Marc Paulhus grew up in the Ocean State, and now he’s come back home. After moving across the country several times during his 30-year career, Citizens Bank appointed Paulhus president of Rhode Island, in addition to his existing role as president of Citizens Asset Finance. While Paulhus previously held a similar role as Illinois president, the Rhode Island appointment holds a different meaning for him.
“It’s very different being able to do this back home,” he explains. “I grew up here. I went to school in Rhode Island. I started my career here. When you have this role in an area where you have history, where you know the area and where you grew up, you know the community, it’s special.”
On a professional level, the role provides a lot for Paulhus to be excited about. He says Citizens has been a leader when it comes to serving the customer and focusing on the community. “Being president in a market where we’re No. 1 in market share, and where our colleagues are so dedicated to being involved in the community, was a great opportunity for me,” he says.
Honing Essential Talents
“To be a leader in this industry, you need a variety of skill sets,” Paulhus says, noting that his career path has enabled him to see the industry from three sides — credit, sales and syndication. “Those different responsibilities along with managing a lot of people along the way really prepared me,” he says.
Paulhus began his career as a teller with Fleet before joining the bank’s commercial credit training program. “After I completed the program I was looking for a little change,” he says. “At that time equipment financing was one of the areas where you could work in other parts of the country.”
With Fleet, Paulhus completed a stint in Dallas before moving to California. After a few years, he joined LB Credit in a credit capacity. In 1993, the LB portfolio — along with Paulhus — was sold to CIT, where Paulhus learned a new aspect of the industry. “I joined CIT and became a salesman,” he says, adding that he later started a syndication group for CIT in Phoenix. In 2000, Paulhus left CIT for a syndications position with a dotcom company, Pure Markets.
Paulhus began his career with Citizens in 2003. Initially, he joined to start a global corporate aircraft group. He later became national sales manager for the asset finance company before becoming president of Asset Finance in 2008, and adding the Rhode Island presidency more recently.
A Culture of Discipline
Paulhus says his dual role has advantages, including increased connectivity and the ability to serve customers. “When you’re in the asset finance company and you have a broader role in the bank, that really increases the connectivity between asset finance and the rest of the bank,” he explains. “Having a broad role like this in Rhode Island gives me a great view across the entire bank.”
As the economy has emerged from the Great Recession, Paulhus credits a vital component of Citizens’ culture for its strength. “We did better than most because of a culture of discipline beforehand — discipline in structure, making sure the deals made sense to us,” he explains. “My view is that if you do deals that are a fit for the customer and the bank, even if you do have a problem, it’s not going to be as severe as it would be if that wasn’t the case.”
Looking ahead, Paulhus sees a lot on the horizon following the Royal Bank of Scotland’s full divestiture of Citizens this November. “RBS really helped us establish a brand while we were growing a commercial bank,” Paulhus says. “Another benefit of the separation, which has been amicable, is that we’re now a public company, which is great. We have our own stock. The corporate governance is now just within Citizens,” Paulhus says, adding that the divestiture is also beneficial from a regulatory oversight perspective, since Citizens only needs to consider U.S. regulations instead of both the U.S. and the UK.
Geographically, Citizens sticks to the U.S. in its business. “We’re targeting clients from the large corporate space to the middle-market companies in typical asset financial industries like trucking, construction, rail and marine,” he says. “On top of that, we also have a very strong corporate aircraft capability.”
During the short term, Paulhus is focusing on constant goals, such as targeting the right customers to fit Citizens’ products and ensuring good discipline around pricing and structure. “Customer service is in everything we think about,” he says. “In the long term, we focus on our future technology for the business, we try to anticipate industry changes and we’re always looking at other market channels.
“We have a really good focus on our customers here, but this business can be very busy at times,” Paulhus says. “I focus on making sure that we’re still doing everything we can to support, develop and manage our people. I think that is the key. In the midst of all this high-performance business and concentrating on our customer, I really want to make sure we stay focused on our colleagues.”
Paulhus says his team is truly what sets Citizens Asset Finance apart. “We have a great sales team, and we have a strong syndication capability,” he says. “We have deep experience in equipment financing. We have a lot of people in our company who have been in this industry doing this for a long time. From my perspective, it’s our people. We have a great team here, and that makes the difference.”
Industry Trend and Outlook
Paulhus points to the extension of production tax credits as a key trend that has shaped the industry this year. “The production tax credit has allowed for more opportunities to finance renewable energy transactions going forward,” he explains. “So extending that one more year meant there were more transactions to finance as long as they met the requirements for groundbreaking during the period. The uncertainty of that, before it was renewed, tempered the financing. Now that that’s been renewed, we can look at more opportunities of this kind and increase the focus on renewable energy. There’s a broader base of opportunities as a result.”
Another boon to the industry this year, according to Paulhus, was the retroactive bonus depreciation benefit from 2014. Meanwhile, he says the GE Capital divestiture, the rise of newly-formed finance companies and acquisitions within the industry have changed the landscape.
Paulhus has a tempered outlook for 2016. “I don’t see anything but moderate growth in terms of Capex, which is what we’re typically financing,” he says. “My expectation is that rates will increase somewhat, which also drives our business. I think the biggest risk, from my perspective, is the abundance of liquidity in the market, which could lead to unrealistic margins, pricing levels and structures that are too weak relative to the risk. That’s my biggest concern.”
However, Paulhus does see some significant opportunities in the year ahead, particularly due to the GE Capital divestiture. “I think it’s going to provide some big gaps in the market that we’ll look to fill, and there are going to be a lot of talented and experienced people when they become available,” he says.
Overall, Paulhus has a rosy outlook for the equipment finance industry. “I’ve been in this industry now for just over 30 years, and I’ve really enjoyed it,” he says. “I’ve worked with a lot of great people, both in the companies where I’ve worked and peers, particularly through the ELFA. I’ve seen a lot of changes, and I’ve learned we’re really a resilient bunch. In the equipment finance industry, we figure it out. We continue to grow. We handle more transactions with a sense of urgency. I’m just happy to be part of it. I’ve had a lot of fun.”