BMO Harris Equipment Finance Company

by Amanda L. Gutshall July 2012
Combining banks, their employees, operations, potential philosophies and overlying geographic territories can be a daunting task. But with the merger of BMO Financial Group, Harris Bank and M&I Bank, the process proved less formidable due to a common cultural standard and low geographic overlap.


In December 2010, BMO Financial Group announced its intention to acquire Marshall & Ilsley (M&I) Bank for $4.1 billion, and merge it with Harris Bank, which BMO acquired in 1984. The M&I acquisition closed in July 2011, and as a result, BMO rebranded the U.S. bank as BMO Harris Bank. M&I Equipment Finance Company was also renamed BMO Harris Equipment Finance Company (BHEFC), and is based in Milwaukee, WI.

In connection with the merger, Judson (Jud) Snyder, was named president of BHEFC. Snyder has been with M&I for his whole career working at the bank in Madison, WI in the commercial credit and underwriting group after graduating from the University of Wisconsin-Madison in 1994 with a B.A. in Economics and Russian. He then spent the next few years in business and commercial credit before moving into the equipment finance unit, where he has stayed for the last 14 years. In this division, he served in various roles most recently as national sales manager and the last three years as president.

When asked what was the appeal of staying with the same company for almost two decades, Snyder is quick with his enthusiasm for the company and its philosophy, adding that M&I and BMO Harris share a very similar culture that is first and foremost “friendly” as well as “pro-business but also pro-employee. The equipment finance company here, although very well integrated with the bank, has an almost small business and family feel to it as well and it enables us to be very employee friendly and relatively nimble with our clients.”

And it’s this customer and employee-centered philosophy that made the transition easier to implement than one would think when combining two banks, one in the U.S. and one in Canada. “The beautiful part of the merger was very similar cultures, very similar customer-centric ideas and customer focus… That was a big part for many of us, just how comfortable and how easy this merger has gone so far… We felt we had this great complimentary culture and the organization has made us come together pretty quickly and pretty strongly.”

He distinguishes the lack of geographical territory overlap as one of the easier aspects of the merger as “there weren’t many cases where we bumped into each other… The equipment finance business is a national business for BMO Harris and the merger has been powerful for us. Neither BMO in Canada nor Harris Bank in the U.S. had an existing equipment finance business and they were very interested in acquiring and growing one. From the first days of the acquisition, they were very vocal about the opportunity that our business from M&I brought to the broader organization. Our team within equipment finance has been given this great opportunity to grow our business across a much broader customer base … and we now have the strength and liquidity behind us with the much larger organization to build the business from a national level.”

The strength of BMO Financial Group, Snyder says, allows the overall company and especially the equipment finance group to leverage relationships in a number of different ways. “One of the first things that comes to mind is that as a Canadian bank, and as a well run and conservative bank, they came thought the crisis very well. They’re in a position, and because of that, we are in a position where we’re lending actively, we’re supporting commercial customers with credit as they’re trying to grow their business and invest.”

The second competitive advantage that Snyder relates is that customers seem to want to do business with an established bank. “So they look to us, they see the strength that BMO Financial Group brings and they’re not concerned about whether their banking partner is going to be there. That’s really helped us in our prospecting as we bring on new clients.” This strength for the equipment finance unit is that it’s seen as an integral part of the bank with a “commitment to helping companies invest in capital equipment. So that helps us have a role in business-led economic recovery and we’re kind of promoting a U.S. business-led economy. That’s very important — it’s part of the business that we take very seriously.”

With the completion of the merger last year, BMO Harris Equipment Finance ranks 53 (up from 56 last year as M&I Equipment Finance) in this year’s Monitor 100 with $572.2 million in assets and $219.1 million in new business volume. The company forecasts a more than 50% increase in year-over-year new business volume in 2012, as well as an increase in staffing.

Snyder notes three aspects that will enable the company’s growth plans in 2012 and beyond, the first being continued success with established customers. “Our business model is relationship driven as opposed to being purely transactional.” He adds, “BMO Harris Bank as a whole has a great customer base and one of the differentiators for our bank is that we combine sector expertise … with local delivery with commercial banks in our regions. So by having both the specialty business lines and the local delivery, our bankers are able to leverage that into better cross-sell opportunities and joint prospecting with our bank staff.”

Another driver of the company’s growth, Snyder explains, are the increasing opportunities within the large corporate space. BHEFC is in the process of building and hiring a team there that will have specialists in energy and corporate aircraft as well as generalists focusing on larger corporate plans. “The great thing about this is that this space fits really well with where our BMO Capital Markets and investment bankers are,” Snyder says.

The third area of growth is a result of a resurgence in the capital markets within equipment finance over the past year, he says. “Indirect business is an important component for us, not just for our business, but we think, for the industry as a whole. When you think about capital markets, it’s syndication, and we think that allows us to participate in transactions that we wouldn’t have otherwise called on. By doing that, it builds a network for us where we can bring in participants of our own on our own transactions to help us manage credit exposure and drive the income.”

Along with the growth Snyder predicts for the company, he also sees a gradual recovery for the industry as a whole. “From our standpoint, the outlook looks pretty bright for the rest of 2012 and beyond. I’m cautiously optimistic about the recovery. I don’t think we’ll see a huge booming recovery later this year, but I think we’ll continue to see the slow, steady investment in capital equipment.”

He points to sectors such as transportation, energy and healthcare that, for the most part, are back, spending and providing a lift through origination for many companies in the industry. “The area that we’re hopeful will build throughout the rest of this year … is the general manufacturing sectors. Those seem to be warm, but not hot, and we’re hopeful we’re going to see a better recovery in those as the rest of the economy recovers.”

Reflecting on the greatest challenge for the industry, Snyder notes the “lengthy” discussion surrounding IASB and FASB accounting convergence. He explains, “The initial exposure drafts that were circulated in 2010 really had the potential to cause damage to our industry and to our customers due to the severe changes in expense recognition and the front-loading of lease payments and income statements. But I think the good news there is that it seems to be due in part to the strong campaigning by the ELFA and other trade associations that the boards have gone back and are reconsidering some of those changes. I think the greatest challenge for us in the near future will be seeing what the final determination of those accounting standard changes are and then training our teams to react and sell within a different set of accounting rules.”

And this challenge of new accounting rules will present an even greater opportunity, Snyder says, for the company. “As those changes are finalized, those of us who have really strong customer focus and good relationships with our clients will have an opportunity … to bring value to our clients by providing counsel to them and helping explain the new standards. That really fits with our approach.”

With regard to the evolving regulatory environment, Snyder says that while there are discussions about the impact on the bank as a whole, he doesn’t see a significant one on the equipment finance business. Instead, the bigger issue that is “looming for the industry is the likelihood of comprehensive tax reform. It’s going to be critical for equipment finance companies within our industry to work together to educate legislators about the value of the industry and the importance of incentives on capital equipment purchases, both appreciation and tax credits, and how those impact job creation and economic recovery.”

All in all, Snyder foresees a bright future ahead for BMO Harris Equipment Finance. “We feel as though the merger and our integration into BMO Harris Bank has brought us a broad world of new opportunity… We’re excited about what the future holds and think that we’re going to have a chance to build something really special here over the next few years.”

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