F.N.B. Equipment Finance has worked hard to create a bigger and better equipment finance group. The effort is paying dividends, including a spot in the Monitor 100. As his group enters the rankings for the first time, President and CEO Gary Cook is well aware that future proofing is the key to making sure the company returns next year.
Getting into the Monitor 100 is not an easy task. Even though there are 100 spots on the list, far more equipment finance operations are out there. Many companies that do not make the list have experienced teams, strong leadership and a successful track record, much like F.N.B. Equipment Finance, which broke into the rankings this year for the first time.
F.N.B. made the cut based on its continued expansion in recent years and its dedication to improving both its vendor and commercial equipment finance businesses. By bulking up both arms before the beginning of 2017, F.N.B. was set up to succeed last year, and succeed it did. With $439 million in net assets, F.N.B. vaulted from unranked to the No. 72 spot in the ranking. The company also increased new business volume to $273 million and added depth to its staff. All this success sprang from humble beginnings for the group, which came to F.N.B. in 2008 as a “relatively small organization,” according to Gary Cook, president and CEO of F.N.B. Equipment Finance. Even when it was on the smaller side, F.N.B. found ways to excel, which has continued as it has grown.
“Given the opportunity with F.N.B. we were able to expand the portfolio, and we have expanded the portfolio every year,” Cook says. “We haven’t had one year since being acquired by F.N.B. that we haven’t either hit our goal or surpassed it.”
The organization grew by quite a bit at the end of 2016 when it added Tim Evans to lead its commercial bank equipment finance division. Adding to the arsenal was a major reason F.N.B. broke through to join the Monitor 100 ranks, with Cook contributing 44% ($120 million) in 2017 of the new growth to Evans’ division.
“This is the second year that we have had Tim Evans’ group in place. He’s the director of commercial bank equipment finance. The other portion is director of the vendor finance group Donna Yanuzzi who has been with us for 21 years,” Cook says. “We started to put emphasis on the bank commercial equipment finance product line to be able to bring in those deals [where] we felt we were missing opportunities.”
Evans’ addition also helped F.N.B. reach out to customers it was unable to serve previously while providing what Cook calls “true leases.” This addition helped complement the vendor business, which served as the primary source of equipment portfolio growth by F.N.B since 2008.
“On the equipment side with the vendor product, we go beyond the F.N.B. bank footprint, especially because you can’t just tell a vendor you only want to do business in your own footprint,” Cook says, adding this would be a recipe for a missed application.
In addition to looking outward, F.N.B. has taken an inward view, focusing more on the bank than in past years by using internal client relationships, which Cook tags as the “best vehicle” to increase the portfolio.
Speaking of looking inward, Cook credits the experience of the professionals around him for helping to create a stable product.
“We have very successful sales people that [have] been with us for over 10 years and I think the longest one is almost 20 now,” Cook says. “We have a lot of people on our operations side that have been with us from five to 10 years.”
Along with F.N.B.’s expertise is the product offering itself, which Cook not only champions but believes is a major success driver. Experience helps, to be sure, but developing relationships eventually need to be based on a product which meets customer needs. This will bring people to you, Cook says.
No Standing Still
The experience F.N.B. has and its current product offering has not forced Cook and company into being constricted to old practices. There is still room for the addition of new perspectives and expansion of the team itself.
Cook is also particularly focused on improving the operations side of the business to overcome the challenge of stagnation.
“You can’t stand still in our business,” Cook says, adding he believes equipment leasing will only grow in its attractiveness in the years to come, especially in the wake of the new tax law. He also points to emerging technologies and the need to keep updated software and technology platforms as a major point of focus for F.N.B. as it continues to scale upward.
“We really try not to touch a lot of paper except for some existing contracts,” Cook says. “We have been increasing our business by turning to electronic contracts. Right now, it has done very well for us on our vendor product line of business. We see electronic contracts as a major key to expansion of our vendor business.”
On the bank side, where more paper comes and goes, opportunities to improve and become more technologically efficient also exist.
“A lot of deals we see there [are] a little more custom because contracts are sent to the customers and the customers send it to their attorneys, and the attorney takes a look at it and makes the revisions,” Cook says. “But we just see some areas where we can really make strides from the electronic standpoint. The future of our business is to preserve our current clientele while taking steps to attract new customers with product efficiency and innovation.”
Staying up to date on new technologies goes hand-in-hand with F.N.B.’s willingness to diversify and maintain an ability to be an attractive business partner to customers. Cook considers his group “generalists,” even though a significant portion of its recent growth originated in the transportation sector. Manufacturing has also been critical, and F.N.B. has been able to pivot to other verticals as well.
Setting its sights on the capital markets, F.N.B. made a major move by hiring D. Bryant Mitchell as EVP of its Capital
Markets and Specialty Finance Businesses in January. While any results Mitchell has produced won’t show up in this year’s Monitor 100, they are sure to make an appearance next year.
“He’s been a very big plus for us because he comes from that environment where there are larger institutions where he sees different product lines and where they can go,” Cook says. “He’s involved directly with the lease financing as part of the bank and he’s given us very good direction on how to overcome obstacles that generally you need a learning curve for.”
A Stable Product
Success, which isn’t new for F.N.B., has continued in 2018. Cook says the company is already surpassing its budget and expects to beat its projections for new business volume and net assets, which were already targeted for 12% and 9% growth, respectively. This continues a pattern, with Cook noting the company has exceeded its budgeted numbers each and every year since becoming part of F.N.B. Maintaining positive momentum can be tricky, but Cook has strategies to accomplish this goal.
“We plan to expand not only our vendor business, but we also plan to expand our internal bank base because we are hiring a couple more sales people on the bank side and secondly because the demand is there,” Cook says.
As for dealing with competition, while F.N.B. is backed by a bank, it still has the strengths of a tight-knit organization, which Cook leans on.
“Competition is always going to be there,” Cook says. “We are in a very good position because I’m two steps away from the chairman of the board, so it’s easy for us to be able to adjust.”
Ultimately, a mix of the old and the new will keep F.N.B. going, with the most important aspect being a stable product.
“We’re diligent when we look at our product line. We make sure we’re looking at the marketplace and that our sales people have all the tools they need to be able to do their job,” Cook says. He adds that interpersonal skills are still a must. “Although it’s a sales person that makes that sale, it comes down to having a good product, a stable product.”
While some assets depreciate, others do not. Tom Toton of Corcentric (formerly AmeriQuest Business Services) explains why it makes more sense to add to your sales team and become asset light rather than putting equity into depreciable assets.
David G. Mayer, who is a partner in the global Aviation Practice Group at Shackelford, Bowen, McKinley & Norton, explains how an aircraft owner can claim 100% bonus depreciation even if they plan on using it for personal use.