Mace explains, “Given the collateral nature of auto finance, these two businesses fit well together. We have dedicated people for both groups, but these businesses are managed by the same professional. The same holds true for our credit and our field examiners and collateral analysts are shared with the other units as well. That’s the thinking behind this reporting structure and it’s why we are slotted under Nick’s business lines.”
ABL a ‘Core Offering’ … Now More Than Ever
Mace is quick to note that asset-based lending is one of Huntington’s core offerings and as such, it is a standalone product that reports to the bank’s Enterprise Leadership Team. Mace’s ABL staff is comprised of 18 individuals divided into four segments: business development, underwriting, portfolio management and operations. “If you take a look at our ABL staff, the average industry experience in approximately 19 years. Over the last two years, we’ve built to the group with a specific desire to fill these positions with professionals that have a great deal of ABL experience,” Mace adds. At the same time, Mace remains committed to creating career opportunities for younger talent.
Getting down to the brass tacks, Mace speaks to the specifics of Huntington’s ABL book of business. “Today our business has well over $1 billion in line commitments. And this significant growth has been organic, so we've been busy. In essence, we’ve gone from zero to over $1 billion in under five years. Our retention rates have been very high and through it all, we’ve actually been having a great deal of fun. That’s not to imply that the market isn’t competitive these days … it is. But we have a great group, a great team approach and as I said, we’ve been having a great deal of success in bringing in new business.”
From Mace’s perspective, this once again points to Huntington’s overall approach to banking. “At Huntington, you have a bank that’s able to offer the relationship feel of a smaller bank and at the same time, offer the product set of a larger institution. We have the sophistication of a larger bank and that’s very appealing to our customers.” And it’s because of this approach that Mace makes it a point to meet with customers at least annually. “This way, our customers know me and the other decision makers on their accounts. They have access to us and that’s something our larger competitors aren’t able to offer, by and large. That’s a distinct advantage we have.”
As for the state of the industry at large, Mace notes some challenges lie on both the regulatory front as well as within the marketplace. “I think for now our regulators appreciate the discipline inherent in ABL structures, but that could be subject to change. I’d say another challenge right now comes from the fact there are so many new entrants in the space. Many of them don’t have a lot of experience and I’m a bit concerned that they may compromise on structure as they get desperate around their growth aspirations.”
And while today’s environment requires all players to be cost competitive, Mace says, “I intentionally drive the point that we have no intention of being cost leaders. ABL is too expensive a business model to be leading the pack in that direction.”
For now, Mace approaches the future without a qualm. He speaks to his own aspirations. Mace explains, “Huntington is clearly committed to this business both now and for years to come. I am by nature competitive and my growth aspirations for this business are quite high. We have a great strategy and I expect us to get much bigger without sacrificing the model. And that is a challenge that I’m up for.”