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Interview with Patrick Lee, Managing Director, Head of Lender Finance, Asset-Based Lending, People’s United Bank
By Eileen Wubbe
Recently, People's United Bank, N.A., a subsidiary of People's United Financial, Inc., announced it had expanded its Commercial Specialty Business with the formation of a dedicated Lender Finance team. The Team is led by Patrick Lee, managing director, head of Lender Finance, and is an extension of the Bank's existing Asset-Based Lending group. The Team will work with non-bank lender finance companies nationally to provide tailored solutions of $10MM or more to help them achieve their near and long-term growth objectives.
Here, Patrick Lee discusses his background and new role.
Please provide some background on your career.
LEE: I joined People’s United in 2016 from GE Antares to support the Asset-Based Group with Mike Maiorino and Kate Lepak, who lead our Specialty Finance and Asset Based groups, respectively. I initially joined in underwriting, later managing that team, until a business evaluation showed a clear growth opportunity for the Bank with a dedicated Lender Finance vertical, and I expressed my strong interest in leading that business. People’s United’s Specialty Finance capabilities have grown significantly in recent years, including Nonprofit, Franchise Finance and Healthcare Finance verticals, among others, and the opportunity for me to start growing an existing book of Lender Finance deals that we’ve had was an exciting proposition!
Professionally, I kind of fell into banking. I had completed an internship at Marine Midland Bank, and through that, was offered a credit management training program assignment out of college, and this is where my career started. Beginning with First Fidelity Bank, which later became part of Wells Fargo, I then went to Sanwa Business Credit where a former colleague from First Fidelity had gone. As I have navigated through my career, I have learned that it’s all about connections, and you frequently cross paths professionally with friends and former colleagues along the way, which was the case for me. From Sanwa Bank I moved on to CIT, Fleet/Bank of America, and finally Merrill Lynch Capital, which was acquired by GE in early ’08. Once GE sold the Antares platform, I joined People’s United.
It’s been an interesting and exciting career in many ways and I’ve learned and developed a diverse skill-set through many different roles—from field exams, collateral control, underwriting and relationship and syndication management. I was also an originator for about eight years, and during that period, provided both asset-based and leveraged cash-flow lending solutions to prospects through sources ranging from private equity groups to restructuring advisors. My specialized professional experience in varying areas of lending has positioned me well to lead our new Lender Finance group. As opposed to a more regional client focus, as has been the case for People’s United’s Asset-Based business, the Lender Finance team will have a national client reach, which presents an exciting opportunity! I look forward to sharing my specialized industry expertise to not only provide tailored capital solutions to clients, but serve as a long-term advisor and partner.
Throughout my career, especially here at People’s United, I have seen one common thread, and that’s the importance of relationships and having mentors, which I have been fortunate to have had, and I still maintain some great ones. I try to take the best qualities and lessons learned from each career move and use them as tools to refine my craft.
What are the immediate goals of the Lender Finance team at People’s United Bank?
LEE: As part of our evaluation process, we assessed the merits of getting into this business in a more formal way. We have an existing book, which we intend to grow, but we’ve also established certain performance and growth metrics for new business, and the target markets that we’re initially focusing on are primarily non-bank asset-based lenders, factors and equipment finance companies.
Critical to our success will be to stay true to our prudent underwriting standards, manage risk appropriately and partner with companies who exhibit sound credit quality. Equally important will be to listen to, and fully understand the challenges and opportunities of our clients, and develop solutions that are tailored and designed to enable them to achieve their growth goals.
How is the lender finance team structured?
LEE: The Lender Finance team is designed to be a highly specialized and integrated extension of our well-established ABL team, which includes talented and experienced relationship managers and skillful underwriters. That team will play an important role in serving our Lender Finance clients, in addition to a dedicated relationship management and underwriting team that I will form under the Lender Finance group as the business grows.
Part of the reason for deciding to formalize a Lender Finance business was driven by what we’ve been seeing in the market. A lot of our ABL opportunities fall within the lender finance universe, and it’s designed to bring a clear focus on that part of our business, and to enable us to expand in a strategic and consistent way. It also enables the rest of the business to focus on “core” asset-based loans and origination activities. It will drive efficiency and effectiveness across the entire platform.
The existing lender finance book represents a meaningful part of our total asset-based book. In addition to developing new lender finance clients, part of my job will be supporting our relationship management team in maintaining and growing those existing relationships.
What differentiates our Lender Finance Group is a consistent, responsive and reliable approach to the business which, when coupled with a willingness to spend time to truly understand the needs of borrowers, enables us to provide suitable, value-added solutions.
People’s United is more of a regional bank and this division you’re expanding is countrywide. Can you touch on that?
LEE: Sure. As we’ve looked at lender finance deals, it’s clear that they are, for the most part, national in nature and so the underlying collateral is going to be throughout the country. So, there’s an acknowledgment and a recognition of that.
Critical for us, and one way that our Lender Finance Group is differentiated, is we take a cross-functional approach allowing for a strong understanding of the management teams and ownership groups with whom we work. For example, within the Bank we have national leasing businesses whose management teams will know, and be able to speak to the management and operations of an out-of-footprint equipment leasing business that we may be evaluating. Additionally, I and others throughout the Bank have worked at institutions in other parts of the country, so our professional networks extend nationally.
What would you say will be the industry outlook going into 2020?
LEE: 2020 will be an interesting one, from the standpoint of how certain things have occurred this year and their impact on banks, and banks’ borrowers. Absent any major geopolitical influences that can potentially affect the U.S. economy and, in turn, the lending community, I don’t foresee tremendous change.
That said, the U.S. is and will remain among the best places in the world to do business. The U.S. economy is so large and strong, and will continue to show resiliency in the face of turbulence we may encounter. Overall, I’m very optimistic about it. From what I see and hear, we’ll have closer to two or two and a half percent growth. It’s something that we’ve become accustomed to, and I don’t see a recession on the horizon.
In terms of lender finance, there are and will perhaps be some new entrants into that area. Conversely, I think there are some lenders who may be pulling back in the space for a variety of reasons, probably more bank specific than otherwise. Net-net, I believe lender finance will be a growth area for bank lenders, and we’re looking to capture that opportunistic market within People’s United through the newly formed Division.
How can commercial lenders respond to the pressure of evolving their business and finding new ways to attract clients?
LEE: This wouldn’t be specific to lender finance within the Bank, but I think more broadly the asset-based business is constantly trying to improve efficiencies, relationships, and technology is becoming more relevant with account management, sourcing new relationships or establishing and maintaining those relationships ongoing. Also for tracking analytics around portfolio and prospect information.
Beyond that, in developing those relationships, I think it’s always important to stay or become active in the community. People’s United does a great job of this throughout the footprint, whether it’s sponsoring charitable causes or employee volunteerism in our communities. People’s United is prominent in the communities that it serves and will continue to be. I think that goes a long way in a very competitive banking landscape and it is a theme that has been central to our mission for more than 175 years.
What do you enjoy doing in your spare time when not working at People’s?
LEE: I’ve played ice hockey since I was a kid. I continue to play, albeit, not very well, with a really good group of guys who’ve mostly been skating together for a long time. So, there is good camaraderie in that sport which I enjoy.
I also enjoy skiing, cycling, playing golf and spending time at the Jersey Shore with family. We have a place in Long Beach Island, NJ, that we love to go to, and my wife and three kids really enjoy it down there. I like to read a lot, whether it’s business-related or different types of novels. I read a book recently called Blood and Thunder, which is a story about Kit Carson and the winning of the West that I found quite fascinating and enjoyable. I’d like to do more traveling, but just haven’t had the opportunity. Those are a few of the things I enjoy doing.
Thanks for taking time to speak with us. Is there anything else you’d like to mention?
LEE: I’m excited about the opportunity and I’ve been pleased with a lot of inbound congratulatory notes from people throughout the Bank, LinkedIn and elsewhere—that’s been nice to hear. It’s a reflection on the career that you develop with people and also the tremendous culture that filters throughout People’s United. Most importantly, I am looking forward to growing the team, and to helping our clients discover creative ways to grow!