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Listen in as Equipment Finance News editors interview the leaders in the industry, on both the lender and dealer sides of the table, to discuss new developments, trends, opportunities and more.
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Johnnie Martinez: On today's episode of the Dig, I
am joined by three members of
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Johnnie Martinez: the altar group and I will let
the three of them introduce
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Johnnie Martinez: themselves.
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Johnnie Martinez: Well, if you'd start us.
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Sure. Thanks, Johnnie.
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I'm Valerie Gerard Co, CEO of
the Alta Group and I lead the
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largest practice within Ulta
that's focused on providing
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general consulting and advisory
services. And you know it might
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make sense for me just to spend
a second to introduce the Alta
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group, to your listeners who
aren.
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Familiar with us, we have been
around for 30 years.
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We are the undisputed leader
when it comes to providing
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advisory services.
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On a global basis to the
equipment leasing and finance.
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Industry, we are exclusively
focused on equipment finance and
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leasing.
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We're not distracted by
mortgages or consumer autos.
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It's just the core equipment
leasing business and anything
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that a client would have in
terms of a need, we do it.
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So that could be assisting them
with some growth initiatives,
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entering new markets, becoming
more efficient in what they do.
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We have a lot of competitive
intelligence, market
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intelligence work we.
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We do.
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We assist in selecting leasing
systems.
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We have a group that is focused
on equipment management, so if
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you need some appraisals,
valuations, some residual
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impairment analysis as well as
remarketing, we have a team that
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does that.
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We offer mergers and
acquisitions as a practice which
the
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Jim Jackson: industry and buy a company and
also supporting, you know,
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Jim Jackson: sellers in the industry who
might be looking to sell their
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Jim Jackson: their property to to other
financial institutions.
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Jim Jackson: So Rick, I'll turn it over to
you.
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Rick Remiker: Yeah. Thanks, Jim and Johnnie.
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Rick Remiker: I'm Rick remicar.
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Rick Remiker: I'm vice chairman with the Alta
group and Prior to joining the
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Rick Remiker: Alta group nearly five years
ago, I spent 40 years in
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Rick Remiker: commercial banking, specialty
finance, and.
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Rick Remiker: Equipment, finance and equipment
leasing and I provide support
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Rick Remiker: and consultation to all the
members of the Alta group and
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Rick Remiker: clients predominantly in the
bank equipment finance space.
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Johnnie Martinez: Benja will thank all three of
you for joining us here today
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Johnnie Martinez: and I think the best place to
start now that we have the
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Johnnie Martinez: introduction and as well as kind
of the background of who you
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Johnnie Martinez: guys are covered, the 10,000
foot view part of the reason
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Johnnie Martinez: why.
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Johnnie Martinez: We are having a discussion today
is the release of the Alta
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Johnnie Martinez: Group's report on sort of the
state of the equipment finance
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Johnnie Martinez: industry and when we're talking
about the state of the industry,
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Johnnie Martinez: I think the best place to start
is like I said, that 10,000
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Johnnie Martinez: foot.
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Johnnie Martinez: View and we get some of the
specific areas.
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Johnnie Martinez: So going into 2025, as we look
at the rest of this year, what
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Johnnie Martinez: is the state of the equipment
finance industry?
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Well, why don't I kick it off
and tell you that I I think
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Johnnie Martinez: Mm hmm.
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there's a lot of opportunity for
the industry in 2025. You know,
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we're coming off a really rough
18 month patched where you had
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the bank failures at Silicon
Valley Bank and Signature Bank.
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And that really caused a
liquidity crisis that's put put
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the industry a little bit on
pause, if not in a backward step
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or two.
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And what we're seeing now is
we're looking into 2025.
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There are a lot of signs that
seem to suggest that it's going
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to be a good year for us when
you're looking at certain
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variables in the economy, when
you're looking at signals in the
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industry itself like industry
confidence and then you have a
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new administration that's
coming.
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In with some probusiness.
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Policies that certainly would
help bolster our industry and
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would result in a very positive
experience for equipment,
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finance and leasing companies.
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There are many different avenues
that we see in terms of growth
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for the industry in terms of,
you know, climate finance and
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financing, data centers,
equipment as a service, you
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know, all of those things will
certainly bolster the industry
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in terms of its growth. I would
say, however.
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One cautionary note in that is
there are a lot of wild cards
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out there. And so while we think
that there's a lot of
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opportunity for the industry,
management teams really need to
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be thinking about, you know,
we're not going to coast.
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To growth throughout 2025, there
might be some speed bumps along
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the way.
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Rick Remiker: And let me you know, let me jump
in Valerie and just encourage
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Rick Remiker: all the all the listeners to
pull down the the 2025 Alta
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Rick Remiker: Group Insights report.
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Rick Remiker: It's a great read.
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Rick Remiker: It covers a lot of different
segments and a lot of different
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Rick Remiker: areas that some of them will
touch on during this podcast.
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Rick Remiker: But.
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Rick Remiker: You know, if I could, if I could
summarize what sort of one
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Rick Remiker: overarching theme, I think it's
net net positive outlook for
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Rick Remiker: 2025.
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Rick Remiker: But certainly with high degree
of element of uncertainty.
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Rick Remiker: Maybe the advice to listeners
would be expect the unexpected.
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Rick Remiker: You know if you go back to if we
were recording this podcast
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Rick Remiker: exactly two years ago in mid
January of 20/20/20 of 2023, I
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Rick Remiker: think that we would have been
positive.
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Rick Remiker: Maybe not as positive as today,
but we would have been net
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Rick Remiker: positive at that point in two.
And just think what happened six
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Rick Remiker: or seven weeks later with the
collapse of several.
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Rick Remiker: Regional banks that created a
complete.
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Rick Remiker: Completely different industry
dynamic for the next year and a
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Rick Remiker: half or two years.
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Jim Jackson: Yeah, I think.
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Jim Jackson: I think that's a great point,
Rick.
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Jim Jackson: You know we we sort of get
lulled into a false sense of
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Jim Jackson: comfort sometimes.
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Jim Jackson: You know, Johnny, I'd follow
that up.
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Johnnie Martinez: Mm hmm.
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Jim Jackson: You know specifically on the M
and a market similar to
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Jim Jackson: Valerie's comments. You know the
last couple of years in terms of
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Jim Jackson: M and a activity, things have
been pretty quiet in the
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Jim Jackson: industry.
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Jim Jackson: But I think 2025 where we're
pretty well suited.
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Jim Jackson: From an economic standpoint, to
have a pretty strong M and a
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Jim Jackson: market.
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Jim Jackson: This year, you know, the market
does not like uncertainty.
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Jim Jackson: And there's there's a fair
amount of certainty around a
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Jim Jackson: number of factors, including the
fact that the uncertainty
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Jim Jackson: election you know is now behind
us.
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Jim Jackson: We have an administration in
place.
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Jim Jackson: Who's committed to reducing
regulation and and discussing a
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Jim Jackson: reduction in the corporate tax
rates?
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Jim Jackson: The stock market continues to
perform well.
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Jim Jackson: Unemployment levels are low.
Those traditionally a factors
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Jim Jackson: that generally contribute to a
pretty strong M and a market.
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Jim Jackson: The one factor that that's still
a little bit of a you know, an
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Jim Jackson: uncertainty at this point and
it's just you know reared its
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Jim Jackson: head not too long ago when we
had a super strong jobs report.
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Jim Jackson: You know the interest rate cut
has has kind of been sidelined,
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Johnnie Martinez: Mm hmm.
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Jim Jackson: if you will, by the Fed and
they're they're kind of
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Jim Jackson: backpedaling a bit on that. And
I think some of the Fed members
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Jim Jackson: are even thinking a hike might
be in order.
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Jim Jackson: That, of course, will.
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Jim Jackson: Will quell some M and a activity
if rates indeed rise.
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Jim Jackson: I think if I think you know the
other factors in the environment
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Jim Jackson: should keep us pretty steady,
but I'd caution keep an eye on
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Jim Jackson: interest rates cause those do
impact the the the level of M
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Jim Jackson: and a activity.
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Johnnie Martinez: Gotcha. Fantastic.
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Johnnie Martinez: And you know one thing I wanted
to get into, especially on the
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Johnnie Martinez: the M and a side and we can talk
about how this sort of plays
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Johnnie Martinez: into the wider equipment finance
space as well as are there any
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Johnnie Martinez: particular segments in terms of
you know, bank owned versus.
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Johnnie Martinez: Independent or you know,
specific asset types where
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Johnnie Martinez: you're seeing lenders that are
focused on these asset types
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Johnnie Martinez: more attractive in the M and a
space. Is there anything like
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Johnnie Martinez: that that's standing out as we
start to look at the rest of
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Johnnie Martinez: this year?
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Jim Jackson: Well, I think I think a couple
of factors.
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Jim Jackson: You know.
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Jim Jackson: Let let's talk about a couple
things that are going on in the
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Jim Jackson: marketplace.
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Jim Jackson: One area I think is is the lift
out teams that we're seeing. So
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Jim Jackson: certain strategics and others
are investing not not only in
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Jim Jackson: focused on complete companies,
if you will, but are focused on
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Jim Jackson: potentially lift out teams where
senior executives are brought
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Jim Jackson: over. That might help a strateg.
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Jim Jackson: To expand its market offerings
or gain some additional
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Jim Jackson: relationships.
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Jim Jackson: Think of the folks from Madison
Capital going over to Oakmont
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Jim Jackson: recently.
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Jim Jackson: Think again about the folks from
Honor Capital moving over to
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Jim Jackson: Dex.
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Jim Jackson: And I think we'll continue to
see those opportunistic lift
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Jim Jackson: outs going on throughout the
course of 2025.
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Jim Jackson: You know, I'd, I'd say the real
winners.
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Jim Jackson: For for.
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Jim Jackson: For the past year and I've seen
a lot of private equity
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Jim Jackson: investment in there, are these,
you know, middle market
2f8b3a32-f44d-4180-9d33-060c94098203/1439-2
Jim Jackson: structured firms where the
private equity companies feel
2f8b3a32-f44d-4180-9d33-060c94098203/1439-3
Jim Jackson: there's still a good return to
be made.
2f8b3a32-f44d-4180-9d33-060c94098203/1477-0
Jim Jackson: With those businesses basically
picking up the slack for the
2f8b3a32-f44d-4180-9d33-060c94098203/1477-1
Jim Jackson: banks as they sort of exited
those, those that tranche of
2f8b3a32-f44d-4180-9d33-060c94098203/1477-2
Jim Jackson: assets and that tranche of
lending and those private equity
2f8b3a32-f44d-4180-9d33-060c94098203/1477-3
Jim Jackson: firms that went out and actually
built teams or acquired teams
2f8b3a32-f44d-4180-9d33-060c94098203/1477-4
Jim Jackson: that were versed in bringing
over structured cred.
2f8b3a32-f44d-4180-9d33-060c94098203/1492-0
Jim Jackson: And potentially, you know,
structuring those in such a way
2f8b3a32-f44d-4180-9d33-060c94098203/1492-1
Jim Jackson: that they provide a strong
return.
2f8b3a32-f44d-4180-9d33-060c94098203/1500-0
Jim Jackson: Similar to the Stonebriar model,
if you will.
2f8b3a32-f44d-4180-9d33-060c94098203/1511-0
Jim Jackson: Where they can actually make a
decent return on their
2f8b3a32-f44d-4180-9d33-060c94098203/1511-1
Jim Jackson: investment.
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Rick Remiker: Yeah, Jim and I would just echo
that.
2f8b3a32-f44d-4180-9d33-060c94098203/1563-0
Rick Remiker: I think that one of the big
questions hanging over all of
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Rick Remiker: the private equity investment in
the industry, which has been
2f8b3a32-f44d-4180-9d33-060c94098203/1563-2
Rick Remiker: significant and in some of the
most significant private equity
2f8b3a32-f44d-4180-9d33-060c94098203/1563-3
Rick Remiker: investment I've seen in in many
decades is when the banks get
2f8b3a32-f44d-4180-9d33-060c94098203/1563-4
Rick Remiker: back into the market if and.
2f8b3a32-f44d-4180-9d33-060c94098203/1591-0
Rick Remiker: When they get back into the
market, will, will, will pricing
2f8b3a32-f44d-4180-9d33-060c94098203/1591-1
Rick Remiker: compression margin compression
Dr. pricing down across the
2f8b3a32-f44d-4180-9d33-060c94098203/1591-2
Rick Remiker: industry or will it really be
constrained to that bank credit
2f8b3a32-f44d-4180-9d33-060c94098203/1591-3
Rick Remiker: quality?
2f8b3a32-f44d-4180-9d33-060c94098203/1593-0
Rick Remiker: Sector.
2f8b3a32-f44d-4180-9d33-060c94098203/1631-0
Rick Remiker: And you know, I think the early
signs are hopeful that the banks
2f8b3a32-f44d-4180-9d33-060c94098203/1631-1
Rick Remiker: are the bank equipment finance
companies are having greater
2f8b3a32-f44d-4180-9d33-060c94098203/1631-2
Rick Remiker: pricing discipline, focusing on
risk adjusted return, focusing
2f8b3a32-f44d-4180-9d33-060c94098203/1631-3
Rick Remiker: on customer relationships and
total relationship return. But
2f8b3a32-f44d-4180-9d33-060c94098203/1631-4
Rick Remiker: as they say, time will tell.
2f8b3a32-f44d-4180-9d33-060c94098203/1636-0
Jim Jackson: That's an excellent point, Rick.
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Agreed.
2f8b3a32-f44d-4180-9d33-060c94098203/1661-0
Johnnie Martinez: Gotcha. OK. And as we talk about
sort of the potential turn of
2f8b3a32-f44d-4180-9d33-060c94098203/1661-1
Johnnie Martinez: the the banks, I know that's a
potential risk factor.
2f8b3a32-f44d-4180-9d33-060c94098203/1692-0
Johnnie Martinez: One of the other ones I want to
touch on specifically and then
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Johnnie Martinez: we can talk about any other risk
factors that are worth
2f8b3a32-f44d-4180-9d33-060c94098203/1692-2
Johnnie Martinez: discussing. Is the potential
risk factor of tariffs. And
2f8b3a32-f44d-4180-9d33-060c94098203/1692-3
Johnnie Martinez: that's been kind of the the buzz
word that's been thrown around
2f8b3a32-f44d-4180-9d33-060c94098203/1692-4
Johnnie Martinez: since the election as one.
2f8b3a32-f44d-4180-9d33-060c94098203/1719-0
Johnnie Martinez: Of the things that can
potentially limit what's
2f8b3a32-f44d-4180-9d33-060c94098203/1719-1
Johnnie Martinez: happening in the economy as a
whole, but it it transits into
2f8b3a32-f44d-4180-9d33-060c94098203/1719-2
Johnnie Martinez: equipment finance with so much
of our industry having
2f8b3a32-f44d-4180-9d33-060c94098203/1719-3
Johnnie Martinez: international firms.
2f8b3a32-f44d-4180-9d33-060c94098203/1730-0
Johnnie Martinez: From where you guys said how
much of A role is that going to
2f8b3a32-f44d-4180-9d33-060c94098203/1730-1
Johnnie Martinez: play?
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Johnnie Martinez: From how much of A concern
should that be as we start kind
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Johnnie Martinez: of forecasting the equipment
finance sector for 2025?
2f8b3a32-f44d-4180-9d33-060c94098203/1749-0
Rick Remiker: Well, I think it could be.
2f8b3a32-f44d-4180-9d33-060c94098203/1762-0
Rick Remiker: It could be wide-ranging and as
we sit here today on in mid
2f8b3a32-f44d-4180-9d33-060c94098203/1762-1
Rick Remiker: January.
2f8b3a32-f44d-4180-9d33-060c94098203/1799-0
Rick Remiker: We don't know what we don't know
and no one does, to be honest,
2f8b3a32-f44d-4180-9d33-060c94098203/1799-1
Rick Remiker: at this point, I think what you
have to be concerned with is not
2f8b3a32-f44d-4180-9d33-060c94098203/1799-2
Rick Remiker: only, you know, the Trump
administration tariffs, that
2f8b3a32-f44d-4180-9d33-060c94098203/1799-3
Rick Remiker: they potentially could impose,
but then what's the cause and
2f8b3a32-f44d-4180-9d33-060c94098203/1799-4
Rick Remiker: effect, what are the?
2f8b3a32-f44d-4180-9d33-060c94098203/1809-0
Rick Remiker: Retaliatory tariffs that might
be imposed.
2f8b3a32-f44d-4180-9d33-060c94098203/1813-0
Rick Remiker: By an EU country.
2f8b3a32-f44d-4180-9d33-060c94098203/1825-0
Rick Remiker: Or another country that could
impact somebody that needs
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Rick Remiker: machinery.
2f8b3a32-f44d-4180-9d33-060c94098203/1837-0
Rick Remiker: That's manufactured in Germany
or wherever it might be.
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Rick Remiker: So you know, the one thing that
I think we can be certain of in
2f8b3a32-f44d-4180-9d33-060c94098203/1870-1
Rick Remiker: in the tariff environment is
there will be winners and
2f8b3a32-f44d-4180-9d33-060c94098203/1870-2
Rick Remiker: losers, but it's a bit difficult
to exactly predict who's going
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Rick Remiker: to be the winner and who's going
to be the loser at this point.
2f8b3a32-f44d-4180-9d33-060c94098203/1872-0
Rick Remiker: In time.
2f8b3a32-f44d-4180-9d33-060c94098203/1914-0
Jim Jackson: And and I would say from my
standpoint, Johnny, you know the
2f8b3a32-f44d-4180-9d33-060c94098203/1914-1
Jim Jackson: thing to be, you know crystal
clear about and careful of is
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Jim Jackson: you know during you know 2020 we
came off a supply chain shortage
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Jim Jackson: due to the fact that you know
everyone was homesick with COV.
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Jim Jackson: And factory workers weren't
working.
2f8b3a32-f44d-4180-9d33-060c94098203/1943-0
Jim Jackson: You know, these tariffs could
have a similar impact with
2f8b3a32-f44d-4180-9d33-060c94098203/1943-1
Jim Jackson: supply chain shortages if if
indeed we don't have.
2f8b3a32-f44d-4180-9d33-060c94098203/1952-0
Jim Jackson: Companies here in the states
that are building equivalent
2f8b3a32-f44d-4180-9d33-060c94098203/1952-1
Jim Jackson: products.
2f8b3a32-f44d-4180-9d33-060c94098203/1996-0
Jim Jackson: Or, you know, it could even be
from a parts perspective that
2f8b3a32-f44d-4180-9d33-060c94098203/1996-1
Jim Jackson: it's more difficult to get parts
and parts are more expensive to
2f8b3a32-f44d-4180-9d33-060c94098203/1996-2
Jim Jackson: maintain existing pieces of
equipment which will obviously
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Jim Jackson: impact the industry and impact.
You know our ability to, you
2f8b3a32-f44d-4180-9d33-060c94098203/1996-4
Jim Jackson: know, hit the higher volumes
through those.
2f8b3a32-f44d-4180-9d33-060c94098203/2010-0
Jim Jackson: Equipment finance companies, if,
if the supply chain is again
2f8b3a32-f44d-4180-9d33-060c94098203/2010-1
Jim Jackson: disrupted.
2f8b3a32-f44d-4180-9d33-060c94098203/2030-0
Rick Remiker: You know, we touch on it in the
insights report and again, I'd
2f8b3a32-f44d-4180-9d33-060c94098203/2030-1
Rick Remiker: encourage listeners to pull that
report down.
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Rick Remiker: But the one trend that we can
definitely speak to is there's
2f8b3a32-f44d-4180-9d33-060c94098203/2047-1
Rick Remiker: been for US manufacturers.
2f8b3a32-f44d-4180-9d33-060c94098203/2075-0
Rick Remiker: There has been a definite trend
to diversify their supplier
2f8b3a32-f44d-4180-9d33-060c94098203/2075-1
Rick Remiker: base, so they're not dependent
only on China or only on one
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Rick Remiker: particular country and then
where possible, and where
2f8b3a32-f44d-4180-9d33-060c94098203/2075-3
Rick Remiker: feasible and practical.
2f8b3a32-f44d-4180-9d33-060c94098203/2077-0
Rick Remiker: To bring.
2f8b3a32-f44d-4180-9d33-060c94098203/2084-0
Rick Remiker: Some manufacturing back into the
United States.
2f8b3a32-f44d-4180-9d33-060c94098203/2139-0
Rick Remiker: States. So I think you'll see
that continued trend towards re
2f8b3a32-f44d-4180-9d33-060c94098203/2139-1
Rick Remiker: shoring to the United States
were practical but also
2f8b3a32-f44d-4180-9d33-060c94098203/2139-2
Rick Remiker: diversifying and not relying
strictly on China and having
2f8b3a32-f44d-4180-9d33-060c94098203/2139-3
Rick Remiker: manufacturing capabilities in
several countries. So that you
2f8b3a32-f44d-4180-9d33-060c94098203/2139-4
Rick Remiker: know significant tariffs or
geopolitical activities in a
2f8b3a32-f44d-4180-9d33-060c94098203/2139-5
Rick Remiker: particular country don't create
a.
2f8b3a32-f44d-4180-9d33-060c94098203/2145-0
Rick Remiker: Complete shutdown in their
supply chain.
2f8b3a32-f44d-4180-9d33-060c94098203/2152-0
Johnnie Martinez: Got you know that makes a ton of
sense.
2f8b3a32-f44d-4180-9d33-060c94098203/2187-0
Johnnie Martinez: And you know, as we start
looking at the the rest of the
2f8b3a32-f44d-4180-9d33-060c94098203/2187-1
Johnnie Martinez: year, we've talked about kind of
two of the the key challenges I
2f8b3a32-f44d-4180-9d33-060c94098203/2187-2
Johnnie Martinez: would just you know ask is there
is there any other thing that we
2f8b3a32-f44d-4180-9d33-060c94098203/2187-3
Johnnie Martinez: should be watching from a
challenging side and then we?
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Johnnie Martinez: Can get into some of the the
wider activity in the space.
2f8b3a32-f44d-4180-9d33-060c94098203/2211-0
Rick Remiker: Well, I think we've touched a
little bit on trade policy with
2f8b3a32-f44d-4180-9d33-060c94098203/2211-1
Rick Remiker: tariffs.
2f8b3a32-f44d-4180-9d33-060c94098203/2253-0
Rick Remiker: We talked briefly about monetary
policy as it relates to interest
2f8b3a32-f44d-4180-9d33-060c94098203/2253-1
Rick Remiker: rates and, you know, uncertainty
around if rates will fall if
2f8b3a32-f44d-4180-9d33-060c94098203/2253-2
Rick Remiker: they fall, how much will they
fall or could rates remain flat
2f8b3a32-f44d-4180-9d33-060c94098203/2253-3
Rick Remiker: or could they rise the other
part of monetary policy to be
2f8b3a32-f44d-4180-9d33-060c94098203/2253-4
Rick Remiker: mindful of is stren.
2f8b3a32-f44d-4180-9d33-060c94098203/2276-0
Rick Remiker: Of the US dollar and how that
impacts both imports and
2f8b3a32-f44d-4180-9d33-060c94098203/2276-1
Rick Remiker: exports. And then I think the
third leg of the stool.
2f8b3a32-f44d-4180-9d33-060c94098203/2277-0
Rick Remiker: So trade policy.
2f8b3a32-f44d-4180-9d33-060c94098203/2303-0
Rick Remiker: Monetary policy. And then I
think we need to be mindful of
2f8b3a32-f44d-4180-9d33-060c94098203/2303-1
Rick Remiker: tax policy, probably a net net
positive for most customers, but
2f8b3a32-f44d-4180-9d33-060c94098203/2303-2
Rick Remiker: something to be mindful of
heading into 2025.
2f8b3a32-f44d-4180-9d33-060c94098203/2309-0
Johnnie Martinez: Patrick, OK, that makes a ton of
sense.
2f8b3a32-f44d-4180-9d33-060c94098203/2347-0
Jim Jackson: I I think the other thing I
would add to that, Rick, if if I
2f8b3a32-f44d-4180-9d33-060c94098203/2347-1
Jim Jackson: could, you know we and not that
they'll have us you know direct
2f8b3a32-f44d-4180-9d33-060c94098203/2347-2
Jim Jackson: impact but but certainly
something to keep an eye on as
2f8b3a32-f44d-4180-9d33-060c94098203/2347-3
Jim Jackson: the geopolitical conflicts that
are going on in the world right.
2f8b3a32-f44d-4180-9d33-060c94098203/2358-0
Jim Jackson: Now we, you know, we still have
issues in Europe.
2f8b3a32-f44d-4180-9d33-060c94098203/2361-0
Jim Jackson: We still have issues in the
Middle East.
2f8b3a32-f44d-4180-9d33-060c94098203/2387-0
Jim Jackson: Who knows what's going to, you
know, take place with Taiwan and
2f8b3a32-f44d-4180-9d33-060c94098203/2387-1
Jim Jackson: China, but you know, certainly
things to consider along the way
2f8b3a32-f44d-4180-9d33-060c94098203/2387-2
Jim Jackson: as these tend to take a little
bit of focus off.
2f8b3a32-f44d-4180-9d33-060c94098203/2415-0
Jim Jackson: You know the US economy and and
put it squarely in the rest of
2f8b3a32-f44d-4180-9d33-060c94098203/2415-1
Jim Jackson: the world which you know can
obviously impact our ability to
2f8b3a32-f44d-4180-9d33-060c94098203/2415-2
Jim Jackson: continue to do business and and
be successful.
2f8b3a32-f44d-4180-9d33-060c94098203/2417-0
Jim Jackson: So something else to consider.
2f8b3a32-f44d-4180-9d33-060c94098203/2428-0
Johnnie Martinez: Gotcha. No, that that is also
something that I yeah, I don't
2f8b3a32-f44d-4180-9d33-060c94098203/2428-1
Johnnie Martinez: think it's mentioned enough.
2f8b3a32-f44d-4180-9d33-060c94098203/2449-0
Johnnie Martinez: I've heard a lot more mentioned
over the past, maybe six months
2f8b3a32-f44d-4180-9d33-060c94098203/2449-1
Johnnie Martinez: or so that you know, the
geopolitical aspect is something
2f8b3a32-f44d-4180-9d33-060c94098203/2449-2
Johnnie Martinez: that even for the US firms, they
have to account for.
2f8b3a32-f44d-4180-9d33-060c94098203/2481-0
Johnnie Martinez: And so I I think you for
mentioning that one other thing
2f8b3a32-f44d-4180-9d33-060c94098203/2481-1
Johnnie Martinez: I want to touch on and this can
be a a positive or a negative.
2f8b3a32-f44d-4180-9d33-060c94098203/2481-2
Johnnie Martinez: And I I say it that way, just
because you mentioned as well
2f8b3a32-f44d-4180-9d33-060c94098203/2481-3
Johnnie Martinez: earlier Rick, the the Madison
capital aspect.
2f8b3a32-f44d-4180-9d33-060c94098203/2490-0
Johnnie Martinez: One of the things they mentioned
in their.
2f8b3a32-f44d-4180-9d33-060c94098203/2525-0
Johnnie Martinez: You know, closing was technology
cost being a factor in their
2f8b3a32-f44d-4180-9d33-060c94098203/2525-1
Johnnie Martinez: survival, ability in the
equipment finance space. With
2f8b3a32-f44d-4180-9d33-060c94098203/2525-2
Johnnie Martinez: that in mind, what is technology
sort of look like especially as
2f8b3a32-f44d-4180-9d33-060c94098203/2525-3
Johnnie Martinez: we start getting into the rest
of this year?
2f8b3a32-f44d-4180-9d33-060c94098203/2548-0
Johnnie Martinez: I know AI is kind of the
buzzword, but there's so much
2f8b3a32-f44d-4180-9d33-060c94098203/2548-1
Johnnie Martinez: happening in the technology side
to account for what should we
2f8b3a32-f44d-4180-9d33-060c94098203/2548-2
Johnnie Martinez: look at as it continues to
affect the industry in 2025?
2f8b3a32-f44d-4180-9d33-060c94098203/2566-0
Well, I think that there's a
market shift that's happening
2f8b3a32-f44d-4180-9d33-060c94098203/2566-1
when we're talking about
technology within organizations.
2f8b3a32-f44d-4180-9d33-060c94098203/2577-0
The technology team is just not
necessarily a function anymore.
2f8b3a32-f44d-4180-9d33-060c94098203/2587-0
It's becoming an integral
strategic partner in delivering.
2f8b3a32-f44d-4180-9d33-060c94098203/2590-0
A.
2f8b3a32-f44d-4180-9d33-060c94098203/2592-0
Businesses go to market.
2f8b3a32-f44d-4180-9d33-060c94098203/2610-0
And value proposition. And So
what we're seeing right now is a
2f8b3a32-f44d-4180-9d33-060c94098203/2610-1
confluence of things. One, a lot
of companies.
2f8b3a32-f44d-4180-9d33-060c94098203/2642-0
Now are upgrading their existing
lease systems and see you seeing
2f8b3a32-f44d-4180-9d33-060c94098203/2642-1
a lot of that working on. You're
seeing also a lot of work around
2f8b3a32-f44d-4180-9d33-060c94098203/2642-2
AI and I don't believe that it
is a buzzword.
2f8b3a32-f44d-4180-9d33-060c94098203/2666-0
The there is a lot of activity
about bringing AI into companies
2f8b3a32-f44d-4180-9d33-060c94098203/2666-1
and becoming a partner, helping
work get done better, faster,
2f8b3a32-f44d-4180-9d33-060c94098203/2666-2
more efficiently.
2f8b3a32-f44d-4180-9d33-060c94098203/2674-0
And I think we're only going to
see that grow as different
2f8b3a32-f44d-4180-9d33-060c94098203/2674-1
forms.
2f8b3a32-f44d-4180-9d33-060c94098203/2694-0
Of AI starts to be developed so
Gen. AI was the big thing when
2f8b3a32-f44d-4180-9d33-060c94098203/2694-1
November 2023.
2f8b3a32-f44d-4180-9d33-060c94098203/2701-0
Right when that first came out,
ChatGPT.
2f8b3a32-f44d-4180-9d33-060c94098203/2740-0
Now people are using those tools
everyday, whether or not they're
2f8b3a32-f44d-4180-9d33-060c94098203/2740-1
crafting letters to a client or
what have you. Now the new part
2f8b3a32-f44d-4180-9d33-060c94098203/2740-2
about AI is a gentic AI, and
this is a gentic AI basically is
2f8b3a32-f44d-4180-9d33-060c94098203/2740-3
artificial intelligence, which
has the ability to make
2f8b3a32-f44d-4180-9d33-060c94098203/2740-4
decisions.
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And so you're going to see that
start to take off.
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And improve, I believe different
processes around the leasing
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cycle as that technology is
deployed and AI is just gonna
2f8b3a32-f44d-4180-9d33-060c94098203/2780-2
build on itself and there's
gonna be a next generation and a
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next generation.
2f8b3a32-f44d-4180-9d33-060c94098203/2794-0
So I think it's very
transformative and the function
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in of itself is becoming much
more strategic.
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Rick Remiker: You know, Johnny, I think the
other, the other area that that
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Rick Remiker: scale really becomes a big
factor in is you know you'll see
2f8b3a32-f44d-4180-9d33-060c94098203/2838-2
Rick Remiker: mergers and acquisitions within
the banking space and that's
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Rick Remiker: driven by technology and the
need to spend those technology
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Rick Remiker: dollars over a larger customer
base and.
2f8b3a32-f44d-4180-9d33-060c94098203/2858-0
Rick Remiker: A larger deposit base, so you
know the regulatory environment
2f8b3a32-f44d-4180-9d33-060c94098203/2858-1
Rick Remiker: is probably ripe for increased
bank mergers and acquisitions
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Rick Remiker: and again.
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Rick Remiker: Driven by the need for scale.
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Johnnie Martinez: That's it.
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Johnnie Martinez: I was.
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Johnnie Martinez: I was actually gonna gonna ask
Jim around something similar,
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Johnnie Martinez: you know, with that we're
bringing up, you know, there's
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Johnnie Martinez: gonna be generations of AI
usage.
2f8b3a32-f44d-4180-9d33-060c94098203/2896-0
Johnnie Martinez: Is that something that is being
accounted for in the M and a
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Johnnie Martinez: space?
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Johnnie Martinez: You know, some companies being
very far along in some companies
2f8b3a32-f44d-4180-9d33-060c94098203/2907-1
Johnnie Martinez: being at very base levels.
2f8b3a32-f44d-4180-9d33-060c94098203/2914-0
Johnnie Martinez: Does that change maybe how those
M and a conversations start to
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Johnnie Martinez: happen?
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Jim Jackson: Yeah, I haven't seen much of
that yet.
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Jim Jackson: Obviously, AI still in sort of
the the infancy infancy stage.
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Jim Jackson: So you know most of the M and a
activity now continues to focus
2f8b3a32-f44d-4180-9d33-060c94098203/2975-1
Jim Jackson: on what it always has strength
of the management team, the
2f8b3a32-f44d-4180-9d33-060c94098203/2975-2
Jim Jackson: profitability of the company,
the ability, the company to grow
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Jim Jackson: their business etcetera,
etcetera.
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Jim Jackson: So I'm sure it's just a matter
of time.
2f8b3a32-f44d-4180-9d33-060c94098203/2992-0
Jim Jackson: Obviously the the correct AI
applications will serve not only
2f8b3a32-f44d-4180-9d33-060c94098203/2992-1
Jim Jackson: to help companies grow their
businesses, but.
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Jim Jackson: Also, do it more efficiently and
more effectively with likely
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Jim Jackson: fewer full time employees.
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Jim Jackson: And do it more accurately.
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Jim Jackson: So I would imagine that's that's
going to be another leg in the
2f8b3a32-f44d-4180-9d33-060c94098203/3028-1
Jim Jackson: stool that people will consider
as we go forward.
2f8b3a32-f44d-4180-9d33-060c94098203/3050-0
Jim Jackson: It's just still a bit at the
infancy stage right now, so it's
2f8b3a32-f44d-4180-9d33-060c94098203/3050-1
Jim Jackson: it's it's a consideration, but I
wouldn't say it's a major factor
2f8b3a32-f44d-4180-9d33-060c94098203/3050-2
Jim Jackson: just yet.
2f8b3a32-f44d-4180-9d33-060c94098203/3085-0
Johnnie Martinez: Hey, understood. And as we we
sort of get into the end of
2f8b3a32-f44d-4180-9d33-060c94098203/3085-1
Johnnie Martinez: this, I know this report is so
comprehensive and touches on so
2f8b3a32-f44d-4180-9d33-060c94098203/3085-2
Johnnie Martinez: many different things that we
could discuss. But I want to be
2f8b3a32-f44d-4180-9d33-060c94098203/3085-3
Johnnie Martinez: valuable with with your time and
obviously the listeners time if
2f8b3a32-f44d-4180-9d33-060c94098203/3085-4
Johnnie Martinez: we could.
2f8b3a32-f44d-4180-9d33-060c94098203/3108-0
Johnnie Martinez: Go through and kind of some some
key takeaways, distillation,
2f8b3a32-f44d-4180-9d33-060c94098203/3108-1
Johnnie Martinez: maybe one or two from each of
you of things that you know
2f8b3a32-f44d-4180-9d33-060c94098203/3108-2
Johnnie Martinez: sections in the report.
2f8b3a32-f44d-4180-9d33-060c94098203/3122-0
Johnnie Martinez: Key things that you learn while
putting it together that the
2f8b3a32-f44d-4180-9d33-060c94098203/3122-1
Johnnie Martinez: reader should be aware of and
you know they can.
2f8b3a32-f44d-4180-9d33-060c94098203/3131-0
Johnnie Martinez: They can go in and look at the
the report themselves.
2f8b3a32-f44d-4180-9d33-060c94098203/3138-0
Johnnie Martinez: Of them trying to get the the
more macro view of it.
2f8b3a32-f44d-4180-9d33-060c94098203/3141-0
Johnnie Martinez: Wait a few would start.
2f8b3a32-f44d-4180-9d33-060c94098203/3175-0
Rick Remiker: Well, I would start with, you
know, watch for the continued
2f8b3a32-f44d-4180-9d33-060c94098203/3175-1
Rick Remiker: reemergence of Banks re entering
the space. More than likely with
2f8b3a32-f44d-4180-9d33-060c94098203/3175-2
Rick Remiker: a little more pricing discipline
and probably a little more
2f8b3a32-f44d-4180-9d33-060c94098203/3175-3
Rick Remiker: measured balance sheet growth
focused predominantly on
2f8b3a32-f44d-4180-9d33-060c94098203/3175-4
Rick Remiker: customers.
2f8b3a32-f44d-4180-9d33-060c94098203/3193-0
Rick Remiker: So I don't think that it's an
end to the glory days of of
2f8b3a32-f44d-4180-9d33-060c94098203/3193-1
Rick Remiker: independence and captives, but I
think you'll see 2025.
2f8b3a32-f44d-4180-9d33-060c94098203/3200-0
Rick Remiker: The banks will come back,
particularly the regional banks
2f8b3a32-f44d-4180-9d33-060c94098203/3200-1
Rick Remiker: will come back.
2f8b3a32-f44d-4180-9d33-060c94098203/3204-0
Rick Remiker: Back in a much stronger fashion.
2f8b3a32-f44d-4180-9d33-060c94098203/3223-0
Jim Jackson: Yeah, Johnny, I'd say from my
standpoint on the M and a
2f8b3a32-f44d-4180-9d33-060c94098203/3223-1
Jim Jackson: market, you know we're expecting
a strong M and a market.
2f8b3a32-f44d-4180-9d33-060c94098203/3229-0
Jim Jackson: I think there's a lot of things
in our favor.
2f8b3a32-f44d-4180-9d33-060c94098203/3239-0
Jim Jackson: The caution again is keep an eye
on the interest rates.
2f8b3a32-f44d-4180-9d33-060c94098203/3243-0
Jim Jackson: Let's see what the Fed does.
2f8b3a32-f44d-4180-9d33-060c94098203/3271-0
Jim Jackson: Let's hope we can continue on
our course to have a soft
2f8b3a32-f44d-4180-9d33-060c94098203/3271-1
Jim Jackson: landing and the interest rates
behave so that we can continue
2f8b3a32-f44d-4180-9d33-060c94098203/3271-2
Jim Jackson: to see some progress in the M
and a front in 25.
2f8b3a32-f44d-4180-9d33-060c94098203/3279-0
And I would just throw in one
cautionary note.
2f8b3a32-f44d-4180-9d33-060c94098203/3310-0
You know the industry has
benefited from some very strong
2f8b3a32-f44d-4180-9d33-060c94098203/3310-1
credit quality over the last
handful of years and I think
2f8b3a32-f44d-4180-9d33-060c94098203/3310-2
it's just time now where we're
starting to see potentially some
2f8b3a32-f44d-4180-9d33-060c94098203/3310-3
stress on portfolio.
2f8b3a32-f44d-4180-9d33-060c94098203/3314-0
So keep a watchful eye.
2f8b3a32-f44d-4180-9d33-060c94098203/3336-0
We're not concerned that there's
going to be any big credit
2f8b3a32-f44d-4180-9d33-060c94098203/3336-1
crunch or crisis out there, but
just start to just start to pay
2f8b3a32-f44d-4180-9d33-060c94098203/3336-2
a little more attention on the
credit book.
2f8b3a32-f44d-4180-9d33-060c94098203/3346-0
Johnnie Martinez: Caviano that that all makes a
bunch of sense.
2f8b3a32-f44d-4180-9d33-060c94098203/3359-0
Johnnie Martinez: And you have so much of it is,
you know, you can do the due
2f8b3a32-f44d-4180-9d33-060c94098203/3359-1
Johnnie Martinez: diligence on the front end.
2f8b3a32-f44d-4180-9d33-060c94098203/3362-0
Johnnie Martinez: It's less problems on the back
end.
2f8b3a32-f44d-4180-9d33-060c94098203/3366-0
Rick Remiker: Absolutely.
2f8b3a32-f44d-4180-9d33-060c94098203/3365-0
There you go.
2f8b3a32-f44d-4180-9d33-060c94098203/3398-0
Johnnie Martinez: Alright. Well, with that all in
mind, I would just say if is
2f8b3a32-f44d-4180-9d33-060c94098203/3398-1
Johnnie Martinez: there anything else that our
listeners should know about the
2f8b3a32-f44d-4180-9d33-060c94098203/3398-2
Johnnie Martinez: report or the Alta group and
then obviously they can read the
2f8b3a32-f44d-4180-9d33-060c94098203/3398-3
Johnnie Martinez: the reporting itself and but
anything else in particular that
2f8b3a32-f44d-4180-9d33-060c94098203/3398-4
Johnnie Martinez: stands out that we should.
2f8b3a32-f44d-4180-9d33-060c94098203/3401-0
Johnnie Martinez: Discuss at this moment.
2f8b3a32-f44d-4180-9d33-060c94098203/3421-0
Rick Remiker: Again, go to thealtagroup.com
and pull down the 2025 Alta
2f8b3a32-f44d-4180-9d33-060c94098203/3421-1
Rick Remiker: Group Insights report.
2f8b3a32-f44d-4180-9d33-060c94098203/3426-0
Rick Remiker: I think it'll be a excellent
5-10 minute read.
2f8b3a32-f44d-4180-9d33-060c94098203/3434-0
Johnnie Martinez: Alright, well, I thank all three
of you for Jim.
2f8b3a32-f44d-4180-9d33-060c94098203/3441-0
Johnnie Martinez: Are you gonna add something?
Sorry.
2f8b3a32-f44d-4180-9d33-060c94098203/3470-0
Jim Jackson: No, I was just going to also say
and once once you go to the
2f8b3a32-f44d-4180-9d33-060c94098203/3446-0
Johnnie Martinez: Hmm.
2f8b3a32-f44d-4180-9d33-060c94098203/3470-1
Jim Jackson: website and pull down the report
and read it, obviously if you
2f8b3a32-f44d-4180-9d33-060c94098203/3470-2
Jim Jackson: have questions about the report,
you know, I'd encourage
2f8b3a32-f44d-4180-9d33-060c94098203/3470-3
Jim Jackson: everyone. Our contact
information is out on the
2f8b3a32-f44d-4180-9d33-060c94098203/3470-4
Jim Jackson: website.
2f8b3a32-f44d-4180-9d33-060c94098203/3479-0
Jim Jackson: Feel free to call Valerie or
Rick or myself.
2f8b3a32-f44d-4180-9d33-060c94098203/3500-0
Jim Jackson: We'll be happy to explain
anything that maybe isn't quite
2f8b3a32-f44d-4180-9d33-060c94098203/3500-1
Jim Jackson: clear or expand on any of the
discussion items in there as as
2f8b3a32-f44d-4180-9d33-060c94098203/3500-2
Jim Jackson: the reader would see fit.
2f8b3a32-f44d-4180-9d33-060c94098203/3502-0
Jim Jackson: So we're happy to help.
2f8b3a32-f44d-4180-9d33-060c94098203/3518-0
And Johnnie thanks for having
us. As your guests on the dig.
2f8b3a32-f44d-4180-9d33-060c94098203/3525-0
We really appreciate the
opportunity to connect with you
2f8b3a32-f44d-4180-9d33-060c94098203/3525-1
and your listeners.
2f8b3a32-f44d-4180-9d33-060c94098203/3529-0
Johnnie Martinez: Of course.
2f8b3a32-f44d-4180-9d33-060c94098203/3536-0
Johnnie Martinez: Yes, I appreciate having all
three of you on.
2f8b3a32-f44d-4180-9d33-060c94098203/3541-0
Johnnie Martinez: I thank you so much for your
time today.
2f8b3a32-f44d-4180-9d33-060c94098203/3545-0
Rick Remiker: Thank you.