Brianna Wilson,
Managing Editor,
Monitor

The fifth annual Monitor 101+ ranking hosts 35 companies this year, bouncing back to the length of the 2022 list after a spike to 41 companies in 2023. Despite the contraction of the list, though, the companies posted year-over-year increases in both portfolio ($1,296.5 million, or 32%) and originations ($402.5 million, or 11%). Independents dominate the 101+, making up 57.1% of the list with 20 companies. U.S. Bank Affiliates follow closely behind, accounting for 34.3% of the list with 12 companies. The three Captive companies cover the remaining 8.6% of the list.

THE TOP FIVE

The top five Monitor 101+ companies consist of four prior-year Monitor 101+ companies and one previous Monitor 100 company.

Wingspire Equipment Finance, an Independent, moved up the list from No. 118 in 2022 to No. 101 this year, reporting a 121.6% portfolio growth. For Wingspire, this amounted to $288.5 million in 2023 net assets, up $158.3 million from $130.2 million in 2022.

No. 102-ranked KLC Financial also significantly climbed the ranks this year from No. 116 in 2022. The U.S. Bank Affiliate reported $285 million in 2023 net assets, a 54.9% portfolio increase from $184 million in 2022.

At No. 103, in a tie with Transport Funding Group, Merchants Bank Equipment Finance moved up four spots from No. 107 last year. Reporting $280.2 million in 2023 net assets, the U.S. Bank Affiliate grew its assets by 26.1%, up $58 million from $222.2 million last year.

No. 103-ranked Transport Funding Group joined Monitor 101+ from the Monitor 100, having ranked No. 98 last year. The Captive reported $280.2 million in 2023, tying with Merchants Bank. For Transport Funding, this represented a net asset decrease of $42.3 million, or 13.1%, from $322.5 million in 2022. For context, holding steady in net assets still would have landed Transport Funding in the 101+ ranking, as the company would have required a 2.3% growth of $7.9 million in assets to beat the No. 100-ranked company this year.

Skipping to rank No. 105, accounting for the tie between Merchants and Transport, Clarus Capital, an Independent, shot up the ranks from No. 119 last year. The company reported $273 million in 2023 net assets, representing portfolio growth of $145 million (113.3%) from $128 million in 2022.

SEGMENT OVERVIEW — NET ASSETS

This year, the Independents contributed the largest slice (47.2%) of the entire Monitor 101+ portfolio, reporting a collective $2,522.0 million in net assets across 20 companies. Thirteen Independents grew their portfolios, amounting to $877.2 million, while the remaining seven reported decreases of $81.7 million.

Following the trend of reflecting the Monitor 101+ list in 2022, the number of U.S. Bank Affiliates included in this year’s list fell to 12 — comparable to the 11 in the 2022 list. Similarly, the banks collectively reported $2,284.7 million in net assets, accounting for 42.7% of the Monitor 101+ total — less than 1% away from the 42.4% share of net assets reported by U.S. Bank Affiliates in the 2022 Monitor 101+. Of the banks, 11 reported portfolio increases totaling $530.4 million, while one bank reported a net asset decrease of $8.1 million.

The three Captives reported a collective $541.4 million in net assets (10.1% of the total Monitor 101+ portfolio). Two Captives collectively grew their portfolios by $21 million, while one Captive reported a dip of $42.3 million in net assets.

TOP FIVE ENI GAINERS

New to the Monitor 101+ this year, and new to the industry, having just launched in 2022, No. 117-ranked Capteris achieved the highest technical dollar gain in net assets, reporting $183.1 million.

But, focusing on the top five companies that grew from established 2022 portfolios, Wingspire Equipment Finance took the No. 1 spot with a $158.3 million increase. Following closely behind is No. 108-ranked First Commonwealth Equipment Finance with a $153.2 million increase. No. 105-ranked Clarus Capital claimed the third-highest growth with a $145 million portfolio increase.

Also new to the ranking this year, No. 115-ranked Delta Financial Group achieved a $123.7 million portfolio increase, placing it at $193.3 million in net assets in 2023 and giving it the fourth spot on our list of highest dollar gainers.

In fifth place is No. 118-ranked MidCap Equipment Finance. Climbing from No. 126 last year, MidCap reported a portfolio increase of $102.5 million for a total of $175 million in 2023 net assets.

TOP FIVE PERCENTAGE GAINERS

Our top three percentage gainers appeared on the top dollar gain list above. First Commonwealth Equipment Finance achieved 192.2% growth, Delta Financial Group achieved 177.7% and MidCap Equipment Finance achieved 141.4%.

New-to-the-ranking Bank of Utah, ranked No. 124, grew its net assets by 128%, bringing its portfolio to $76.8 million. Rounding out the top five, No. 122-ranked MMP Capital achieved a 122.1% net asset increase, elevating it from its No. 133 rank last year with $95.3 million in total net assets in 2023.

Honorable mentions are warranted for the No. 6 and No. 7 top percentage gainers in net assets, Wingspire Equipment Finance and Clarus Capital, which achieved increases of 121.6% and 113.3%, respectively. Wingspire and Clarus round out the list of Monitor 101+ companies that achieved over 100% increases in net assets this year.

$100MM CLUB

Four companies joined the $100 million club this year, including:
• First Commonwealth Equipment Finance, ranked No. 108 with $232.9 million in net assets, up from $79.7 million last year.
• Delta Financial Group, ranked No. 115 with $193.3 million in net assets, up from $69.6 million last year.
• Capteris, ranked No. 117 with $183.1 million in net assets. Having launched in 2022, Capteris did not have prior-year net assets to report.
• MidCap Equipment Finance, ranked No. 118 with $175 million in net assets, up from $72.5 million last year.

YE 2024 ENI FORECAST

In the Monitor survey, we asked each company to provide a forecast for ending net investment at the end of 2024 for their businesses. Of the Monitor 101+ companies, eight do not expect a change in their net assets by year-end 2024. Optimistically, no companies expect a decline, meaning the remaining 27 companies expect to grow their portfolios. Calculated on an average weighted basis, the group forecasted a 30.9% increase; next year, we may see the Monitor 101+ achieve a collective $7,000.9 million in net assets.

NEW BUSINESS VOLUME

The Monitor 101+ companies grew at a slower rate in new business volume this year, reporting $4,076.3 million in originations, an 11% ($402.5 million) increase from 2023. The companies were nearly split by reported increases and decreases; 19 companies that grew their portfolio did so by $904.8 million, while the 16 remaining companies reported declines totaling $502.3 million.

THE TOP FIVE — NBV

The new business volume leaders shook up the top five lists so far, but not dramatically. MMP Capital reported $354 million in new business volume, elevating the Independent slightly from No. 103 to No. 101 with a 19.2% ($57 million) increase. Wingspire Equipment Finance landed on another top five list with $351.6 million in 2023 originations, though it dropped from No. 101 last year to No. 102 this year with a decrease of $85.5 million (19.6%) in new business volume.

Sany Capital USA, a Captive, reported $253 million in originations, a 7.5% ($17.7 million) increase, which elevated it slightly from rank No. 104 last year to No. 103 this year. U.S. Bank Affiliate KLC Financial ranked No. 104 on the volume list, up from No. 112 last year with $235.9 million in originations — a 79.1% ($104.2 million) increase.

Concluding the top five, Clarus Capital reported $206 million in originations, earning it the No. 105 rank from its No. 124 rank last year with a 124.9% ($114.4 million) new business volume growth.

SEGMENT PERFORMANCE — VOLUME

Independents contributed over half (58.7%) of Monitor 101+ originations, with 20 companies reporting $2,394 million in 2023 new business volume. Eleven of these companies grew their new business volume by $538.7 million, while the remaining nine reported a decrease amounting to $345.1 million.

The 12 U.S. Bank Affiliates accounted for 31.5% of the Monitor 101+ total, with $1,282.4 million in originations. In another nearly-even split, seven banks increased originations by $348.4 million, while the remaining five reported decreases of $120.2 million. Captives contributed 9.8%, or $400 million, of total Monitor 101+ originations. Only one company grew its new business volume by $17.7 million, while the remaining two posted declines totaling $37 million.

NOTABLE PERFORMANCES

Bank of Utah, new to the ranking this year at No. 117, reported $62.2 million in new business volume, an increase of $53.4 million (612%) from $8.7 million. Three other companies achieved more than 100% growth in originations — No. 115-ranked Delta Financial Group with $152.1 million, a 176% increase; No. 105-ranked Clarus Capital with $206 million, a 124.9% increase and No. 108-ranked First Commonwealth Equipment Finance with $183.6 million, a 116.3% increase.

RETROSPECTIVE

Each year, we ask Monitor 101+ participants to provide an overview of the challenges they faced in the preceding year. The following are a sample of the responses we received this year:

Independent: Interest rate increases, reduced capex spending and increased competition in our target market.

U.S. Bank Affiliate: 1. The significant increase in interest rates due to the government’s plan to lower inflation. 2. Trucking industry moving from robust in 2022 to extremely troubled — low hauling rates due to oversupply of pandemic truckers. 3. Banks pivoting to identifying a manufacturer and becoming a captive, leaving less new equipment for bank vendor direct sources to have an opportunity to lend to. 4. Private equity and Independents increasing market share as traditional lenders are pulling back or exiting.

Independent: Cost of funding variable and rising fast with overall rise in interest rates; this required proposals for new business to calibrate quickly to maintain spreads. Equipment deliveries continued to feel slow post-COVID. We could still be experiencing supply chain disruptions. Bank lending market impacted by SVB and others limiting the ability to secure additional financing. Securitization market was also challenged.

Captive: New business volume was a challenge. Much more competition in 2023, coupled with the economy and higher interest rates, made generating new business volume extremely challenging.

Independent: Significant industry slowdown. Credit quality of industry continues to improve marginally but rates have gone up.

U.S. Bank Affiliate: Systems conversion did, and continues to, impact efficient processing of transactions and has negatively impacted our customer’s experience — our biggest challenge. Liquidity has been a significant issue and will continue until banks can rid themselves of the government bond portfolio that significantly impacted our liquidity challenges. Market competition was specifically difficult during this rising rate environment — multi-billion-dollar bank competitors against a small billion-dollar community bank. •

Brianna Wilson is managing editor of Monitor.