Since being named the president/CEO of U.S. Bank Equipment Finance in April 2014, Cracchiolo has set his sights on underserved asset classes and a dominant place in the marketplace. In coming months, he plans to use economic growth to bolster company momentum in the industry.
Following a successful stint leading the organization’s businesses in the vendor channel since 2011, Anthony Cracchiolo was named U.S. Bank Equipment Finance president and CEO in April 2014. Under his leadership, Cracchiolo aims to move the company into a more dominant position in the U.S. marketplace.
Based on the Monitor 100 2014 numbers, he has cause to be optimistic. U.S. Bank Equipment Finance made its way into the top 15 largest equipment finance/leasing companies in the U.S., moving up one position from number 16 in the 2013 ranking to number 15 this year. Its net assets rose from $8.8 billion in 2012 to $9.5 billion in 2013, with new business volume up from $3.7 billion in 2012 to $4.1 billion in 2013.
A quick look at the company’s new business volume composition shows a shift away from a reliance on buy-side origination volume versus more of an emphasis on the vendor channel to achieve volume growth. This year’s Monitor 100 report shows a year-over-year increase of over 16% in vendor originations compared to the previous year, while buy-side activity fell off to represent less than 6% of total 2013 originations versus 8.3% in 2012.
With growth in his sights for 2014 and beyond, Cracchiolo says the company will continue to evolve. “Over the last seven years that I’ve worked at U.S. Bank Equipment Finance, the company has gotten bigger—bigger in size, bigger in assets, larger in profitability and larger in the breadth and depth of relationships within the market.”
Prior to Cracchiolo’s appointment as president/CEO of U.S. Bank Equipment Finance, he had almost 20 years of experience in the equipment finance and leasing market. But even before entering the market, he knew he would find a career in finance. “I have a strong background in technology and mathematics, which steered me toward banking at a very early age,” he says. “I then spent a good part of my career at the senior-level as managing director of Citibank/Citigroup, where I had exposure to a variety of activities in lending, technology and services. I have managed all aspects of leasing.”
After gaining valuable experience, Cracchiolo moved to a position within U.S. Bank Equipment Finance, where he served for seven years before his recent appointment as president/CEO—something that was meaningful to him both personally and professionally. “I’ve enjoyed and continue to enjoy my experience at U.S. Bank,” he says. “This is an organization with which I’m proud to be associated. The work ethic and culture are well-suited to my personality.” To focus on the employee and the marketplace, as well as the client base, is something Cracchiolo says is top of mind for both he and the company on a daily basis.
“I’m excited by the opportunity to lead the equipment finance company of one of the industry’s premium banks,” Cracchiolo says. “We treat our clients in a very respectful way. We are looking to not just complete transactions, but be relationship-oriented for the long haul. The senior management’s focus on employees and clients is at the top end of what I’ve seen in all of my career in financial services.”
In his position, Cracchiolo says he looks forward to sustained growth and improved market influence in 2015. “As president, I would expect to continue the outstanding growth and profitability that the U.S. Bank’s Equipment Finance business has enjoyed in recent years.”
Bringing client focus to the forefront, Cracchiolo says that as a national franchise, the company has seen development beyond market growth in all the segments it participates in, including technology, healthcare, construction, materials handling, office products, manufacturing and machine tool spaces, and direct leasing through bank relationships and the customer channel itself. “My goals are to continue to grow in our current market segments while expanding into other asset classes which are underserved but have the potential for growth.”
Building on its client focus, Cracchiolo says U.S. Bank Equipment Finance mirrors parent company U.S. Bank’s overall philosophy, a differentiating factor in the market. “Our approach to equipment finance is 100% aligned with the company’s philosophy,” he says. “We advocate on behalf of our clients to make sure their needs are met and focus our attention on how we can better serve our clientele in both advisory and transactional roles.”
In the equipment finance division, it’s superior industry knowledge that sets the company apart, Cracchiolo says. “Our point of differentiation revolves around our knowledge of specific industries and how equipment is financed in those industries,” he says. “We are a strong bank with a strong credit rating and the capacity to lend. Most importantly, we are concerned not only with developing new client relationships, but deepening existing ones.”
And it’s the leadership team at U.S. Bank Equipment Finance that cultivates those relationships. Cracchiolo says his team is one of the best in the industry that he has had the opportunity to work with. “Our leadership team has been extremely effective in driving the bank’s culture, philosophy and strategies,” he says. “The team is well-seasoned and well-selected for the markets that they lead.”
Cracchiolo elaborated that his team’s experience and skill brings much credibility to dealing with clients in the specific market sections in which the company works. “In certain verticals and asset classes, understanding intricacies and having substantial experience is a great advantage,” he says. “Across the board, my team is extremely effective in the particular classes they’re working with.” Though there are no immediate plans for expansion of that team, Cracchiolo says growth will occur as necessary, and all team members have shown considerable development in the past and have great future growth expectations.
Equipment Finance and Leasing Projections
Sighting predictions he made in the Equipment Leasing & Finance Association year-end 2013 Monthly Confidence Index survey, Cracchiolo says his projections that the industry will be well-positioned to address increasing demand when the economy improves rang true. “In hindsight, my projections for 2014 have been realized,” he says. “The obstacles that we encountered are all driven by economic uncertainty.” But despite the economic climate, U.S. Bank continues to be positioned to serve clients with confidence as conditions improve, Cracchiolo says.
“In general, the state of the U.S. economy has been a source of concern for the market. Reports such as those that show U.S. gross domestic product shrank 1% in the first quarter cause hesitation in the marketplace for capital expenditures,” he says. “Like everyone else that participates in the market, we feel the strain the economy puts on transactional decisions by customers. Until the overall environment is understood well by business leaders, clients will be hesitant to invest.” But despite general uncertainties, Cracchiolo says U.S. Bank Equipment Finance has seen no deterioration in activity in most markets and in fact, has experienced strong growth. “It was only in certain segments that we saw pullback, and only for a temporary time in the first quarter,” he says.
In regards to the equipment finance industry as a whole, Cracchiolo remains optimistic for growth in coming months. “At this point, I believe that economic activity in the second half of 2014 will improve slightly or remain the same,” he says. “Early indicators suggest that 2015 has the potential to be better than 2014.” And though there are no specific numbers to fortify his beliefs, he says that there are several positive indicators, including good credit quality, solidified company balance sheets and a solid foundation for growth. “Though I was disappointed to see the economy shrunk in the first quarter, I am waiting to see those numbers starting to look positive and in turn, to see increased activity based on those figures.”
Cracchiolo says that although his concern over the economic uncertainty continues as a critical factor to the rate of improvement, concern will abate as time goes by and conditions show indications of positive growth. “Based on my knowledge as a member of the board of directors for the Equipment Leasing & Finance Association, I am confident that the industry will fare well,” he says. “We did well through the deteriorating cycles from the 2009-2010 timeframe and we continue to do extremely well.”
With U.S. Bank Equipment Finance specifically, Cracchiolo is highly optimistic. “We are positioned extremely well; it’s a well-run bank. We are very solidly positioned for all future economic growth.”
Barry Shafran, President and CEO , Chesswood Group Limited
Barry Shafran shares the story behind Chesswood Group’s journey from a Canadian new car dealership business with automotive lease receivables of just $80 million in 1999, to a North American public equipment finance business with a portfolio of $1.0 billion in 2019. He says the one constant and key ingredient in Chesswood’s journey is its amazing team of tenured and committed people.