U.S. Bancorp Specialty Finance

by Amanda Gutshall October 2007
In October 2006, U.S. Bancorp announced it was combining five of its units into a Specialty Finance Division, providing increased and specialized service to its customers in those sectors. Sal Maglietta was appointed to run the division, which includes equipment finance, asset-based lending, healthcare banking, energy and food/agriculture banking.

Sal Maglietta Executive Vice President/Head, U.S. Bancorp Specialty Finance

According to Maglietta, the units separately were well established within the franchise prior to the merging. “The five businesses were brought together under the theme of specialty finance to put a particular emphasis on these businesses as we believe they all have opportunity and growth potential, and they all had the common characteristic of having specialization run through the business.”

This specialization and focus on providing the customer more service in a nice, neat financing package is a philosophy that runs company wide. Maglietta explains the company strives to focus on providing superior service to the customer base it serves. “That’s a theme that runs across the entire organization. As it specifically relates to the business within specialty finance, customer service and customer focus are our highest priorities,” Maglietta says.

He describes his first few months at the company when he went on customer calls. Many customers were appreciative for the quality service they had received on a consistent basis with the company, something he describes as a pleasant surprise as he was just starting with the organization. “That’s just a great outcome to go on a customer call and the first thing the client tells you is that they are very, very pleased with the service you provide, and that’s what they get when they deal with U.S. Bank on a day-to-day basis. It’s sort of a basic tenant in each of our employee’s approaches to their jobs, that the customer truly comes first.”

It seems Maglietta’s own philosophy, which comes through as he speaks of the major themes and goals of U.S. Bank, fits right in with the company. He graduated from Manhattan College with a degree in accounting before earning his Master’s degree in finance from Pace University’s Graduate School of Business.

His career spans more than 30 years in the financial services arena, starting at Banker’s Trust Co. He followed it up with 24 years at Citibank, where he was CEO of Citi Capital’s Equipment Finance unit, before heading to U.S. Bancorp in February 2005 as the president and CEO of the Equipment Finance division. He was then promoted to lead the Specialty Finance sector in October 2006. For the past 15 years of his career, he has focused on specialty finance markets, most notably equipment finance, franchise finance, healthcare and asset-based lending.

Maglietta’s experience makes him a perfect candidate to head up U.S. Bancorp’s Specialty Finance unit, poised for growth both internally and externally. But it’s the external focus that brings pride to Maglietta’s voice.

He notes five factors that keep U.S. Bank above the rest. First and foremost is the quality of the employees throughout the organization and especially in the Specialty Finance division, who he says, specialize and support “the products and services that U.S. Bank has to offer to its customers within these units.” Second, is the specialization of the division and its units, which he noted, is a theme of the business, and the “expertise the people have in being able to serve these clients whether it be from a product specialty or an industry specialty.”

Third is the crux of the business, its focus on customer service, which is supported by the solutions Specialty Finance brings to its clients based on their needs and requirements. “We design and put together solutions that will truly meet their needs. And our ability to do that is supported by a fifth factor…that U.S. Bank has a wide range of high-quality products and services that we can bring to bear to deliver that solution.”

These factors currently fit and will continue to flow with the unit’s goals for the future. As the new division is viewed as an “opportunity from a marketplace perspective and is therefore a growth opportunity for U.S. Bank,” Maglietta states, “a lot of our plans, our objectives and our actions are around the ability to seize the opportunities to achieve growth.”

With this is the addition of new leadership within two of the Specialty Finance division’s units — asset-based lending and equipment finance. In the ABL unit, the company added Sam Philbrick, an industry veteran who worked for both Fleet and Bank of America. In the Equipment Finance sector, U.S. Bank hired Tony Cracchiolo from Citibank in the spring. “We’re very excited about the leadership these two gentlemen bring to those businesses and the growth that they can bring to bear in those markets.”

In addition to expanding its leadership from a “people perspective,” the division is expanding its capabilities on several levels — especially, Maglietta notes, in the ABL unit, where it is increasing its presence in what he calls the company’s “out of footprint markets, where the bank does not have a branch infrastructure. We are adding business development officers in those markets to be able to serve those out of footprint markets in a more meaningful way.”

The expansion also includes beefing up the sales force in the Asset-Based Lending and Equipment Financing units a well as in the Healthcare, Energy and Food/Ag segments. Where appropriate, Maglietta explains, the company is looking “for new markets within these businesses that we can serve and expand into.”

With this internal activity plus the constantly changing market, Maglietta calls the industry in both ABL and Equipment Finance “quite an exciting time … evidenced by all of the activity in both the equity and credit markets fueled, to a large extent, by the subprime mortgage business. There’s a lot of volatility right now.

“That being said and taking that into consideration, I feel good about the outlooks for both equipment leasing and ABL with the underlying assumption that the economy remains with some stable growth to it.”

In equipment leasing, he adds, there are many opportunities such as gaining marketshare, strengthening the unit’s position in the banking footprint where U.S. Bank has a leadership position by leveraging that to the fullest extent and entering into new markets for equipment leasing.

For the asset-based lending business, Maglietta notes there is also a favorable outlook, and the division hopes to do much of the same as its sister unit by “expanding our footprint where we would be doing more in what I call ‘out of footprint’ markets but also like, equipment finance, leveraging our banking footprint within the 24 states where we have our commercial banking and community banking enterprise, and providing this product to the client base that exists there that can take advantage of an asset-based lending facility.”

Although he can’t foresee any specific trends in existence or on the horizon that are dictating the market, he does note that what is currently happening within the industry should help “rationalize the competitive environment we’ve been under in the past couple of years, which has been ultra-competitive. I think the current situation should help rationalize that and bring some balance to it in a risk/rewards sense.”

Although he admits that not much keeps him up at night, major challenges within the market consist of the competitive nature of the industry and more importantly, staying focused through the changes and complexities of the market. “Growth is never easy. It takes a lot of work and a lot of focus. We need to stay very, very disciplined and there are lots of way one could get distracted in the day to day; but keeping our focus on our customers and our opportunities in front of us is really what it’s all about. It’s all about execution.”

That focus is what keeps the Specialty Finance division and its employees attentive and united toward a common goal. One aspect that keeps Maglietta excited about the job is the quality group working around him. “They are great people and it’s exciting leading them in these businesses and working with them to grow the businesses and serve the customers that we have… I’m really blessed. I have a great team of people who are really experts in what they do, and really work hard and diligently to serve the customers that we have the opportunity to serve.”

He adds, “I think the themes that are important to me are: we’re client oriented, we’re focused on quality customer service and we’re focused on our people because this is a business that’s all about the people that are employed at U.S. Bank to deliver the products and services to the clients that match up with their needs. That’s really what it’s all about here.”

Amanda Gutshall is assistant editor of the Monitor.

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