MB Equipment Finance was one of the winners of the GE Capital divestiture sweepstakes, as it added eight team members from the former financial service giant last spring. President Dave Drury details the recruitment process, how the new additions have helped lift MB to new heights and the exciting prospects 2017 has to offer.
Do you remember where were you on April 10, 2015? If that date doesn’t ring any bells, here’s a reminder: That was the day Jeff Immelt, chairman and CEO of General Electric, announced that GE would be selling off most assets of GE Capital in the coming two years.
The announcement sent shockwaves through the equipment finance and financial services industry as a whole. However, while some were scrambling to understand what the loss of the behemoth would mean, there were others who saw the move as an opportunity for their own businesses. Some went the way of actually buying off pieces of the company, while others were able to bolster their teams by recruiting prominent figures in the GE Capital organization. If you subscribe to monitordaily’s e-newsletter, you have no doubt noticed the abundance of headlines featuring the phrase “Former GE Capital Exec Joins…” during the last two years.
However, some companies were not content with adding a senior vice president here and a relationship manager there. Some sought to recruit multiple team members to supplement the teams they already had in place with the experience and expertise of GE Capital’s professionals. MB Equipment Finance was one such company.
One Person’s Divestiture is Another’s Gain
Nearly a year to the day after GE Capital’s big news, MB Equipment Finance made an announcement of its own, trumpeting the addition of eight former GE Capital professionals to its ranks. These included Rob Bakke, Mark Beardslee, Rob Bolo, Derek Coe, Todd McEntegart, Todd Sinclair, John Sutehall and Christine Beaudry, followed by two more later in the year, Julie Coger and Chris Anderson, bringing the total to 10.
It didn’t take long for the company to realize that the GE Capital divestiture announcement would be a major boon to the enterprise.
“When we heard the announcement, we immediately knew we had a once in a lifetime opportunity to make some transformative change for our business,” says Dave Drury, president of MB Equipment Finance. “We leveraged our contacts both within and outside the organization to identify and begin aggressively recruiting several proven, high-performing originators in attractive markets where we previously had minimal presence.”
Competition is always fierce in the equipment finance industry, and that was doubly true as MB navigated its pursuit of these new additions. After all, it wasn’t the only company that’s ears perked up when the GE Capital news broke.
“We certainly weren’t alone in doing so, as just about every major equipment finance and leasing company in the country was also doing the same thing,” Drury says. “However, I think there were several unique qualities that really differentiated MB Equipment Finance from everyone else in this process.”
Expanding on Established Experience
The first of these distinguishing features was the fact that MB Financial Bank, which is the parent of MB Equipment Finance, has been in the leasing space for 40 years. That shows a dedication to the industry that Drury believes is a differentiator. In addition, MB’s target market mirrored that of GE Capital, which allowed new staff members to come in and work with similar relationships and customers. Lastly, Drury points out that GE Capital’s segmentation may have impacted relationships and opportunities, but a move to MB would allow each relationship manager’s footprint to expand.
“The most attractive aspect of this team is that their collective skillset matches perfectly with the profile of originators we seek: talented professionals with experience in a prospecting culture where price and referrals are not the driving force for opportunity development; rather, it is good old-fashioned relationship building — calls, face-to-face meetings and consultative selling driving opportunity development,” Drury says.
Not only was there a mutual benefit in terms of fit, Drury believed the additions would help MB Equipment Finance continue to build its name and reputation on a national scale.
“While the MB brand is growing nationally, its roots are in Chicago and not all middle-market businesses across the country are fully aware of MB and its capabilities,” Drury says. “The recent hires bring personal brand recognition and a great contact network in their markets, which is exactly what we need to help our growth in new regions.”
Obviously adding 10 new team members, perfect fits as they might be, is going to change the makeup of an organization, but Drury thinks that has only improved the business, not just in terms of dollars and cents, but in recruiting additional team members.
“The additions to our origination team created significant momentum for our business and really helped us attract three former GE Capital seasoned credit professionals, a new documentation team leader, as well as several other individuals in accounting, documentation and technology to support our growth,” he says. “We effectively doubled the number of full-time employees year over year.”
The doubling quickly led to strong results for MB, especially in the last six months of the year. While it and its sister leasing businesses — MB Lease Banking, LaSalle Solutions and Celtic Commercial Finance — collectively experienced a record year in production, new customers and overall portfolio growth in 2016, MB Equipment Finance received a boost from its new hires, especially in the direct channel.
“To give you some perspective, specifically on MB Equipment Finance and the new team’s impact, they generated 60% of our direct channel’s overall production in 2016, most of which closed in the fourth quarter,” Drury says. “We have been making a concentrated effort to grow the direct channel portion of our business over the last two years and were thrilled that this segment delivered 23% year-over-year growth and represented 80% of our overall new business production.”
Along with succeeding on the business end, Drury has also been impressed with how well the entire team, newcomers and veterans alike, have come together to propel MB Equipment Finance forward.
“The team is cross-functional and has been really something to watch. We have a great supportive culture here and we don’t have any room for lone wolves,” he says. “We have made a concerted effort to revamp, where necessary, policies, procedures, guidelines, etc., and simply get better in everything we do. We feel very good about where we stand.”
Full Steam Ahead
Of course, standing still is not in the game plan, and optimism about 2017 has been built on the new team’s success, even in a shortened 2016. For the first full year of the new structure, during which new direct origination team members will carry a full-year budget, Drury has high expectations.
“We spent a fair amount of time developing a record number of new relationships in 2016 and getting as many master leases in place as possible,” Drury says. “The new team also missed the ‘prime quoting season’ last year, so we intend to capitalize on continuing to develop new relationships and grow those seeds we planted in 2016.”
Even though focusing on the direct channel has been a major part of the new makeup of MB Equipment Finance, Drury doesn’t plan on ignoring the indirect channel altogether.
“While we have been de-emphasizing our reliance on the indirect channel in our business, it is not any less important. We have aggressive growth goals in this area as well in 2017,” Drury says. “We have made a few organizational changes to enhance our efforts in the indirect space in 2017. We have dedicated both a full-time buyer and underwriter to support our reciprocal capital markets partners.”
In all, it’s an exciting time to be a part of MB Equipment Finance for Drury, who is also looking to focus on cross-selling efforts with MB’s asset-based lending group as well as MB Equipment Finance’s sister leasing companies. In addition, he is hopeful for the entire industry as economists forecast better fundamentals in 2017.
Add it all together and MB Equipment Finance is poised for a banner year in 2017. That’s something to remember.
As the demand to ship goods continues to increase, fleet operators need to take a hard look at how they are procuring and replacing equipment. Brian Holland of Fleet Advantage argues for more efficient practices, which includes shorter lifecycle management.
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.