Friday, November 5, 2010
Correction: Wrong Tetra Named
You May Have Missed---
Correction: Wrong Tetra Named
In Wednesday, November 3, 2010 edition article: Representation and Warranty Follow-Up the name of a company was not correct. It was an error on the writer’s part as the Allied Health documentation had the correct name, but not the article itself. In proofing, the error was not caught by the editor. It was corrected on line when brought to Leasing News’ attention by a reader:
“There are also some other issues as a number of the transactions were really sub-brokered. Meaning the original party sent to a "broker/lessor", who in turn then found a home. One such company, Tetra Corporate Services, Salt Lake City, Utah (TCS New Jersey, LP) took as many as it could get. There are others who did the same thing.”
While the correction was being made on line, Leasing News received the following e-mail:
Kit Menkin, editor
Representation and Warranty Follow-Up
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More Layoffs at LEAF Financial
Bob Hunter, Executive Vice President of Sales & Marketing leaves LEAF Financial, Philadelphia, Pennsylvania....was he asked to go or just realized his salary without any sales commission isn't enough to live on? He also was on the executive committee, involved in all decisions and the "face" of LEAF Financial. The scuttlebutt is he was kicked out. He never liked Leasing News, anyway.
Bill Conway laid off, Vice-President of Credit... Colleen White, Director of Operations laid off, too...
A senior executive told employees: ..."the worse is behind us....we will get new funding sources"....but since they can't sell any Funds, the ex-President of MERIT is now a customer service phone assistant…fielding calls from all the holders of those past LEAF Funds I, II and III....who want to cash in.
Lines of credit come in at 85%...but where does LEAF have money to pay for the rest?
The only staff group not downsized: Collections and Litigation headed by Jim Grant. But hey, even his wife was laid off, who was senior operations manager…"That's cold!" Leasing News was told by an insider.
2009 SEC LEAF filings showed 377 employees; February down to 271; reportedly to 113 in July, closes down LEAF Specialty, 80 in Missouri, add the recent cuts---so what employees are left---collectors?
CEO Crit DeMent has been working his way up the ladder at the Equipment Leasing and Finance Association, now Chairman-elect. The question is what company will he be working for when he becomes chairman. Rumor is right now he is personally taking leasing applications from prospective lessees, while looking for money to fund what every he can approve.
What comes around, goes around.
Perhaps DeMent is beginning to learn how the executives and employees of companies who he bought in the last few years felt: Lucky Jim Harris of ALLCO retired March, 2005, when his company was purchased, and employees were eventually all let go; LEAF Third Party Funding in Southern California was purchased and employees let go (Paul Menzel, CLP, now president of Financial Pacific, Washington, he really lucked out); NetBank Financial, changed to Lease Specialty Finance, bought and sold, then closed this year (Dwight Galloway at last count was "unemployed," but his staff was starting First Trillion, and time will tell about this in today’s marketplace); the only operation still going was from the purchase in November 26, 2007 LEAF Financial purchase Dolphin, Missouri, from Lehman Brothers Bank for about $167 million. Purportedly the unit works independent and is heavily into copier leasing; perhaps that is why they are doing so well.
Previous LEAF articles:
Cartoon---Cret DeMent now handling lease applications
Leasing Business Improvement
Feedback from brokers, lessors, and funders indicates an increase in business, including better quality applications. The subprime market appears to always be there, but what has been lacking is the demand by better credits.
In the reporting of banks third quarters, it is noticeable that they have not been lending, but the trend has been in the opposite. Even in the used equipment marketplace from “off lease” Equipment, losses have fallen off, and as Ed Castagna has reported, the bad fruit has fallen from the trees. He says the used equipment market will see an increase in prices, not a decrease as there is less used equipment available.
In looking at the figures from the SEC filings of banks and publically held leasing companies, leasing numbers have been decreasing compared with the last year, not increasing. The good news has been so has the "losses." Many of the banks have gotten out of leasing, citing the losses and other problems. The reality is they also have been having these problems in other divisions. Leasing is not the only division that has been down.
The press releases from the financial and bank companies have been written to sell stock, so they emphasize all the good qualities. Some of them have been excellent, such as US Bank, where Richard K. Davis Chairman, President and Chief Executive Officer, should put the graphics in a frame in his office, or at least the hallway, as they are works of "art." No sarcasm, as they really are very attractive. It is American Nouveau Art.
The stock analyst who participate in the telephone calls, especially regarding financial and leasing companies seem to look more at the delinquency ratio's than anything else. It is my personal experience that the telephone conference calls are orchestrated with the favorite stock analyst getting the first play. I gave up on the Marlin telephone conferences as I was never called (I wonder why?)
The point is many of the financial writers and analysts do not know how to read a financial statement, rely on the public relations, the press release, and emphasize things that are more common sense than a Greg Steffes at Bank of the West would read in the numbers.
One of the problems with the banks is the leasing numbers are consolidated, so you see one foot in an ice bucket and the other in a raging fire, so it looks like its all under control.
First, wait for the SEC filing. Most of the entities have this ready, but wait until the press release is issued and a telephone conference ready. To get to this point, they have to have the SEC filing, but often delay it. Marlin Business Service is a master at this.
In a bank statement, the loss numbers do have meaning, as the stock analyst realize, but besides the footnotes (that are always the key to any financial statement) is the list of loans by assets by the last three quarters and year end. You can see the categories that the bank is interested in, what they are exiting, and what they want to grow. Unfortunately what I have observed is cutting back in all categories (land and construction loan down is a given, as well a residential loans).
In most that have been reported here by Leasing News, all the categories are down. Some banks have certain categories down more than others. They report it is the "demand." They mean the demand by good credits, and that is where the debate begins. In the old school, a good loan was one that paid out. Late charges were a "profit.''
I labeled the down side in loan activity at Key Corp. as "timid." Some would say it was "careful," but in reality, all loans should be made "carefully." The confidence was not there. The banks have become “timid.” They had the cash. They hopefully had the talent to tell a loan that would pay out and one that would not. But they were "timid" to ask the better credits, and what happens, when you take the poor credits, that's what you begin to attract. Nothing wrong with that, as long as your yield and collection operation is set up for it. But if the margin is not there, better start looking for employment elsewhere.
The economy is coming back. We have been through a period of "survival of the fittest." If you are pessimistic, that's the way your business will wind up. If you weathered the storm, stand by as good times are on their way back. It might be a Merry Christmas!
Leasing Industry Help Wanted
Please see our Job Wanted section for possible new employees.
Shawn Arnone has joined EverBank Commercial Finance, Parsippany, New Jersey, as senior vice president for Business Development, managing the business development operations. Previously he held senior business development roles at Direct Capital, US Express Leasing and CIT Group, Inc. He has also served as a vice president at Key Equipment Finance, and in sales and management positions at Citicapital, Copelco Capital, and Canon Financial Services. Arnone is an active member of the Equipment Leasing and Finance Association and has served on the Captive and Vendor Finance Business Steering Committee. •City University of New York-Baruch College - Zicklin School of Business •North Bergen High School •St. Peter's College
Richard Barret has been appointed to be in charge of Huntington Equipment Finance, Columbus, Ohio direct business aircraft financing segment, specializing in corporate and business aviation finance. He previously was with RBS Asset Finance.
Kip Curran has been appointed to be in charge of Huntington Equipment Finance, Columbus, Ohio, rail financing segment, specializing in providing long-term tax and non-tax financial solutions to class one railroads, railcar operators, and shippers. Previously he was a specialist in rail finance with LaSalle National Leasing Corp. and Maxus Leasing Group.
Jim Jenkins has been named National Sales Manager of SunTrust Equipment Finance & Leasing Corp., Atlanta, Georgia. He will be based in Towson, Maryland. Most recently he led the global captive finance business of Sun Microsystems Inc., the internal leasing and finance organization responsible for helping businesses acquire Sun technology. Prior to his 14-year association with Sun Microsystems Global Financial Services, he held various leadership positions with increasing responsibilities in sales, business and program development, and global sales management with GE Capital, Comdisco, Northern Telecom Finance Corp., and US Leasing Corporation. Towson University BS, Marketing and Finance
Michael Labrum has been appointed to be in charge of Huntington Equipment Finance, Columbus, Ohio, lender finance segment, providing highly structured debt facilities and full banking services to specialty asset finance and leasing companies. He previously led PNC’s Lender Finance business segment as Managing Director/Senior Vice President; Vice President First Union; Vice President CoreStates Bank. Rutgers, The State University of New Jersey-Camden MBA, Finance 1988 – 1990; La Salle University - School of Business Administration B.S./B.A., Finance, Spanish, Int'l. Relations 1978 – 1982; University of Madrid, Madrid, Spain Junior Year Abroad Program
Brian Madison as senior vice president of U.S. vendor alliances for Key Equipment Finance, Superior, Colorado. He is responsible for ongoing strategic leadership of Key Equipment Finance's U.S. vendor commercial and government organizations. Prior he was with Microsoft, where he was the general manager of Microsoft Financing. Previously, he was managing director of global product management for Citigroup's CitiCapital Commercial Finance group, as well as managing director for business technology finance. This followed his position as president of Mellon US Leasing. Madison also held business development, marketing and sales positions for GE Capital's Vendor Financial Services group and was district manager for Tokai Financial Services. •University of Washington, Michael G. Foster School of Business
Manny Rogosich was hired as Senior Vice President of Marketing and special projects for Irontrax, LLC, Cleveland, Ohio. He previously spent 19 years as the Senior Vice President of Marketing at Nassau Asset Management.
### Press Release ############################
Lease Portfolio Service Contract Awarded to Orion First Financial by Banner Bank
-Gig Harbor WA, Orion First Financial announced that it has been awarded a servicing contract from Banner Bank for a portfolio of approximately 500 equipment lease and loan contracts valued at just under $8MM. The portfolio consists of contracts with a variety of small businesses located across the country.
Orion First Financial, located in Gig Harbor WA, is a highly regarded independent servicer for the equipment finance industry.
“We were gratified to be awarded this service contract by Banner Bank, considering the Bank’s standards for service quality, their rigorous review of our capabilities, and the complexities of this particular portfolio of contracts.” said David T. Schaefer, founder and President of Orion First Financial.
Portfolio servicing was transferred to Orion effective June 30, 2010 after Banner Bank concluded their search for a servicer that would achieve superior results at a low cost.
“Using Orion as a servicer was a logical choice for Banner Bank as they are a Washington based company with nationwide servicing capabilities” said Rick Barton, Executive Vice President and Chief Credit Officer of Banner Bank.
Orion First Financial has been providing exceptional servicing for leading bank and non-bank equipment leasing portfolios since 2001. Orion differentiates itself from other servicing companies through the collective experience and expertise of its staff, using proven management processes to minimize portfolio delinquencies and reduce losses for maximum profitability. Orion combines expert staffing and procedures with state of the art technology, to deliver optimum portfolio profitability while ensuring that their clients’ finance customers receive respectful, professional service at every stage of the relationship. More information about Orion First Financial can be found at www.orionfirst.com.
Banner Bank has been a vital and growing part of the Northwest banking community since being founded in 1890. Banner is a Washington state chartered commercial bank and a subsidiary of Banner Corporation, a $4.6 billion bank holding company. Headquartered in Walla Walla, Washington, Banner began expanding its service area throughout the Pacific Northwest in the 1960s. Today, they operate 89 full service branches and 7 loan offices serving 29 counties in Washington, Oregon, and Idaho with a full range of deposit services and business, commercial real estate, construction, residential, agricultural and consumer loans. More information about Banner Bank is available at www.bannerbank.com.
#### Press Release #############################
Animated laughs (“Megamind”) and Gallic suspense (“Inspector Bellamy”) rule theaters this weekend, while DVD releases include past and future cult movies (“Dark Star,” “Scott Pilgrim vs. The World”) and the re-issue of an all-time classic (“Paths of Glory”).
Megamind (Paramount Pictures): On the heels of the year’s “Toy Story 3” comes another first-rate animated feature from the team behind the hilarious “Madagascar” movies. Taking a humorous page from the original “Superman” films, the plot follows the rivalry between two very different visitors from another planet, the dashing and handsome Metro Man (voiced by Brad Pitt) and the big-brained but comically frustrated Megamind (Will Ferrell). Becoming a bumbling villain while Metro Man grows into the world’s most beloved defender, Megamind decides to take over the city. But will the takeover consolidate his status as super-foe, or will they convince him to use his powers for good instead of evil? Featuring fast-paced laughs from a cast that also includes Jonah Hill and Tina Fey, it’s a great time for kids and parents alike.
Inspector Bellamy (IFC): Long regarded as “the French Hitchcock,” the late Claude Chabrol offers one final bit of highly civilized suspense with this tasteful whodunit. The main character is one Inspector Bellamy (Gerard Depardieu), a famous investigator who’s taking some time off from the Parisian bustle with his wife (Marie Bunel) in rural France. Of course, the seasoned detective can’t avoid puzzles for long, and in no time he’s investigating an enigmatic client (Jacques Gamblin) who insists that he’s killed a local businessman. The findings of the case alternate with Bellamy’s thorny relationship with his troubled brother (Clovis Cornillac), whose arrival in town promises to trigger even more trouble. Deftly mixing mystery and character study, Chabrol reminds viewers once more of why he was for decades cherished as a craftsman and artist.
New on DVD:
Scott Pilgrim vs. the World (Universal Pictures): Edgar Wright, the young director responsible for such fan favorites as “Shaun of the Dead” and “Hot Fuzz,” is just the right person to bring Bryan Lee O’Malley’s popular comic book to life in this crowd-pleasing action-comedy. Scott Pilgrim (Michael Cera) is a Toronto slacker in his early twenties whose time is divided between his band and his girlfriends. His life gets a sudden lift when he meets Ramona (Mary Elizabeth Winstead), a skateboard-riding hipster who steals his heart. Only trouble is, in order to reach the love of his life, Scott has to fight his way past her ex-boyfriends. Filmed with an endless array of vivid colors and breathless jokes, this is a rollicking trip into its protagonist’s video game-fueled head.
Paths of Glory (Criterion): One of the most acclaimed filmmakers of all time, Stanley Kubrick is often unfairly remembered as a chilly master of exacting compositions rather than strong emotions. The DVD rerelease of this 1957 classic, a study of men in war that just about throbs with feeling, should go a long way in dispersing that myth. Taking place in the muddy trenches of World War One, it tells the harrowing story of a trio of French soldiers who become scapegoats for corrupt officials following a crushing defeat against German forces. Trying to hang on to humanity amid the madness, Col. Dax (Kirk Douglas) sets out to defend them in court. A chilling and moving film that would make for a great double-bill with Kubrick’s other war movie, “Full Metal Jacket.”
Dark Star (VCI): Best known for classic chillers like “Halloween” and “The Thing,” director John Carpenter has actually showcased his distinctive versatility in such disparate genre as action, dark comedy, and science-fiction. His first feature was this delightfully scrappy effort, which plays like “2001: A Space Odyssey” as if restaged by clever, restless college-dorm jokers. The plot follows the interactions of four astronauts (Brian Narelle, Cal Kuniholm, Dre Pahich, and Dan O’Bannon) who, after many years stranded in a patchy space station, are still trying to figure out ways to fight boredom. Using ingenuity and humor to cover up for his low budget, Carpenter creates a trippy, funny and surprisingly thoughtful vision of people struggling to remain human and sane while surrounded by futuristic machines. A must-watch for aspiring filmmakers.
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Shelter: Blue Mountain Humane Society
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