It was in January 2007 that we last profiled Mike Maiorino, some six short months before the global economy would show the first signs of faltering. What followed would eventually come to be known as the Great Recession. Since that time, much has changed for many in commercial finance — the same holds true for Maiorino. In July of last year, we learned that the ABL industry veteran was selected to lead the newly formed People’s United Business Capital. While some things have changed, much remains unruffled in Maiorino’s world.
Reflecting on his 34-year career in the industry, he explains, “As my career has evolved, I’ve noticed a couple of recurring themes for me throughout the years. Before joining People’s United, I was at Sovereign Bank for ten years and built a $2 billion business. During that time Sovereign was acquired by Santander, the fifth largest bank in the world. Having worked for large international and money center institutions as well as large regional banks, from the ability to serve the customer and maintain employee continuity, I find it easier to accomplish in a large regional banking environment.”
For Maiorino, People’s United fits the bill. Headquartered in Bridgeport, CT, the bank is a $28 billion institution with branches throughout New England and parts of New York. “It’s a well-capitalized institution … very strong with an overall strategy focused on organic growth. That’s what has attracted me here … the opportunity to develop a business with that focus in an organization of this size and strength.”
One Size Doesn’t Fit All
Maiorino contends that large organizations tend to serve customers with a “one size fits all” mentality, which he finds to be a somewhat antithetical approach to the ABL product. He notes, “The degree of inflexibility typically found in the major institutions doesn’t fit this business particularly well, in my opinion. This business is all about customizing credit opportunities … that’s one of the first things I learned and I’ve carried that forward throughout my career. It’s another one of those recurring themes.
“And I think we have the platform here to execute well on customizing credit solutions. We have a forward-thinking executive team that is excited about building out this product. I report to Jeff Tengel who came from National City Bank in Cleveland. Our CEO Jack Barnes also has a background in commercial lending from Chittenden Bank and Kirk Walters, our CFO, also has a broad background. It’s a strong executive team for a bank this size.”
In terms of his staff, Maiorino notes he spent his first 90 days on the job assembling the ABL team under one cohesive strategy. There is a preexisting team in New England and the de novo team in its southern region. “In the course of People’s United acquiring banks, they acquired Danvers Bank in the Boston area. Danvers had a preexisting asset-based lending team headed by Paul Flynn and David Paikin. We share a lot in terms of our backgrounds and through the years, we’ve worked with many of the same people. I think that’s a huge positive. We also have a team that emanated out of the preexisting business from the old Chittenden Bank based in Burlington, VT. Today Paul is running the Northern New England region which includes the folks in Burlington and Boston.”
Onward and Southward
With his many years in the Mid-Atlantic markets, Maiorino has been charged with taking People’s United ABL offering throughout its lending market, which extends from northern New England as far south as Washington, D.C. This de novo part of the business — the so-called Southern region — operates out of two primary offices, one in White Plains, NY and the other in Iselin (Metropark), NJ.
Maiorino says, “Last October, we brought in Tom Rappazzo to serve as Paul’s counterpart in the Southern region. Tom manages the portfolio and the RMs for this region. Then we pulled the entire business together under one organized umbrella by centralizing the marketing function headed by Kate Lepak. Kate, in turn, has two team leaders with David Paikin in the northern region and Gil Torres in the south.”
In the end, Maiorino is confident his efforts in the first 90 days will pay off for the team at People’s United Business Capital. “Our footprint is well covered at this point,” he notes. “This group already is working as a team … already there’s a level of cohesion that is very satisfying.”
With the team in place since last fall, Maiorino reports all have been busy at work in establishing a brand identity that communicates a unified message to potential borrowers in the footprint: we’re here and we’re a force in the marketplace. As for the reception, he’s happy to report, “I’ve been positively surprised at the level of business that has come our way; we have a pipeline that’s way beyond what I would have expected.
“On the other hand, everyone on our team is a seasoned individual and many of the deals we’re doing are with customers that we’ve known over a very long period of time. We’ve been in these markets and we know a good many people … that’s been a huge advantage.”
‘Right Down the Middle’
As far as the business model goes, Maiorino says People’s United’s ABL shop is rather straightforward. “We’re pretty much right down the middle when you consider the wide range of asset-based finance companies. We’re a bank-based ABL providing financings for growth opportunities, acquisitions, recapitalizations and we will look at some storied credits in the later stages of turnaround. We’re targeting deals in the $3 million to $25 million range in most borrower sectors and we package our working capital facilities around equipment as well as owner-occupied real estate to provide a comprehensive product to our customers.”
While the People’s United Business Capital approach is “right down the middle,” Maiorino says the culture at People’s United isn’t. “The culture of this organization is unique. I haven’t worked in many places where people come to you and say, ‘How can I help you?’ Everyone is helpful here … very team oriented. And while that might be cliché, everyone who’s come on board asks the same question: ‘Can people really be this positive and supportive?’”
Looking outwardly to the realities of today’s ABL marketplace, Maiorino is optimistic in spite of the indications that constrained economic growth will continue for the foreseeable future. With no hint of concern in his voice, he says, “In order for middle-market companies to continue to excel and in certain cases survive these days, they need to continue to acquire market share to make it, since there’s no real growth in the economy to speak of. As a middle-market asset-based lender, we should see a number of prospective merger and acquisition opportunities this year, which is not projected to be the case in the large ABL arena. In terms of basic survival skills — whether it’s a plumbing supply house or a construction materials distributor — we’re seeing companies pairing themselves up with other like organizations to achieve greater critical mass. That’s where we come in … to provide an acquisition line when it’s needed.” But that’s not where Maiorino’s call to serve begins and ends.
Called to Serve
A longtime Commercial Finance Association (CFA) participant and board member, he was elected to serve as the association’s vice president of finance for 2012 and is slated to take the role of association president in 2014. He admits this level of association involvement adds significantly to his already full schedule, yet he is quick to add it’s worth the investment. “I look at it as my way to give back to the community that in so many ways steered me in my career. The CFA has always offered me an opportunity to meet people … to get to know some of the icons of the industry when I was in my 20s and 30s. People like Peter Schwab, Irwin Teich, Jim Connolly, Leo Brightman, Frank Donahue and Walter Einhorn.… these gentlemen were true icons. They were giving their time and expertise back then and that’s something that inspired me back then … something I aspired to.”
Aside from the personal benefits he’s received through his CFA involvement, Maiorino emphasizes the important role the association plays with regard to advocacy. He explains, “Advocacy is important not only for the banks, but for the finance companies as well. If you think back to the 2008-2009 time period, one of the critical issues this industry faced was that the finance companies were very hard pressed to secure financing because the banks were somewhat reticent to lend at that time. The CFA played a part in working with a number of our Congressional representatives and the regulators to see if we could get more support for finance company financing. That made a difference for many of our association members.”
Still in the Game and Playing Hard
While five years have passed since Maiorino’s last ABF Journal one-on-one, he’s still at it playing the game as hard as he’s ever played it. The field examiner turned lending officer turned sales manager turned industry executive still loves meeting the needs of his middle-market customers. He explains, “I had a few stints in other forms of lending, but I didn’t feel the same level of satisfaction marketing those products. I’m most at home where I feel I’m adding value to a company’s existence … building the relationships that are so important in this business and helping the small and mid-sized companies so prevalent in our markets to grow.”
With a touch of wryness, Maiorino concludes, “I ran workout for a few years … and there’s a reason it’s called workout, it’s exhausting. In contrast, asset-based lending is very fun … it’s very positive and every day I get out of bed wanting to get to work at building something…”
Stuart P. Papavassiliou is senior editor of ABF Journal.