With Optimism Eroding, Multinationals Again Reduce Growth Targets for Next 12 Months

IRTC Contingencie: Commercial Collections- Skip Trace- Reposesions-judgement served- Investigations- Asset Remarketing& No Cost Warehousing East Coast USA.Call 813-467- 4324 ask for Robert or email to Robertmbs@covad.net

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Our staff of CPA's and lease professionals can handle any or all portfolio responsibilities incl. portfolio mgmt, invoicing, sales/property/income tax, accounting, etc. Email:ngeary@edwinsigel.com

Backoffice: San Rafael, CA

We can run your back office from origination to final payoff. 30 years experience in commercial equipment lease and loan portfolio management. Email:gmartinez@phxa.com

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Backroom: All Locations

Are you a broker or a rep for a major lessor? Want to just market and leave the backroom an packaging functions to us? Call us.

Email:nationalbusinesscredit@yahoo.com

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The Week's Economic Events

January 27

MONDAY

Existing-Home Sales: December

January 28

TUESDAY

Durable Goods Orders:December

Consumer Confidence:January

New-Home Sales: December

Prices of New Homes: December

Pres. Bush State of the Union Address

January 29

WEDNESDAY

Reaction to State of Union Address

January 30

THURSDAY

Gross Domestic Product:4th Qtr.

Weekly Jobless Claims

January 31

FRIDAY

Personal Income: December

You’ve got mail cartoon

http://two.leasingnews.org/cartoons/mail.gif"

While there is a current virus making its way into headlines, it affects

large servers and not home users or mid-sized companies. It is a very

good idea to always keep your virus pattern up-to-date. While you may

have it on a scheduled run, we recommend you do it “manually.” Check

for the “up-date” pattern often.

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Irwin Financial John Nash to Retire

John Nash, 64, President of Irwin Financial, has announced his decision to retire after nearly 37 years with the Corporation, effective April 30. "John Nash has been an integral part of the leadership and tremendous growth of our company over the past 37 years," said Will Miller, Chairman.

"When John joined us in 1966, Irwin operated a single line of business from four offices in one county in south-central Indiana. In that year, we had total assets of $76 million and net income of $700 thousand. John helped lead this company beyond those borders, expanding to reach 133 offices in two countries, total assets of $4.9 billion and net income of $53 million. This is a remarkable achievement in any business career. Much of the benefit we have derived from John's personal example is now part of the fabric of our company; we will miss his influence and wish him the best."

Subsequent to Irwin Financial's Board meeting in April, it is anticipated that the following management changes will occur, effective upon Nash's retirement.

Claude Davis, 42, currently President of our commercial banking line of business, will become Senior Vice President of Irwin Financial with direct line responsibilities for the commercial banking and commercial finance lines of business. Davis has been an officer of the Corporation since 1988.

Brad Kime, 42, currently Executive Vice President (EVP) and Chief Operating Officer of the commercial banking line of business, will replace Davis as President of that line of business. Kime has been an officer of the Corporation since 1986 and the EVP of the commercial banking line of business since 1998.

Tom Washburn, Executive Vice President of Irwin Financial, will assume the oversight of Irwin Mortgage and continue to oversee Irwin Home Equity and Irwin Ventures. Will Miller, current CEO, will assume the title of President of Irwin Financial.

About Irwin Financial

Irwin Financial Corporation (www.irwinfinancial.com) is an interrelated group of specialized financial services companies organized as a bank holding company, with a history tracing to 1871. The Corporation, through its operating companies -- Irwin Mortgage Corporation, Irwin Union Bank, Irwin Home Equity Corporation, Irwin Commercial Finance, and Irwin Ventures -- provides a broad range of financial services to consumers and small businesses in selected markets in the United States and Canada.

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Irwin Financial Corporation Announces Fourth Quarter Earnings

COLUMBUS, Indiana -- -- Irwin Financial Corporation (NYSE: IFC), an interrelated group of specialized financial services companies focusing on mortgage banking, small business lending, and home equity lending,announced net income for the fourth quarter of 2002 of $27.2 million or $0.92 per diluted share, a quarterly record. This compares with net income of $12.1 million or $0.53 per diluted share during the same period in 2001, an increase in earnings per share of 74 percent. Net income for the entire year of 2002 totaled $53.3 million or $1.89 per share, compared to $45.5 million or $2.00 per share during 2001. Earnings per share for the year declined due to common stock issuance early in 2002.

"We are very pleased with our results in 2002. Despite difficult economic conditions and volatility in financial markets, as well as the accounting transition we are making in our home equity lending line of business, we produced very strong financial results this year and built the base for continued growth," said Will Miller, Chairman and CEO of Irwin Financial. "While our mortgage banking results stand out, we exceeded our original plans in commercial banking and home equity lending as well. Given the momentum we have developed in those businesses, as well as our improvement in credit quality in commercial finance and the positioning of our mortgage servicing portfolio, we currently believe 2003 earnings will be in the range of $1.90 to $2.10 per share."

Financial highlights included:

$ in millions, except EPS

4Q 4Q Percent YTD YTD Percent

2002 2001 Change 2002 2001 Change

Total Consolidated

Net Revenues $151 $118 29% $427 $401 7%

Net Income:

Mortgage Banking 17.0 12.8 33 44.5 38.1 17

Commercial Banking 4.7 3.0 57 16.1 8.9 80

Home Equity Lending 8.0 5.6 44 1.0 16.2 -94

Commercial Finance 0.1 -1.0 NM -0.1 -2.9 98

Venture Capital 0.0 -3.4 NM -2.5 -6.5 62

Parent and Other -2.6 -4.9 47 -5.7 -8.3 30

Total Consolidated

Net Income 27.2 12.1 125 53.3 45.5 17

Earning per Share

(diluted) 0.92 0.53 74 1.89 2.00 -6

Return on Average

Equity 30.9% 21.0% 16.7% 21.8%

Credit Trends

Credit costs generally stabilized in each of our consumer and commercial credit-sensitive portfolios. Charge-offs declined in each of the portfolios. Thirty-day and greater delinquencies were flat in our two commercial portfolios, but rose in our consumer portfolio due principally to portfolio sales. Our consolidated credit provision totaled $8.6 million, a $7.0 million or 45 percent decrease compared with the third quarter of 2002. Our provision totaled $44.0 million for the entire year, a 151 percent increase over that recorded in 2001.

The ratio of charge-offs to average loans and leases, and the allowance for loans and lease losses to total loans and leases for our principal credit-related portfolios are shown below.

Commercial Home Equity Commercial

Loans Lending(1) Finance

Annualized Charge-offs

* 4Q02 0.21% 2.83% 1.64%

* 3Q02 0.33 3.01 2.48

* 4Q01 0.29 1.95 2.68

Allowance to Loans and Leases

* December 31, 2002 1.14% 5.80% 2.21%

* September 30, 2002 1.06 6.89 2.22

* December 31, 2001 0.97 6.70 1.73

(1) The figures for home equity lending reflect both on- and off-balance

sheet (securitized with credit risk retained) portfolios.

Line of Business Results

Mortgage Banking

Net income at our mortgage banking line of business totaled $17.0 million in the fourth quarter of 2002, an increase of $4.2 million or 33 percent compared with the year earlier period. The year-over-year increase was largely attributable to strong loan originations, the result of favorable interest rate conditions and branch expansion. For the entire year of 2002, the mortgage banking line of business earned $44.5 million, a $6.4 million or 17 percent increase.

Mortgage loan originations totaled $4.6 billion during the fourth quarter, a year-over-year increase of $1.7 billion or 60 percent and an increase of $1.5 billion compared with the third quarter of 2002. Refinanced loans accounted for 73 percent of fourth quarter production, compared with 64 percent in the year earlier period. Loans for the purchase of homes increased $0.2 billion or 23 percent year-over-year. During the fourth quarter, our new correspondent unit contributed approximately $0.14 billion of originations. As announced in August 2002, we have added this new production platform to complement our existing retail and wholesale channels and have staffed it with senior managers with extensive experience in correspondent lending. The correspondent unit began production in early October and we anticipate it will be a meaningful contributor to our production and net interest income in 2003.

Our first mortgage servicing portfolio totaled $16.8 billion as of December 31, 2002, a year-over-year increase of 30 percent, reflecting strong production. The balance sheet carrying value of our first mortgage servicing portfolio totaled $146.4 million as of December 31, 2002, or 0.87 percent of the underlying loan balance, reflecting our weighted average servicing fee of 0.37 percent.

During the quarter, we recorded impairment on our servicing asset, net of derivative gains, of $12.2 million, compared with net impairment of $7.4 million a year earlier. The net impairment reflects a decline in mortgage interest rates during the quarter. We sold $0.9 billion of high coupon, high delinquency servicing rights that contributed to our $4.9 million pre-tax gain on sale during the fourth quarter.

Commercial Banking

Our commercial banking line of business earned $4.7 million in the fourth quarter of 2002, an increase of $1.7 million or 57 percent compared with a year earlier and a $1.2 million increase over the third quarter of 2002. The increase in net income largely reflects year-over-year growth of $3.7 million or 25 percent in net interest income. Net income for the year totaled $16.1 million, a $7.2 million or 80 percent annual increase.

The commercial banking loan portfolio of $1.8 billion at December 31 increased $0.3 billion, or 20 percent year-over-year, although only 2 percent over the third quarter of 2002, reflecting slowing loan demand. The net interest margin for the line of business in the fourth quarter of 2002 was 3.91 percent, compared with 3.77 percent during the fourth quarter of 2001 and 3.98 percent during the third quarter. Core deposits totaled $1.5 billion as of December 31, 2002, an annual increase of 34 percent. Average core deposits during the fourth quarter were 15 percent greater than in the third quarter of 2002.

Included in fourth quarter net income was $2.7 million in provision for loan and lease losses, a year-over-year decrease of $0.8 million, reflecting stabilizing credit quality. Net charge-offs totaled $1.0 million during the fourth quarter of 2002 or 0.21 percent of average loans on an annualized basis, down from 0.33 percent during the third quarter of 2002. Net charge-offs totaled 0.22 percent for the year, up from 0.19 percent in 2001, but still well below peer averages. Loan loss reserves to loans totaled 1.14 percent as of December 31, 2002, compared with 1.06 percent at the end of the third quarter.

Home Equity Lending

Our home equity lending business earned $8.0 million during the fourth quarter of 2002, a $2.4 million increase as compared to the fourth quarter of 2001, and a $7.6 million increase compared with the third quarter of 2002. The fourth quarter 2002 results compared to the previous year include a decline of $8.2 million from gains on loan sales and an increase of $2.2 million in loan loss provision that were offset by a $15.6 million increase in net interest income. Net income for 2002 totaled $1.0 million, compared with $16.2 million a year earlier, reflecting our transition off gain-on-sale treatment of our securitization fundings.

Loan origination volumes for the fourth quarter totaled $262.0 million, a 24 percent year-over-year decrease compared with originations of $346.9 million a year earlier. We sold $245.0 million of whole loans during the quarter for a net gain on sale of $12.6 million. We retained servicing rights, including rights to prepayment penalties, on the underlying loans. For the entire year, we sold $615.5 million of loans or approximately 58 percent of our annual production of $1.1 billion. Over time, we anticipate we will balance loan sales with portfolio development in a similar manner. Our managed home equity portfolio totaled $1.8 billion at quarter-end, compared with $2.1 billion a year earlier, an 11 percent decrease. Capitalized residual assets totaled $157.1 million as of December 31, 2002, compared with $199.1 million a year earlier. During the quarter, we recognized $3.4 million of residual impairment charges principally due to increases in prepayment speeds. Credit performance during the quarter met our modeled assumptions.

During the fourth quarter we put into place modified credit policies that we believe will have the effect of raising the overall credit profile of our home equity customers. We believe these changes, which were first reflected in production late in the quarter, may result in improved credit performance and less volatility in our results, although over time we are likely to have a lower gross yield on our portfolio. These changes may substantially increase the size of the potential market for our products, although this market is more competitive. We anticipate that overall risk-adjusted returns will improve as a result of these changes.

Thirty-day and greater delinquencies on our managed portfolio as of December 31, 2002, were 6.01 percent, up from 5.01 percent at September 30. This quarterly increase in delinquencies largely reflects the effect of selling a large percentage of current production, all of which had no delinquencies, as well as continued seasoning and seasonality. Total managed portfolio delinquencies increased $8.8 million during the quarter, compared with an increase of $4.7 million during the third quarter. Net charge-offs totaled 2.83 percent of our average managed portfolio during the fourth quarter, down from an annualized rate of 3.01 percent during the third quarter. In total, reflecting both our on-balance sheet allowance for loan losses and reserves embedded in the valuation of our residuals, we have a total reserve for loan losses of 5.80 percent of our managed loans.

Commercial Finance

Our commercial finance line of business, which includes broker- and vendor-based small ticket leasing and franchise finance loans, earned $0.1 million during the fourth quarter, compared to a loss of $1.0 million during the same period in 2001 and a loss of $0.7 million in the third quarter. The line of business lost $0.1 million for the year, compared with a loss of $2.9 million in 2001.

The improvement in sequential quarter results largely reflects reduced credit costs for our broker-based, small ticket portion of our commercial finance portfolio. Lease and loan fundings totaled $62.8 million in the fourth quarter compared to $58.4 million in the third quarter and $46.4 million a year ago. The equipment lease and loan portfolio totaled $345.8 million at December 31, 2002, an $81.0 million or 30.6 percent annual increase. Our allowance for loan and lease loss totaled $7.7 million, or 2.21 percent of outstanding loans and leases.

Venture Capital

Irwin Ventures earned $48 thousand during the fourth quarter, compared with a loss of $3.4 million a year earlier. We made follow-on investments in two portfolio companies during the fourth quarter. The company's investment portfolio had a $4.5 million carrying value as of December 31, 2002, or less than 1 percent of consolidated Tier 1 capital.

Balance Sheet

Our consolidated assets totaled $4.9 billion as of December 31, 2002, a $0.6 billion increase from September 30, principally reflecting a $0.5 billion increase in mortgage loans held for sale. Our loan and lease portfolio totaled $2.8 billion as of December 31, 2002, and mortgage loans held for sale totaled $1.3 billion.

Nonperforming assets (including other real estate owned of $5.3 million) were $36.4 million or 0.75 percent of total assets as of December 31, 2002, up from $23.5 million or 0.68 percent of total assets a year earlier and up from $33.3 million but down from 0.79 percent of total assets as of September 30, 2002. The year-over-year increase is principally a result of increases in nonperforming assets in our commercial banking line of business, although nonperforming commercial banking assets were less than 1 percent higher than third quarter levels. Our on-balance sheet allowance for loan and lease losses totaled $50.9 million as of December 31, 2002, compared with $22.3 million a year earlier, reflecting on-balance sheet portfolio loan growth, economic conditions, and the increase in nonperforming assets. The ratio of on-balance sheet allowance for loan and lease losses to nonperforming loans and leases totaled 164 percent at year-end, compared to 173 percent at the end of the third quarter.

We had $360.6 million or $12.98 per share in common shareholders' equity as of December 31, 2002, a year-over-year per share increase of 20 percent. The Corporation's Tier 1 Leverage Ratio and Total Risk-based Capital Ratio were 9.7 percent and 13.2 percent, respectively, as of December 31, 2002, compared with 10.2 percent and 13.5 percent respectively, at the end of the third quarter 2002. These compare to "well-capitalized" regulatory standards of 5.0 percent and 10.0 percent, respectively.

In October 2002, we sold $34 million of 8.7 percent trust preferred securities. These securities qualified immediately as Tier 2 regulatory capital and are eligible for inclusion in Tier 1 capital. These securities are callable at par beginning in September 2007 and mature in September 2032.

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Sunrise International Leasing Names John Barry New Vice President of Sales, Marketing and Business

GOLDEN VALLEY, Minn.-- Sunrise International Leasing Corporation, a wholly owned subsidiary of privately held King Capital Corp., last week announced that John Barry has joined the firm as Vice President of Sales, Marketing and Business Development. He will be responsible for implementing the company's strategy to expand its sales and marketing activities, and to purchase portfolios of leased equipment and leasing companies that fit Sunrise's business model.

"We're pleased to welcome John to the Sunrise management team," said Peter King, Sunrise CEO. "John's addition will accelerate the company's efforts to expand its business through acquisitions, as well as by acquiring new vendors."

Mr. Barry was most recently with Heller Financial, Inc., a division of GE Capital Corporation, where he was Managing Director of Strategic Development for Global Vendor Finance. Prior to that he held a number of sales and marketing positions with Dana Commercial Credit Corporation.

About Sunrise International Leasing Corp.

SILC's business consists primarily of the development of market-oriented vendor programs emphasizing the formulation of customized lease and rental programs for vendors of high technology and other equipment as well as software. Sunrise is also a major reseller of high quality off lease used equipment through Redirect Tech, its remarketing subsidiary.

About King Capital Corp.

King Capital Corporation, established in 1975 and based in Golden Valley, Minn., offers a wide range of leasing options to manufacturers, distributors and resellers through its primary subsidiary, Sunrise International Leasing Corporation and high availability software through H.A. Technical Solutions, LLC.

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We Get Letters

I got quite a few chuckles reading your Super Bowl rumors on Friday. I

think you're right on with a number of them. However, have you ever heard me

sing? That's the funny part. Aren't the Cowboys, as America's Team, always

in every Super Bowl at heart? Well, maybe not this year but wait till next

year as the Big Tuna is in town and in charge! Thanks for the smiles.

Jim Lahti jrl@acsitx.com

(You are absolutely right, your team is always in your heart. Kit )

---

I really liked the Super Bowl top ten.

Ginny Young

ginnyyoung@bravacapital.com

Thank you for adding me to your mailing list. I had the pleasure of working

with Mark Speros at Granite Financial in Colorado. I was in the Lease

Funding Dept. and he headed up the Credit Dept.

While I am not in the leasing industry now, I want to return to the industry

and am actively looking here in south central PA and in the Philly suburbs.

That is why I asked to be added to your mailing list - I need to stay

updated and feel your newsletter is a good way to do so.

Thanks again!

Christina McGrath cmcgrath@primarystaffing.com

I understand that you have received at least one irate e-mail

regarding the biography you published yesterday. You readers should

understand that the biography was written at your request (to accompany

the Picture From The Past), but that the actual biography was written by

yours truly, the subject of the bio, as a "tongue-in-cheek" spoof of the

usual self-serving biography.

As those who really know me can attest, when give the option of being

serious or humorous I will always opt for what I hope will be humorous.

MARK H. SPEROS, Director

Broker Division

mark@lfcinc.com

(I thought what you wrote was quite witty and funny, and have no problem

taking credit for it. The truth is we don’t write any of the descriptions, they

come from the source. Most times they are from a company or position

in the past. It is also true, we asked you specifically for a new picture

and to write about what you were doing now.