Republic Bank's new equipment finance unit, acquired as part of its deal for CBank in March, is expanding its small-ticket leasing capabilities.
The division that finances equipment purchases for businesses nationwide, formerly known as Commercial Industrial Finance, is now recast as Republic Bank Finance. The unit retained its executive team, including CEO Scott Hawkins, and all its employees.
Andy Powell, Republic Bank's chief lending officer, said that while Republic, a subsidiary of the $6.1 billion-asset Republic Bancorp in Louisville, Kentucky, already had lines of service in large ticket leasing, the acquisition of the former CIF will give it an entrance into the small-ticket leasing industry. This is equipment in the ballpark of $70,000. Typical items include office furniture, computers, printers and vehicles.
"Scott has a company with years of experience doing small-ticket leasing," said Powell. "But the acquisition gave them greater funding and growth potential."
Hawkins echoed Powell. "I think [the acquisition] creates a lot of value for our company, just having the backbone and the strength of a large bank while we're out in the marketplace," Hawkins said. "We compete against some large bank players and this pretty much levels the playing field."
The Cincinnati-based CBank reported assets of $271 million when
Last year, a handful of banks bolstered their equipment leasing operations.
Some institutions hired tenured executives to head new equipment leasing teams. Customers Commercial Finance, a subsidiary of the $21.8 billion-asset Customers Bancorp in West Reading, Pennsylvania, launched a small-ticket business division in March 2022. In June 2021, the $9.3 billion-asset First Commonwealth Financial in Indiana, Pennsylvania, stood up a new equipment finance unit, First Commonwealth Equipment Finance Group.
Others, like Republic Bank, have expanded through a merger or acquisition. In January 2022, the $16.3 billion-asset First Financial Bancorp in Cincinnati completed a $121 million-asset cash-and-stock
In March 2022, the $7.1 billion-asset Peoples Bancorp in Marietta, Ohio,
Bill Verhelle, a veteran equipment finance executive and former chairman of the Equipment Leasing and Finance Association, told American Banker last year that no matter the state of the wider economy, the equipment financing remains unfazed.
"In a downturn, you actually get more people that were paying cash for equipment coming in and doing financing," said Verhelle. "[Equipment financing] tends not to have deep dips, even during recessionary periods."
Powell attributes this stability to the essential markets that equipment financing supports, as the "backbone" of the economy, such as energy, manufacturing, healthcare and transportation. "So we're pretty bullish in our markets that we're in," added Hawkins.
"These [loans] are not buying a building you don't need right now," Hawkins said. "These are pieces of equipment you need to operate your business."
