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Hudson Valley Bank Launches HVB Capital Credit – The Perfect Next Step

Date: Dec 04, 2013 @ 07:00 AM

“As Steve noted, businesses are beginning to rebuild their inventories and spending money on CAPEX … and they really need to because they have deferred those expenditures for the past three years.”

At HVB Capital Credit, Fagnani sees the opportunity to bring his large bank experience to the relationship oriented, high-touch approach the bank offers. “At HVB, we can be creative and above all, flexible. We can find a way to get deals done and into the organization. When I met Steve and his team, I noticed the culture here really resonated with me. While the bank didn’t have an asset-based lending team in place, Steve opened himself to my ideas where we can capitalize on the opportunities the market presents.”

Joining Fagnani at HVB Capital Credit are Richard Lampack, who heads up finance and treasury, and Kenneth Murphy as sales manager and the key contact for the Hudson Valley bankers. “I’ve had the good fortune of working with Rick for many years at Wachovia. He understands our technological needs quite well and he will be an integral part of selecting our software provider once that is up and running. He has 25 years of experience and he’s a great sounding board for us.

“Ken has also been in the industry for many years and he will primarily be responsible for our go-to-market approach and overseeing our sales force as well as educating our bankers as to what the ABL product is and when it can best be utilized. And then there’s me. I’ll be both the administrative person and in charge of credit.”

That, Fagnani says, makes up the team … at least for now. He notes however that HVB Capital Credit is in the process of hiring business development officers and underwriters. The point is to grow the staff as the business grows.

From the borrower standpoint, Fagnani notes HVB Capital’s sweet spot will be from $2.5 million to $25 million financing borrowers in nearly all industries. He adds that his unit will take on deals larger than $25 million by bringing in syndicate partners . In terms of a geographic standpoint, Fagnani and his team will be situated in Manhattan and will focus on the bank’s footprint. “But our footprint is national,” Fagnani says. “We want our business to be national in scope and we’re prepared to follow the deal to where ever it takes us. If in time, we find we have enough business in a specific region, we are very open to hiring a sales professional in that region.”

As far as participating in syndicated deals goes, Fagnani advises HVB Capital Credit will be a selective albeit willing buyer. “Some of the deals in the marketplace today are low-priced and loosely structured. Many are sponsor driven deals and I’m not a big fan of them since most of them are not heavily utilized. I’m more inclined to stick with non-sponsored deals with agents that we know.” That being said, Fagnani assures he welcomes the opportunity to review all deals and promises a quick review and response.

Fagnani is clear as to which situations and industries either won’t make the cut or will require special consideration. “We won’t do healthcare deals that would involve third-party reimbursement. I wasn’t crazy about financing technology at Wachovia, but Wells was great at it and I learned from them. We’d certainly consider technology, but will approach it cautiously.”

As for the business cycles, he says, “I don’t think we’ll do start-up financing but we will look at storied credits … it just has to be a good story as I’m not really looking for an unhappy ending. But we will look at those credits … after all, they are in fact made for ABL.”

Looking to the asset-based lending market at large, Fagnani expects the business to remain hyper-competitive. “My takeaway from the CFA Conference last month is that the marketplace has become almost bifurcated. There are large lenders doing the large sponsor driven deals. Greater discipline is more evident in the mid-sized market but I did hear tales of field exams limited to once a year and the like.

“On our end of the market, I think that while there are many entrants, most of them are not going to want to touch troubled deals. The non-regulated entities are seeing more of that activity and that is likely to continue. From where I sit, I see only the most creative and the smartest lenders will be able to play across the full spectrum of the deals they will see.”

Fagnani doesn’t hesitate to close with one final expectation for the coming year. “I see Hudson Valley doing deals regularly and routinely.”

In terms of parting thoughts, Brown offers the following: “Entering into the asset-based lending fray for Hudson Valley isn’t some whim or something we’re doing because others are jumping into the space. It’s part of our conscious effort to transform the way we lend. We’re known as a business lender and this initiative gives us a more significant profile in the market.

“We’re 40 years in the business and about $3 billion in size … that’s a respectably sized institution and it demonstrates that we don’t jump into businesses willy-nilly. We follow opportunities we think fit our business plan and we think this is the perfect next step for Hudson Valley Bank. I’m excited about this business and what we’re building for 2014 and beyond.”

Senior Editor | ABL Advisor
Stuart Papavassiliou is senior editor of ABL Advisor and Equipment Finance Advisor. He has worked in publishing for more than fifteen years.

Contact Stuart Papavassiliou at 484.380.2964 or

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