In February 2010, EverBank Financial Corporation acquired Tygris Commercial Finance Group, expanding the bank’s product offerings to include equipment financing solutions nationwide under the leadership of Jim McGrane.
McGrane’s success building EverBank’s equipment finance unit over the past three years recently resulted in the expansion of his role to now include leadership responsibility for all of EverBank’s commercial finance businesses encompassing Equipment Finance, Lender Finance, Commercial Real Estate and Business Banking. In this double interview, Equipment Finance Advisor catches up with Jim to learn about his expanded role within EverBank and his vision for the Commercial Division. Jeff Hilzinger, who succeeds McGrane as the president of EverBank Equipment Finance and EverBank Lender Finance also joins us and provides his views on the future of these two prominent commercial finance divisions.
Equipment Finance Advisor: Jim, you were recently elevated to the role of Executive Vice President, EverBank Commercial Division, expanding your leadership role significantly within the bank – beyond leading the equipment finance business. Please provide our readers some insights into the bank’s efforts to unify the commercial side of the business and outline the business lines you will be leading for EverBank?
Jim McGrane: You know, an equity analyst who covers us recently wrote; “if you were to start a bank today, built for tomorrow, it would look like EverBank.” Since the acquisition of Tygris, the bank has been consciously diversifying the business into a broader banking, lending and investing franchise. More particularly, over the past twelve to eighteen months, one of the more prominent areas of growth has been in commercial finance which has grown organically as well as through the acquisition of businesses possessing leadership positions within their specific areas of specialization.
Last summer we announced the integration of our commercial businesses into a single commercial platform which includes Equipment Finance, Lender Finance, Commercial Real Estate which focuses on single and multi-tenant real estate transactions, and Business Banking – where the non-credit products and services reside.
So we’ve been working hard through the course of 2013 to prepare ourselves to launch what we believe to be a fairly significant transformation of our commercial businesses both in the way we go to market and the way we serve our clients.
I’ve been asked to take this leadership role to bring all these businesses together, direct the entire commercial franchise, and build new strategic product and business line capabilities. Our intention is to continue to broaden and grow the commercial platform via an organic growth path along with select M&A activity to fill strategic gaps we have identified.
Equipment Finance Advisor: Over the past year we’ve noted a few announcements where equipment finance professionals have moved into senior positions within banks. Do you feel banks are recognizing the talent resident within the equipment finance field more today than in the past?
McGrane: First let me say that I am flattered and honored for being asked to take this role. Equipment finance is an area of commercial finance that touches many areas of commercial lending – including C&I lending, structured finance, franchise finance and so on. My experience in the equipment finance industry has provided me a solid background as I have touched many of these lending areas throughout my career. I also believe diversity of background is helpful. I started a few new companies through the course of my career, worked with large and small firms, and started two consulting practices focused on strategy and organizational effectiveness – not focused solely in commercial finance. So in my case I believe it was my diversity of background and an overall good fit within the institution that resulted in this opportunity.
Equipment Finance Advisor: What efficiencies and/or opportunities do you envision leveraging through your leadership from the banking side?
McGrane: The only way we can succeed in executing our strategy is by having these businesses operate in harmony, ensuring they are synchronized and leveraging the best practices from each. Bringing all the commercial businesses together as opposed to having them run as silos will expose us to a great deal of untapped potential within the markets we serve. So the integration of the commercial businesses isn’t about just linking them together, sticking them under one roof and changing their names – it’s really far from it. The imperative behind this strategy is to fundamentally change the way we serve the commercial market. We are moving away from our traditional approach which was primarily focused on product delivery versus looking to establish long-term, multi-faceted relationships that are sustainable over time. We’ve always been tightly aligned with our channel partners, but we’ve been more transaction oriented. As opposed to our focus today, which is to foster an environment where we can deliver a rich set of capabilities and products while fully leveraging our investment in the client – and the client is fully leveraging their investment in us. So, it’s about developing longer term sustainable relationships on multiple levels, which is different than how we have been executing up to this point.
Equipment Finance Advisor: Jeff, you are now the president of EverBank Equipment Finance & EverBank Lender Finance. Please tell us a bit about your experience in the commercial finance industry and your new role within EverBank Commercial Finance.
Jeff Hilzinger: I spent about 20 years of my career with Heller Financial starting in Heller’s asset-based lending business which ultimately evolved into a large leveraged lending business. 
From there I moved into a structured finance role working with other business units helping them utilize securitization to either originate more business or finance their portfolios more efficiently. After roughly fifteen years in this role, I moved into the equipment finance side of the business and that is where I met Jim. The last few years with Heller I was based in London running a non-U.S. operation for the vendor finance business working for Jim.
Upon returning to the states I had the good fortune to work with Jim and Rich Gumbrecht, Everbank’s Chief Growth Officer, as a co-founder of U.S. Express Leasing which we launched in 2004. I was also the Chief Operating Officer of Tygris Vendor Finance until we were acquired by EverBank in 2010 when I became Chief Operating Officer of this business. In 2011 we created the Lender Finance Business and I led the development of that business which has been reporting to me since its inception. With the consolidation now of all the commercial businesses under Jim, I will be leading the equipment and lender finance businesses.
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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.