U.S. Bank Manifest - Top Small Ticket Funder

U.S. Bancorp (USB) reported net income of $471 million for the second quarter of 2009, which include the redemption of TARP, with a record net revenue of $4.2 billion. In addition, the bank was aggressive in purchasing bank branches from FDIC bank failings, such as the 213 branches of Downey Savings and Loan Association, F.A., Newport Beach, CA, and PFF Bank & Trust, Pomona in late November, 2008, but costs coming in 2009. The FDIC and U.S. Bank entered into a loss share transaction. U.S. Bank will assume the first $1.6 billion of losses on the asset pools covered under the loss share agreement, equal to the net asset position at close.

U.S. Bank is considered more of a consumer bank, but its wholesale side is growing.

Highlights included strong average loan growth of 12.8 percent (5.3 percent excluding acquisitions) over the second quarter of 2008, driven by average retail loan growth of 11.1 percent, led by credit card balances, home equity lines and student loans. New lending activity during the second quarter included:

• $8.9 billion of new commercial and commercial real estate commitments
• $16.6 billion of commercial and commercial real estate commitment renewals
• $2.5 billion of lines related to new credit card accounts
• $4.1 billion of other retail originations

U.S. Bank Manifest business is up compared to the second quarter of 2008.

According to the U.S.. Bank Second Quarter Earnings release, U.S. Bank Manifest saw its revenue decline 1.1% from the previous quarter, but up 5.1% from the Second Quarter of 2008, as well as year to date $449 million higher than the previous year. In this leasing economy, it demonstrates U.S. Bank Manifest remains aggressive, especially with the Pentech Navigator program closed down the first of the year.

Credit losses seem to have leveled off, although higher than the previous year. Most likely the $59 million judgment regarding Christopher Rural Health Planning (CRHPC) software is a factor. The case is on appeal at this time. The suit stemmed from CRHPC's software systems that it leased to obtain electronic medical records and patient data and concerns "warranty" issues.

There were some "re-alignment" in management, and recently tightening of transactions from other leasing companies. Reportedly a New England major lessor was cut off for reaching a 9% delinquency rate, forcing them to buy back some of the deal. An informed source told Leasing News it primarily is with franchise business, particularly Subway Sandwich where they were doing $75,000 start-ups, now allegedly choking in them.

Without the Pentech Navigator program, U.S. Bank Manifest is experiencing what many others have experienced over the last year with many new brokers entering the market place, sending to established brokers hard up their business to submit. The processing has been affected as well as the ratio of deals approved to deals signed. Reportedly, Manifest cut up to 60% of their brokers, who did not have 70% approval ratio, 60% fund ratio, and acceptable (less than 3%) delinquency on the books with them. Their credit window was reportedly moved from a 670 fair Isaac to a minimum 710, and implemented other equipment decisions. Of course, with less funders now accepting broker business, Manifest was in the position to make these changes as many others did including LEAF and the rest got out of the indirect business.

It should be pointed out that among the funders U.S. Manifest has the most private label programs from $99 for the first three months, skip payments, quarterly, annual, and a host of deferred and special payment schedules. In addition, brokers who leave the program or semi-retire, U.S. Bank Manifest has never contacted their customers or vendors, in fact, for active brokers, if a client calls into for a new lease, it is referred to the broker right away. U.S. Bank Manifest has many sales support and other programs, plus encourages visits to their offices in Minnesota, as well as visits brokers offices throughout the United States (not many funders continue this practice today.)

• U.S. Bank Press Release with financial information
• U..S Bank Manifest contacts

Disclosure: No Positions