A “confirmed non-corporate type” while attending college at SMU in Dallas (he hails from Bartlesville, OK), Cox headed to work on the Alaskan pipeline as a welder’s apprentice after graduating with a degree in Anthropology. After two years, he headed back to SMU for his MBA.

He then moved to Houston and became a management trainee for Southern Pacific Railroad, in the first group of MBAs the railroad hired as part of its training program. He spent two months as a switchman and brakeman in Oakland, CA, then spent a year as an assistant train master at a Houston-area freight yard.

Soon he was looking for a new career, so a roommate suggested a banking position. “I never pictured myself having a suit-and-tie office job the whole time I was in college, but one of my roommates, who worked for a bank in Houston, kept leaning on me… I kept saying it wasn’t for me.” But, he interviewed and found he was interested in a job at Texas Commerce Bank (TCB) in Houston.

And it’s at Texas Commerce that he’s stayed almost 27 years — in a manner of speaking. He started his career as a credit analyst, and moved into the lending businesses, working for the National Accounts Group covering the East Coast. He eventually moved to New York working in the TCB loan production office. It was there he covered large Fortune 500 companies and banks. He moved back to Dallas in 1985, and spent the next eight years covering the corporate market in that area. Then the era of multiple mergers occurred, first the Texas Commerce merger with Chemical Bank in 1987, followed by Manufacturers Hanover, Chase Manhattan, J.P. Morgan and, most recently, Bank One.

Cox noted that for those in Texas, several of the mergers “took place in the background. In Texas, we were not affected as much as our New York colleagues — the mergers were big deals but didn’t create local overlaps like some mergers can.” When Chemical merged with Manufacturers Hanover, for example, most of the integration took place in New York, with little Texas impact.

In the early 90s, Cox was asked to run the middle-market division in Dallas, a job, which was later expanded to include other Texas markets as well. At the time of the Bank One merger, he was responsible for a part of Chase’s middle-market business in Texas along with JPMorgan Chase’s national Asset-Based Lending and Equipment Leasing businesses.

When the merger was finalized, he continued to run the combined leasing business for both banks, now named Chase Equipment Leasing (CEL). He’s been fortunate to work with many of the same people he started with at Texas Commerce. “It’s been the best of both worlds. You can stay with the same company and work with people you know really well, where you have an established reputation, but you get to expand the sophistication and variety of what you offer to clients because the company’s capabilities have expanded so much.”

Bridging the Divide
Because the majority of Cox’s career focused on the banking segment, it might seem strange to some that he moved into equipment leasing, which he’s headed for more than three years. But Cox doesn’t find too much difference between the two businesses. “My belief is that whatever cultural divide there is — and there is one — it’s getting smaller. For me [transitioning from banking to leasing] was not that tough… As a relationship banker, we would handle the lending needs of the company directly and team up with product experts to provide other non-lending financial services. Equipment finance is a subset of the bank’s general lending business, which I already had a lot of experience in.”

In fact, he says, they’re virtually the same about half the time, with similar building blocks of credit, collateral value and profitability. “There’s not nearly as much difference between equipment financing and lending as there is between foreign exchange and lending, or between treasury management and lending. So right off the bat, I think there’s more commonality.”

As a banker, he says, he worked with a lot of product groups and specialists, and has a good understanding of what it takes to be a successful product partner. The bankers are generalists who manage client relationships, identify client needs and connect the right product expertise inside the bank to that client. “At CEL, our originators are the experts,” and Cox adds, “while they’re [aware] of the relationship, their primary focus is on the transaction, and on educating both client and banker on the tax aspects and other nuances of the product.”

One thing Cox likes about the leasing side is the fact that “we have a very strong sales force … people who are focused on transactions, closing business, following up and always pushing the ball forward. I enjoy the energy level and emphasis on closing sales in leasing.”

Another difference he sees between the two businesses is the leasing industry’s “commission” compensation mindset, which differs from relationship banking. “In banking, incentive compensation tends to be more discretionary, and performance is defined more broadly than just the total of business closed during the year, which is a pretty big divide to bridge.” Since the merger, CEL has moved to an evaluation process that’s highly performance-based, but without the rigidity of a commission plan. “It’s now more consistent with the rest of the Commercial Bank, while still strongly driven by current year new business production. And getting the group of formerly commissioned salespeople comfortable with something that’s not totally spelled out in advance took a lot of trust and communication on the front end,” which Cox has worked hard to do.

It seems that Cox has taken his experience from both sides of the spectrum and incorporated them into one — and that has made both Chase Equipment Leasing and the bank profitable and productive.

First, the company and Cox don’t think of equipment leasing as an independent “business” of the company but as a “product that’s available and actively used throughout the whole firm… We’re part of the coverage team for all JPMorgan Chase clients and prospects.”

Chase’s approach is to make the solution of a client’s needs a team effort. CEL’s originators work with bankers to evaluate the various CAPEX financing alternatives for a client, then collectively pitch the solutions that they feel are best. “If the best answer ends up as a specific equipment leasing opportunity that CEL handles, great; if it’s really better for the client to finance under their revolver, that’s fine too… Our approach is: Let’s, as a company, focus on what’s best for the client.”

For Cox, when he thinks of goals for CEL, his focus is for Chase Equipment Leasing to be viewed as the equipment finance center of excellence inside JPMorgan Chase, for “our knowledge, ability to execute and responsiveness. Our Chase Business Aircraft Finance effort is a great example of that. The team has built up great internal credibility over the past two years, and today the business flow is tremendous from all parts of the firm.”

Another goal for both Cox and the company is for people both inside and outside JPMorgan Chase to view CEL as a great place to work. He wants the company to be seen as having a “great culture, with strong performers who are happy to work there because they have exciting opportunities and enjoy the environment… It’s a group of people who are good at what they do and are focused on doing the right thing for their clients.”

One tactic for achieving this goal was the increase in internal communication Cox helped to install when he started on the leasing side. “My emphasis has been largely on internal communication and on spending time with our bankers and other business partners to clear away any mystery and confusion about what it is that CEL does. That requires a lot more partnering with different parts of the bank.” And it’s paid off. “As client managers and underwriters get to know and understand us better, we get a lot more opportunities, and have grown as a result.”

While operating within the framework of the bank’s target markets, the leasing sector also tries to be, as Cox calls it, “an engine that creates new client relationships for the rest of the firm.” In addition to pitching existing bank clients, CEL’s originators call directly on prospects and develop their own referral sources as a way of trying to open the door for new clients coming into Chase.

“We’re just one more arrow in the quiver creating a way for a prospect to become a new client of JPMorgan Chase. And we always team up with a banker, no matter who first identified the prospect opportunity — it works. Traditional industry salespeople may resist such an approach because it’s a bit more complicated — coordinating with someone else… But the flip side is, the originator, by partnering, is going to have five times the number of opportunities to do transactions than he or she would develop on their own.”

The Future of Leasing
Cox believes large, multi-product banks with big client bases should have an advantage in equipment finance if they execute well. “If they capitalize on the bank’s existing relationships, and really integrate processes and share information well between leasing, client management, underwriting and marketing, they will have a leg up. And they will continue to build share as the internal partnership gets better.”

But Cox knows there are still some bank-owned leasing companies that resist coordinating with their parent banks, and he sees it as a mistake. “CEL’s business has grown strongly, and I would attribute the lion’s share to improved partnership and business development efforts with our bankers and within JPMorgan Chase.”

There is also a trend toward commoditization. The product’s accounting attributes seem to be less relevant to clients than they used to be, bringing it closer to a generic lending business. “I think it’s fair to say that equipment finance is becoming more of a commodity — more like bank lending — and it will be harder to maintain the distinction in the future.”

Cox notes a way a leasing company can differentiate its self is by focusing marketing efforts and equipment expertise on specific industries — allowing originators to better understand the issues and structure transactions tailored more specifically to an industry’s particular needs and challenges.

As a result, Chase Equipment Leasing has developed two specialties: Chase Business Aircraft Finance and a government/not-for-profit/healthcare (GNPH) specialty. “We have two teams who specialize in these areas and that’s really spurred a lot of growth. I think additional specialization will continue to be a theme.”

The most important determinant of success will be the quality and diversity of talent leasing companies are able to attract and retain. He compares challenges facing the business to a rafting trip where the first three moves are planned at the top of a rapid, but once you’re halfway down you must fall back on your skills, experience and quick thinking to navigate the waters. “Business is a lot like that. You have a plan — a general direction you want to go and things you want to accomplish, but then big changes take place outside your control. You’d better have great people in the boat with you. That’s the best plan. If they’re skilled and nimble, you can turn those changes into an opportunity.

“With CEL’s senior team: Joe Stewart, Maurice Moore, Doug Reinarz, Mike O’Hern, Pat Clifford, John Wright, Sherry Fuessel, Ed Perkowski, Darrel Slater, Rich Newton and the new team leaders we’ve recently promoted, we’ve got the right people in the boat.”

And Cox and Equipment Leasing will continue this in 2007. This year, he hopes to devote more resources to the aircraft and government/not-for-profit enterprises, and possibly identify a new area for additional specialization. In 2006, CEL expanded its operating lease capability and will continue to be more active in this important market. Both will require further growth of the sales force, and Cox says the business will continue its growth trend.

But all in all, he would like his unit to be considered one of the “best product groups within JPMorgan Chase. A foundation for us is to be very integrated with our parent bank … which make us more efficient and successful. It’s a fun business to be in and I’m thrilled to have the chance to lead this team. It’s a competitive market, but we feel good about our ability to win our share.”