Q&A with Greg Carasik: Executive Director of UMB Capital Finance
Greg Carasik, executive director of Capital Finance, UMB Bank, recently sat down with ABL Advisor to discuss his role as the leader of the bank’s capital finance business.
As a 25-year asset-based lending (ABL) industry veteran, Greg has spent the majority of his career navigating through the evolving ABL landscape. Below, he discusses the transition of Marquette Business Credit to UMB Capital Finance, his role with the bank, and the bank’s strategy for growing its asset-based lending (ABL) business. You can read Greg’s full interview with ABL Advisor‡ for more insight.
Q: Marquette Business Credit recently rebranded and restructured under the UMB Capital Finance umbrella, with you tasked to run the group. Can you tell us more about the new structure?
A: Marquette Business Credit, purchased by UMB Bank in June 2015, maintained the Marquette brand to prevent any disruption in the marketplace. In early 2019, we collectively decided to rebrand ourselves under UMB and simultaneously created a UMB Capital Finance platform to house our ABL, Factoring and Capital Corporation channels.
The idea around UMB Capital Finance is to drive the natural synergies that exist between the channels as customers move through their life cycle of borrowing needs. We have a unique opportunity with our UMB Capital Corporation channel, which can provide minority equity and mezzanine debt, to truly satisfy the entire capital structure for our middle-market clients.
Q: What does your new role entail?
A: In my new role, I continue to lead the ABL channel within UMB Capital Finance, but I also now have direct responsibility for the UMB Capital Corporation channel. The decision to put Capital Corporation under my leadership was due to the natural synergies that exist and develop with our ABL clients as needs arise for non-amortizing growth capital or equity.
Q: Where does ABL fit into UMB Bank’s overall strategy?
A: While UMB Bank has continually grown its business and footprint, it was missing a national ABL and factoring business to round out the borrowing lifecycle for clients. That’s why the acquisition of Marquette in 2015 was a perfect fit.
Like most banking institutions that are looking to maintain loan yields, the ABL group is an important contributor to achieving those long-term yield goals. UMB Bank has provided the ABL group all the necessary tools to grow the portfolio, so it is incumbent upon us to grow our portfolio in the right way.
Q: How has the ABL business changed the past decade?
A: Over the last decade, ABL businesses have had to move away from exclusively lending against traditional collateral to having a much broader lens that includes cash flow lending and non-traditional asset classes. With this change, we have needed to educate our portfolio management teams as well as our internal credit committees.
The results are that ABL lending continues to consume more of the total capital structure of our clients, which has impacted the second lien lenders in a meaningful way.
Q: You have a strong career as a portfolio manager. How has that shaped your views in terms of managing an ABL business?
A: Although my business development officers would almost certainly rather have a pure salesperson running the business, lending in this current low-yield environment has made it more important to minimize loan losses through strong portfolio management in order to achieve budgeted results. Margins have continued to erode, and the only way to offset some of that is to minimize loan losses. Taking a large charge off in the portfolio requires a considerable amount of new funds employed to offset the P&L impact given the lower yield environment.
We have built a very versatile portfolio management team with strong workout skills and the ability to do it with a customer-centric approach in mind. This approach is more art than science and something I have instilled in all of our client managers.
If you are interested in learning more about how UMB can help your business as a financial partner, visit our website.
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