A member of the original group that launched Huntington’s equipment finance unit in 2001, new president Mike DiCecco explains that being completely integrated within the bank’s overall strategy and offering unbiased solutions to commercial clients are key differentiators in a competitive marketplace.
Like many in the equipment finance industry, Michael DiCecco has benefitted throughout his career from fruitful professional relationships. He is a member of a group that came from U.S. Bank to launch Huntington’s equipment finance unit in 2001. All but two of the original founders remain with DiCecco at Huntington. Also working with him at Huntington as director of the capital markets group is his first mentor in equipment finance, Kim Trombetta, who plucked DiCecco out of a bank training program and set him on his current career path. In 2010, Rick Remiker joined Huntington, and he and DiCecco “hit it off right out of the gate.” Together they formulated the equipment finance unit’s strategic plan.
“In 2001, nine of us came to Huntington to start its equipment finance business from scratch. We had been in a prior organization that had gone through changes and mergers, and we were looking to create something the way we wanted it to be built. Huntington at the time didn’t have equipment finance as one of its core offerings, so from the start there was a good synergy between the group of us and the bank. We started on October 1, 2001 with the goal of building one of the best bank-owned equipment finance businesses in the country. We closed our first deal in 30 days. It’s been quite a great ride building something from zero to $2.5 billion in portfolio size,” DiCecco says.
Upon starting the equipment finance unit, the small group “pretty much did everything,” and DiCecco worked in credit, sales and asset management. Also, he spent three years running commercial banking for Huntington’s Northeast Ohio region to broaden his experience base and rejoined the equipment finance group in 2008. Recently, Remiker, who launched Huntington’s specialty banking group — which includes equipment finance, corporate banking, energy, food & agribusiness, healthcare, international, private equity sponsor finance, quick-serve restaurant franchise, and university banking — was promoted to serve as the bank’s lead commercial executive.
“As Rick’s role continued to evolve, and he took on more specialty banking opportunities, my role expanded at the same time. It had been my career objective to lead this group of very talented equipment finance professionals and run the equipment finance business for Huntington. We developed a very strong professional partnership, so it was a natural progression in terms of the leadership of the equipment finance business. Rick will continue to have a lot of impact on our growth, as he has over the last several years,” DiCecco notes.
Among the original founders is Jeff Elliott, who leads corporate development and strategy and is director of Huntington Public Capital, which is the municipal finance business. Geoffrey Sale, head of the direct originations team, handles most of the sales specialists in the large corporate and middle-market channels, Trombetta heads up capital markets and John Maurer is chief credit officer of equipment finance. Today, there are 68 members of the equipment finance unit located throughout the footprint, with significant presence in Cleveland, Cincinnati, and at the bank’s headquarters in Columbus, with the remainder out in the field. Two of Huntington Equipment Finance’s specialty segments are business aviation and rail, both of which the group began to strategically grow in 2010. “Business aviation generally consists of medium and large cabin corporate aircraft. It has been a nice growth business for us. It is one of our national businesses, not geographically bound, focusing on the right kind of opportunities with the right kind of clients. Rail has been a nice portfolio addition for us as well. These are two asset classes with very long, useful lives that have come back very nicely from the economic crisis,” DiCecco explains.
Within the past year, the group has invested in and grown Huntington Public Capital, the bank’s municipal finance business. This group of colleagues provides financing for general obligation bonds, tax anticipation notes, revenue notes and the like. “It has been a solid addition to our overall business growth strategy,” he adds.
DiCecco’s group, which is driven primarily by the bank’s franchise in the Midwest, is focused on middle-market to large corporate companies with revenues of $25 million to $1 billion. Although most of the business is conducted within the bank’s core market, augmentation is provided by a couple of specialty national businesses like business aviation, rail finance and lender finance. Average transaction size is $1.5 million, with the smallest deals starting at $100,000 and the largest going up to $100 million. Business is derived mostly from direct originations, but the group also has “a very important buy desk.” DiCecco says, “We have good partnerships with many of the large bank-owned equipment finance businesses in our segment.”
In 2010, Huntington shifted control of all of its commercial equipment transactions to DiCecco’s group, which is completely integrated within the bank’s overall strategy. “Our colleagues sit with the commercial banking team as part of the regional commercial banking strategy. How we find, approve and close opportunities is very much aligned with the bank, and we have had high penetration rates with our commercial bank over the past three to four years,” he notes.
DiCecco adds that the advantage of working under Huntington’s umbrella is the executive leadership team and the symbiotic relationship his group shares with its members. Through its business development activities, equipment finance finds leads for the bank’s primary relationships, and, in turn, the unit receives resources, tools and direction from the bank to help it grow.
The strategic collaboration between equipment finance and the bank is also demonstrated in their shared philosophy toward customers. “Our goal with our commercial clients is to be their primary bank,” DiCecco explains. “That means not only providing for their financing needs, but also their cash management needs. We take the time to learn about and understand our client’s cash-flow cycle and provide financial solutions to help them manage it. Our equipment finance business is just one piece of that total solution.”
The group’s short-term objectives include being strong risk managers, which translates into achieving disciplined growth, while acquiring market share for the bank. In the long term, the group will continue to find opportunities for cross sell. “As the bank looks to develop new specialty banking businesses — such as healthcare and food & ag — we are aligning with those new specialty areas and finding synergies to go to market with them. In the long term you’ll see those industries become core competencies of the equipment finance business,” he says.
Regarding the equipment finance industry as a whole, DiCecco remains optimistic about 2014, although noting that the year will likely “have the same feel as 2013.” He foresees modest growth from CAPEX, excess liquidity, a slow-growth economy and clients that value creative thinking and new ideas. “It will be a year in which you’ll have to work hard to meet growth objectives because they are going to exceed any kind of CAPEX growth in the market. Replacement equipment has kept a lot of the industry rolling over the last few years, but it would be great to see some breakout business expansion coming from the corporate segment,” he notes.
On his wish list for 2014, DiCecco would like to see definitive decisions regarding lease accounting changes and tax reform. “The more ambiguity there is on tax reform, the more businesses tend to curtail expansion plans. What we’ve seen over the past couple of years is that people will invest in the long term when they know they have a revenue stream lined up,” he says. “There is not a lot of speculative investment going on. It would be nice to see the return of long-term optimism with CEOs and CFOs.”
In such an environment, Huntington and its equipment finance group will stay true to their successful integrated strategy — serving as a commercial bank that fulfills all of its clients’ finance needs by means of thorough service, delivery and accountability.
He explains, “At Huntington, no matter which area of the bank is in front of the client, the customer experiences the same cultural feel. We don’t show up with a product bias. We provide the right solution for a client based on its needs — and that is a differentiator. Not everyone has been able to get to that level of unbiased solution presentation.”
Barry Shafran, President and CEO , Chesswood Group Limited
Barry Shafran shares the story behind Chesswood Group’s journey from a Canadian new car dealership business with automotive lease receivables of just $80 million in 1999, to a North American public equipment finance business with a portfolio of $1.0 billion in 2019. He says the one constant and key ingredient in Chesswood’s journey is its amazing team of tenured and committed people.