a lawyer in Texas) has decided to stop publishing his book, Business Leasing for Dummies. He recently told readers in his newsletter (hyperlink below) that it was time to stop publishing his book after 42 months in print.
“BTW, I have a personal autographed first edition, which I now know is going to go up in value. The book means a lot to me since I stood in line for hours to get it when David signed it at an ELA annual meeting.
“I still remember getting angry with him, since he took so long to sign my book as he relished in the moment.
“I'd hate to part with it, since it sits on my research shelf next to all of my Sudhir originals.
“Bidding starts at $1,000.”
(Amazon has three of David's used books for sale, starting at $45.00
Ken Wheeler of EFG Leasing, Fresno, says the book enabled him “...to launch its ASP credit decisioning system, with complete application tracking. The ASP offering allows EFG to provide rapid solutions to subscribers. This system will give EFG clients the ability to enter credit applications in under minute via its secure web-site. Receive a credit decision within 30 minutes via email from the ASP system. The client can then with a simple keystroke print lease documents, track the funding process, order site inspections, and a host of other features.
Jim Raeder of CapitalWerks, Southern California, says the book has enabled his new sales people to learn the business like never before.
“This book is more than the basics. It explains how leasing works and many of our salesmen have found that very interesting.”
Tom Landmark of USbancorp Manifest Leasing:
“My second grade son read the book and immediately got a job working for Chris Canavati at Alpha Capital. Hopefully he will be old enough soon to read “ Power Tools For Small Ticket Leasing 2004” by Galtelli, Johnson and Marks and work for our company by attracting more broker business.”
Joe Woodley of the United Association of Equipment Leasing says both books will be door prizes at the Scottsdale Conference.
(Don't forget to attend the “open house” of Santa Barbara Capital Leasing with Santa Barbara Pinot Noir wine from Paul Menzel and Willamette Pinot Noir from Jim Merrilees.)
280 Jobs on Line with GE Purchase of Bombardier Finance Unit
GE Commercial Finance announced yesterday it will purchase Bombardier Capital's inventory finance division for $1.4 billion in cash. This division is headquartered in Colchester, Vermont, with an estimated 280 employees.
Following their habit, this division will most likely be absorbed into the GE family operation with most employees being let go; however, others will be offered employment opportunities in other locations, most likely. Closing of the purchase may occur as early as the end of the second quarter of this years. Employees most likely will be given an incentive to stay until the closing of the sale of the operation.
GE will also assume $1 billion in debt and other liabilities in the deal.
The Bombardier Capital division is comprised of four main business units that provide financing for a variety of products, including snowmobiles, all terrain vehicles, boats, motors, and boat trailers, as well as recreational vehicles.
Separately, Bombardier reported it will receive cash proceeds of $825 million from the sale, which marks the continuation of Bombardier Capital's portfolio wind-down, initiated in 2001.
Bombardier Capital also reported it will continue its activities of interim financing, as well as the wind-down of the remaining portfolios, including railcar leasing.
New Bankruptcy Law
The Equipment Leasing Association was active in the passage of this legislation.
This is from the ELTnews to members:
This measure will prevent certain debtors from discharging credit card debt and other loans through the imposition of a means based standard and makes a number of debts non-dischargeable. This legislation includes two specific provisions of benefit to the equipment leasing industry.
First, the legislation includes an ELA endorsed provision which clarifies that the debtor-lessee is obligated to perform all non-monetary, as well as monetary obligations, 60 days after the order for relief pending assumption or rejection of the lease. This change is consistent with legislative intent and is designed to ensure that bankruptcy courts throughout the country are consistent in their interpretation of the bankruptcy code. The Ninth Circuit Court of Appeals had ruled in 1997 that the bankruptcy code requires a bankrupt lessee to cure both monetary and non-monetary defaults in order to assume a lease while the First Circuit Court of Appeals in 2004 ruled that a bankrupt debtor did not have to cure non-monetary defaults as a condition to assumption of an unexpired lease. This legislation will resolve this conflict between the circuits.
Second, this reform measure also includes a provision that would make it easier for equipment lessors to satisfy the "ordinary course of business" rule and thus keep rents paid within 90 days of the debtor-lessee's bankruptcy. Under current practice, it is common for a debtor-lessee to make a series of irregular rental shortly before declaring bankruptcy. In recent years, other creditors of a bankrupt lessee have used computer programs to send out a large number of preference attacks against anyone who has received payments for a large debtor-lessee within 90 days of the debtor-lessee's bankruptcy. Through the filing of these "technogically assisted preference claims", certain creditors have successfully reclaimed certain rental payments made by the lessee to the lessor. Under this reform measure, if these irregular rental payments from the lessee are viewed as coming within the "ordinary course of business" in the industry then the lessor will be able to keep these payments.
NACM Congratulates Congress on Overhauling
Columbia, Maryland -- The National Association of Credit Management (NACM) applauds members of the U.S. House of Representatives, who on April 14, by a 302 to 126 vote, passed S. 256, known as The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. The Senate passed the bill March 10, by a vote of 75-24. President George W. Bush has said he would sign the bill if enacted by Congress. The bill takes affect 180 days after the President signs it into law.
NACM has been pushing for the Bankruptcy Code to be overhauled with regard to commercial bankruptcies over the last two administrations. Robin Schauseil, CAE, NACM President said, "NACM has worked tirelessly over the last five years to see that this bankruptcy reform measure, vital to commercial creditors, was passed. The benefit to the business credit community in the area of preferences, in particular, is enormous."
Although the consumer aspects of the bill have received most of the media attention, she pointed out important measures vital to commercial creditors that were at stake, and have been addressed in S. 256. Those issues include:
1. The creation of an expedited procedure for small businesses in Chapter 11
Small Business Reorganization
NACM sought to create an expedited procedure to assist small businesses through a Chapter 11 reorganization process as expeditiously as possible. Clearly, the less time a small business spends in the reorganization process in the courts, the more assets are preserved in that estate for creditors and for the business itself.
Under S. 256, a small business is defined as a company with $2 million or less in secured and unsecured debts (excluding debts owed to one or more affiliates or insiders). The hearing on the disclosure statement and hearing on confirmation of a plan of reorganization can be combined. The debtor has a maximum of 300 days from the date of the filing for bankruptcy in which to have the plan confirmed, and must have a plan confirmed by a maximum of 45 days after the reorganization plan is filed with the court. The ability to have a case converted from a Chapter 11 to a Chapter 7 is now subject to a higher standard than previously allowed. Debtors may use standardized forms and disclosure statements that will be developed by the Advisory Council to the Courts. Small business senior management is strongly urged, but not necessarily required, to attend all meetings with the trustee. Also, under a separate provision, S. 256 allows the courts to permit small businesses to serve ! as members of a creditors' committee if the small businesses more accurately reflect the aggregate debt load of the debtor.
Preferences Previously, all payments made by a debtor to creditors within 90 days of a bankruptcy filing had to be returned to the debtor's estate, unless the creditor could prove that the payment was made in the "ordinary course of business". Typically, the amount of the preference action against small business creditors represented less than the cost of litigation to defend the payment regardless of the merits of the case. Preference recoveries rarely were returned to debtors' estates, and often paid only for the cost of issuing the preference challenges.
NACM sought to curtail the blanket pursuit of preference recoveries against unsecured creditors. S. 256 addresses this issue by stating that there can be no preference recovery action brought against a non-insider business trade grantor if the aggregate amount of the preference is $5,000 or less. Amounts recovered with this threshold will increase the likelihood that preference recoveries will benefit all creditors, and not pay merely for collection efforts. Preference recovery actions against non-insiders seeking less than $10,000 must be brought to the bankruptcy court in the district where the trade creditor has its principal place of business. This should prevent the practice of allowing the trustees for the debtor to issue blanket preference challenges.
The test for whether a payment, under the preference defense provisions, is made in the ordinary course of business according to ordinary business terms has been expanded to include payment of a debt incurred by the debtor in the ordinary course of business between the debtor and creditor; payment made in the ordinary course of business or financial affairs between the debtor and creditor; or payment made according to ordinary business terms of the industry. This provision forces the court to look to the pre-petition history between the debtor and creditor as a definition of ordinary course of business. Should there be insufficient history between the debtor and creditor, the courts can look to industry norms to determine ordinary course of business benchmarks.
NACM proposed a modification in the treatment of reclamation demands to afford greater relief to creditors under the Code. A provision in S. 256 gives the credit grantor the option of one of two approaches for relief under the reclamation code: the creditor can exert a reclamation demand, enjoying the return of goods delivered within 45 days; or, as an alternative, should the return of goods be impossible or impractical, the creditor may enjoy an administrative priority for goods delivered within 20 days of the filing. The bill creates a bright line test for administrative priorities set at 20 days prior to the filing for bankruptcy for the receipt of goods by the debtor.
Retail Lease Assumption Because the bankruptcy courts had been willing to give debtors virtual unlimited opportunity to decide whether or not to keep the business open, the courts were very liberal in extending the time for the rejection or assumption of a lease. S. 256 proposes that a definite limit be set by which the tenant would be required to either assume or reject the lease. The bankruptcy court could not extend that for any reason.
S.256 also mandates that nonresidential real property leases be rejected or assumed before the earlier of 120 days after the order for relief or the entry of order confirming a plan. If no plan is confirmed in the 120-day period, the period can be extended to no longer than 210 days with the consent of the lessor or court approval, so long as the trustee or debtor in possession has performed all post-petition obligations in a timely manner.
Homestead Exemption Under current law, each state is afforded the prerogative of establishing a set of exemptions to benefit all creditors. However, states like Florida and Texas allow for an unlimited homestead exemption on personal property, effectively avoiding collection efforts. Congress is addressing these abuses by creating a federal treatment for homestead exemptions. S. 256 establishes a cap of $125,000 for homestead exemptions. However, the bill allows some accommodation for the prior state of residency of the debtor but generally a 1,215-day period is required to exempt property up to the $125,000 level.
NACM believes this is a victory for commercial credit grantors, particularly small businesses. Says Schauseil, "It's been a long, drawn-out battle to get changes to the commercial Bankruptcy Code, but this new legislation is comprehensive in addressing reform, and was worth the wait."
For more information on this bill, please visit www.nacm.org .
CIT Announces Quarterly Dividend For First Quarter 2005
NEW YORK, / -- CIT Group Inc. (NYSE: CIT)
announced that its Board of Directors has declared a regular quarterly cash dividend of $.16 per share, a 23% increase over last quarter's dividend of $.13 per share. The dividend is payable on May 30, 2005 to shareholders of record on May 13, 2005.
- About CIT
CIT Group Inc. (NYSE: CIT), a leading commercial and consumer finance company, provides clients with financing and leasing products and advisory services. Founded in 1908, CIT has nearly $60 billion in assets under management and possesses the financial resources, industry expertise and product knowledge to serve the needs of clients across approximately 30 industries. CIT, a Fortune 500 company and a component of the S&P 500 Index, holds leading positions in vendor financing, factoring, equipment and transportation financing, Small Business Administration loans, and asset-based lending. CIT, with its principal offices in Livingston, New Jersey and New York City, has approximately 6,000 employees in locations throughout North America, Europe, Latin and South America, and the Pacific Rim. For more information, visit http://www.cit.com
Capital Crossing Bank Announces Quarterly Results and Increase to
“During the first quarter of 2005, the Bank's leasing subsidiary, Dolphin Capital Corp., originated leases with an aggregate investment balance of $14.5 million, compared to the same period in 2004 when it originated leases with an aggregate investment balance of $11.2 million. Dolphin Capital Corp.'s net income was $870,000 for the quarter ended March 31, 2005 compared to $763,000 for the same period in 2004.”
BOSTON----Capital Crossing Bank (NASDAQ:CAPX) (the "Bank") reported consolidated net income of $4.7 million, or $0.65 per diluted share, for the first quarter of 2005, compared to consolidated net income of $5.2 million, or $0.66 per diluted share, for the same period in 2004.
Nicholas W. Lazares, the Bank's Chairman and Co-Chief Executive Officer, stated, "We are pleased to report another strong quarter at Capital Crossing Bank." Mr. Lazares further stated, "A significant portion of the Bank's earnings arises from the recognition of "transactional" income. In the first quarter of 2005, the Bank recognized approximately $9.8 million of transactional income, including $6.3 million of accelerated interest income associated with loan and lease payoffs and $3.5 million in net gains on sales of other real estate owned and property in possession. By contrast, in the first quarter of 2004, the Bank recognized approximately $8.3 million of transactional income, including $7.4 million of accelerated interest income associated with loan and lease payoffs, $775,000 in gains on sales of loans and $135,000 in net gains on sales of other real estate owned and property in possession. Since the level of loan and lease payoffs is to a certain extent beyond our control, the Bank's earnings may fluctuate significantly in the future."
Richard Wayne, the Bank's President and Co-Chief Executive Officer, explained that, "The volume of our loan acquisitions can be unpredictable from quarter-to-quarter. For example, in the first quarter of 2005, we purchased loans with outstanding principal balances of $50.9 million for a purchase price of $44.4 million, compared to the same period in 2004, when we purchased loans with outstanding principal balances of $18.9 million for a purchase price of $19.0 million." Mr. Wayne continued, "During the course of our review of available loan portfolios, we will, in some cases, decline to bid on a portfolio after analyzing the results of our due diligence review, or, in other instances, be outbid by other purchasers. We simply cannot predict how often we will successfully bid on a loan portfolio."
Mr. Wayne further stated, "Our total non-performing assets decreased $2.8 million from $39.7 million at December 31, 2004 to $36.9 million at March 31, 2005. While a substantial majority of the loan and leases we have acquired in recent years have been performing, we have also acquired appropriately priced non-performing loans and leases. At March 31, 2005, we held loans and leases with net investment balances of $17.2 million which were acquired as non-performing. In the past, our pricing strategy and the level of discount we obtain on such loans and leases has enabled us to, over time, realize significant levels of transactional income from these assets."
Since December 31, 2004, the Bank's book value per share has increased $0.13 from $14.96 to $15.09 at March 31, 2005. Additionally, the return on stockholders' equity was 21.01% for the first quarter of 2005 compared to 22.95% for the same period in 2004.
The Bank also announced today that it has increased the amount of its common stock repurchase program by $10.0 million. As of April 13, 2005, the Bank may repurchase up to approximately $12.2 million of its common stock in the open market or in privately negotiated transactions, subject to regulatory considerations, through December 31, 2005. This increase to the repurchase program has been approved by the Bank's Board of Directors and regulatory authorities.
The Bank continued to repurchase shares of its common stock under its common stock repurchase program during the first quarter of 2005. As of March 31, 2005, the Bank had repurchased 6,183,918 shares under its current repurchase program and previous repurchase programs.
full press release at:
Information on Dolphin Capital
Fitch Upgrades Marlin Leasing Receivables VI & VII,
CHICAGO)----Fitch Ratings upgrades the following classes of securities for Marlin Leasing Receivables VI, LLC, series 2002-1 (Marlin 2002-1) and Marlin Leasing Receivables VII, LLC, Series 2003-1 (Marlin 2003-1).
Marlin Leasing Receivables VI, LLC, series 2002-1 (Marlin 2002-1)
In its review of the Marlin 2002-1 transaction, Fitch noted increasing levels of credit enhancement available to the class A, B, and C notes. The continued increase in credit enhancement is a result of better than expected portfolio performance. As of the March 2005 reporting, 30 plus day delinquencies equal 2.20%, cumulative net losses are 2.38%, and the recovery rate on previously defaulted contracts is 36.45%. In addition, the transaction also benefits from a reserve account ($2,006,250), overcollateralization ($1,782,421), and expected residual realizations.
Similarly, in its review of the Marlin 2003-1 transaction, Fitch noted increasing levels of credit enhancement available to the class A, B, and C notes. The continued increase in credit enhancement is a result of better than expected portfolio performance. As of March 2005 reporting, 30 plus day delinquencies equal 2.29%, cumulative net losses are 1.85%, and the recovery rate on previously defaulted contracts is 33.93%. In addition, the transaction also benefits from a reserve account ($2,371,050), over collateralization ($5,330,923), and expected residual realizations.
In addition to the aforementioned transactions, Fitch also rated the Marlin 1999-2, 2000-1, and 2001-1 transactions, which matured in December 2002, March 2004, and July 2004, respectively. All three transactions outperformed original base case expectations, with consistently low delinquency and default rates, resulting in steadily increasing levels of credit enhancement available to all classes.
Fitch will continue to closely monitor these transactions and may take additional rating action in the event of changes in performance and credit enhancement measures.
Fitch Ratings Du Trieu, 312-368-2091 Juveria Mozaffar, 312-606-2335 John Bella Jr., 312-368-2058 Sandro Scenga, 212-908-0278 (Media Relations)
Oil and Gas Finance Executive Joins GE Commercial Finance Energy Financial Services to Grow Investments with Oil and Gas Producers
STAMFORD, Conn.----GE Commercial Finance Energy Financial Services announced that P. Richard "Dick" Gessinger has joined its Oil and Gas unit as vice president of origination. He will originate partnership investments with independent private and public oil and gas producers to acquire or monetize proven reserves.
"Dick's experience as a commercial banker, investment banker, and exploration and production company executive gives him a rare blend of qualifications as a financial originator," said John Schaeffer, the GE Commercial Finance Energy Financial Services Managing Director who heads its Oil and Gas unit. "We're delighted to have Dick join our team."
Gessinger, who is Stamford-based, has more than 30 years experience as an energy finance professional, most recently having served as chief financial officer of a NYSE-listed Gulf Coast energy exploration company. His corporate finance experience has helped many energy companies grow throughout the oil and gas industry's economic cycles. Gessinger holds an MBA in Corporate Finance and a BA degree in Political Science, both from Emory University.
Since 1991, the unit's 18 professionals have provided $2.2 billion in partnership equity and $300 million in senior secured debt for its partner-operators who benefit from the team's industry expertise and long-term investment orientation. Based in Stamford, Connecticut, with offices in Houston, Texas and Denver, Colorado, EFS's Oil and Gas unit currently has more than $1.5 billion of investments with estimated daily production of 140 million cubic feet of natural gas and 31,000 barrels of oil. Visit: www.oilandgaspartners.com
About GE Commercial Finance Energy Financial Services
GE Commercial Finance Energy Financial Services, based in Stamford, Connecticut, invests about $3 billion annually in the world's most capital-intensive industry, energy. With more than $11 billion in assets under management, GE Commercial Finance Energy Financial Services offers structured equity, leveraged leasing, partnerships, project finance and broad-based commercial finance to the global energy industry from wellhead to wall socket. For more information, visit www.geenergyfinancialservices.com.
About GE Commercial Finance and GE
GE Commercial Finance, which offers businesses around the globe an array of financial products and services, has assets of over $230 billion and is headquartered in Stamford, Connecticut. GE (NYSE:GE) is Imagination at Work - a diversified technology, media and financial services company focused on solving some of the world's toughest problems. With products and services ranging from aircraft engines, power generation, water processing and security technology to medical imaging, business and consumer financing, media content and advanced materials, GE serves customers in more than 100 countries and employs more than 300,000 people worldwide. For more information, visit the company's Web site at www.ge.com.
GE Commercial Finance Ken Koprowski, 203-961-5743
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1721- Roger Sherman, American statesman, member of the Continental Congress (1774—81 and 1783—84). signer of the Declaration of Independence and of the Constitution, was born at Newton, MA. Roger Sherman is the only American to sign four important historical documents: The Continental Association of 1774; The Declaration of Independence; The Articles of Confederation; and The Federal Constitution He also calculated astronomical and calendar information for an almanac. Sherman died at New Haven, CT, July 23, 1793.
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