Michael G. Coon VP, Equipment Leasing Division, TAB Bank

Over the summer, TAB Bank expanded its offerings by officially launching an Equipment Leasing Division as part of its Lender Solutions Division. In conjunction with the launch, the company hired Michael G. Coon as vice president of Equipment Leasing.

The new unit, Coon says, was the next step for the company that was already financing some equipment finance transactions. “TAB Bank is a well capitalized bank with a financially strong parent. We have been lending to specialty finance companies for a while and working with leasing companies is a natural fit for TAB’s commercial lending portfolio.”

Although it may take more time for equipment demand to return to pre-recessionary levels, the company started the unit not only to prepare for an improved economy but also because all the right pieces seemed to come together at the right time. “Although we at TAB Bank cannot control the health of the world economy, we can control our efforts to prepare for improved economic cycles,” Coon explains. “By developing our products and our relationships now, we believe TAB Bank will be in an excellent position to capitalize on an inevitable economic rebound.”

With TAB Bank’s strong financial background and its success in other areas of commercial finance, especially asset-based lending, it was the natural progression to turn to equipment leasing. “They had some interest in equipment leasing and had done a little of it, and it probably took off when they were introduced to Orion First Financial and myself earlier this summer,” Coon says. “We were starting to do some actual transactions that were fairly decent sized and that only got the juices flowing for them and that’s when they started to get busy.”

At that time, Coon showed interest in joining TAB to begin putting together the new department. The company also had the opportunity to hire Mark Myers, the new vice president of lease underwriting who came to TAB after working at JP Morgan Chase Bank, Key Equipment Finance, Banc One Leasing — now Chase Equipment Finance, and GTE Leasing. With the addition of Myers, both he and Coon will “be working together to provide attractive leasing solutions to our customers and grow the leasing portfolio for the bank,” Coon notes.

“So a lot of things came together,” Coon says. But that doesn’t mean the company launched the division saying the industry is on the brink of a full turnaround. “I don’t think we’re trying to say we think the economy has bounced back. None of us independently can control the market or control the economy, we just can’t. But what we can do is take care of our own households, our own selves and do things that position our business into a solid property to take advantage of when things do come back. The good news is, for TAB, is there’s not a lot of people in the market right now doing what we do. We do think we’re going to look at a lot of deals, we already have, just because there’s not a ton of competition, but that changes over time too.”

He adds, “We have the capital, we have the blessings from the regulators … we have a couple of key guys that had experience in the business. It really is a culmination of several things. We’re going to spend the next weeks and probably the next few months getting the program in order, getting our customers in line and then really go to market probably the first of the year. But we definitely want to put on volume between now and the end of the year.”

And the equipment leasing sector was the right fit for the company and for Coon. “One thing I’ve always said about this business, equipment finance, is that it’s not something that’s going to be at some point obsolete. I think it’s the foundation of the American economy. When you talk about business investment in capital equipment, this is it. We are a conduit to make that happen, we are a player in the U.S. economy. It’s investment in capital equipment, in buildings, in people. I just think equipment leasing is not a fad… Personally, I’ve been proud of the work I do. Being involved in this industry, it’s satisfying in that respect.”

Coon has spent more than 20 years in the leasing industry. After graduating with a Bachelor’s of Science, with an emphasis on business, from Central Michigan University, he went to First Michigan Bank, then co-founded Enterprise Capital as executive vice president. That eventually became Enterprise Funding Group, a small-ticket funding source. In 2009, he left Enterprise to join Orion First Financial as vice president, sales and business development, where he aided the company in developing new products, sales channels and additional funding for its small-ticket funding subsidiary. It was at Orion that he first became involved in working with TAB Bank, and started partnering with the company on several projects.

“The Leasing VP position was eventually created, and I was attracted to their sales-oriented culture, top down commitment to the equipment leasing space and strong financial position of the bank and its parent. TAB Bank is a national industrial bank headquartered in Utah. According to Coon, the bank was established by Flying J (n/k/a FJ Management) to meet the needs of the transportation industry through asset-based lending, equipment finance and specific deposit products. TAB has approximately 225 employees with an operations center based in Ogden, UT, and a dozen salespeople in the asset-based lending sales capacity in offices around the country. Since inception, the bank has significantly expanded its non-transportation portfolio, Coon says, and equipment leasing is a natural extension of that. Coon notes that while the Lender Solutions Division has been running for over a year, the equipment leasing unit is still quite new.

But it was the culture that attracted Coon to his new opportunity. “The company has a relatively flat organizational chart and the bank president, Jeff Bell, is committed to the leasing space. The management team is comprised of experienced and bright individuals that are eager to build the leasing division. I feel fortunate to have been invited to be a part of this group.”

TAB’s Leasing Division boasts three offerings in its product suite, Coon says. These include: individual lease transactions from $250,000 to $3 million, lender finance and syndication services. He notes, “The individual leases are sourced by select lease originators and can be brokered or discounted to TAB. Lender finance is focused on providing warehouse lines and funding facilities to qualifying lessors. We are also interested in entertaining syndication opportunities with other banks and leasing companies.”

He adds, “Primarily, we seek to be the capital partner for ‘best-in-class’ leasing companies and support them in the relationships they have with their customers. There isn’t an oversupply of lenders in this space so we feel the marketplace is ripe for our type of offerings.”

As far as what the division is looking for in a potential customer, Coon says, like the bank’s other commercial lending portfolios, the leasing division will have a national scope of business activity with a deal size target between $250,000 to $3 million. “We do not have a rigid profile of the borrower/lessee client as we do with the originator of the loan/lease. We are generally open to most industries and equipment; however we prefer income producing assets for traditional, proven industries. We have a focus on companies with adequate cash flow, liquidity and demonstrated success in their field.”

While many equipment leasing and financing companies have moved away from using the broker community in sourcing new opportunities, TAB’s Leasing Division will capitalize on this source of finding new customers to establish and increase its portfolio, and the response so far has been strong. “We had expected the response to be quite strong amongst the broker community and so far it has been just that. TAB Bank’s leasing division has a very focused business plan, and we likely won’t be everything to everybody. For example, we do not expect to have a small-ticket operation any time in the near future, which certainly excludes a lot of brokers that serve that market. We are also focusing our efforts on proven, long-lasting relationships that both Mark Myers and I can bring to TAB Bank.

“My advice to perspective brokers is that they bring a high level of professionalism and sense of partnership to the TAB relationship. Our brokers tend to have a strong knowledge of their client and their client’s needs, the ability to package and structure quality deals and an interest in protecting the bank’s interests as well as their own.”

For Coon, though, this new opportunity brings much excitement and anticipation of what it can become in the near future. “I am genuinely excited to be at TAB Bank and leading the growth of the leasing division. This is a great opportunity not only for me, but numerous industry participants and small- to medium-sized businesses nationwide. We want to be an active participant in our nation’s recovery. With the financial strength of the bank and its parent, along with experienced leadership, we believe we can accomplish that goal.”

Amanda L. Gutshall is associate editor of the Monitor.