Equipment Finance Advisor: As you assume this new leadership role, do you anticipate EverBank expanding its equipment finance focus beyond its current markets which include – Industrial, Golf, Healthcare, Office Equipment, and IT?
Hilzinger: The equipment finance business plays a prominent role in the commercial finance business today and it will continue to do so in the future. I see a lot of growth potential in our existing markets. Last year we had added the golf and specialty vehicles groups to our industrial platform – those are both relatively new ventures for us and both are performing very well. At this time, I cannot comment on specific segments we are considering, but I will say we’re looking at a number of opportunities. We view the equipment business as a growth business and we have demonstrated we can produce in that segment and we have plans in the works to continue expanding. One the great things about EverBank is that we have the financial raw material both in terms of cost of funds and funding stability to play anywhere we want, as long as it fits within our strategy.
On the lender finance side, we’ve been very pleased with the growth of this business since its inception in 2011. David D’Antonio who runs that unit has done a great job with his team. The lender finance unit is at a point of pre-determined evolution – we had a five year plan when we started that business and we are on track with that today. I think the lender finance business is going to benefit greatly from this commercial consolidation under Jim’s leadership. I also believe the lender finance business brings the best of asset-based lending and the best of structured finance together. We view lender finance as a growth business and we see many ways to further expand the offerings we provide today. We are all very bullish on the lender finance platform and where it is going.
McGrane: To expand on Jeff’s comments, in general, we like asset-based lending very much, of which lender finance is one segment within a broad set of opportunities. It fits naturally within our plan and we are looking at various ways we will expand in that segment. So, the best I can say at this time is to “stay tuned”.
Equipment Finance Advisor: EverBank Commercial Finance has become a prominent player in a relatively short period of time. What do you believe differentiates EverBank from its competitors?
McGrane: It’s fundamental blocking and tackling – making sure we are well prepared and understand our markets. Being clear on our strategy regarding markets we want to serve is certainly important, but we must also be clear on what we do not want to do as an organization. When we make strategic choices to enter markets, we need to be sure we bring the right competencies and capabilities to the table and that manifests itself in domain. We possess deep domain and experience in each of our business lines and we place a great deal of emphasis on execution and the customer – we recognize that the customer is king. This intense focus on the client in terms of what we deliver and how we deliver it is of utmost importance. We have a clear vision and strategy of how we are going to build, foster and retain customer relationships.
Hilzinger: We identified customer service and the customer’s experience as central to our culture going back to 2004 when we started U.S. Express Leasing and that focus and culture continues today at EverBank. Over the course of the past year we’ve been involved in a significant process renewal initiative in the equipment finance business, and our strategies have evolved significantly. At the end of the day we identified ways to improve the customer experience by revisiting our processes. We have a large team dedicated to this process renewal. I don’t think it’s coincidental that we grew so dramatically this year in a market that isn’t growing significantly – I think it’s partially due to our focus on enhancing the customer experience.
Equipment Finance Advisor: What are your views of the commercial finance market for 2014 and 2015?
McGrane: My first reaction is to stop the madness we are seeing in margin compression. I wonder how much longer we can sustain it. Despite that, I am cautiously optimistic. I don’t believe we are going to have any explosive or volatile movement in the economy, but rather a slow and arduous recovery. And, it will be interesting to see if the changes in quantitative easing will have any impact. I think there are many opportunities in each of our existing segments and the ones we are looking to enter – but we need to pick our spots carefully. I’m very excited about our future.
Hilzinger: We believe the market will remain highly competitive with many opportunities for us. It will take what Jim mentioned earlier to succeed – basic blocking and tackling. We have strong teams and we will remain focused on customer experience and execution.