Equity Bank launches aircraft finance division
Equity Bank, the Wichita, Kansas-based community bank, has launched an aircraft finance division.
The new division is being set up by Morgan Littell, who joins Equity Bank from UMB Financial.
Equity Bank, a wholly owned banking subsidiary of Equity Bancshares, was founded in November 2002 in Andover, Kansas. Although it was originally founded as a community bank, but following a series of mergers and acquisitions, it has grown over the last 17 years into a $4 billion community bank with 52 branches.
Littell says that its decision to enter aviation finance is partly due to its headquarters location in Wichita Kansas, but also due to its owner’s deep understanding of business aviation.
“The leadership team very much values business aviation,” says Littell. “They have a corporate airplane, so they use that, and it really helped them grow their business. They very much value business aviation.”
Another factor that played into the setting up of the division was that when the bank acquired other businesses, part of the portfolios acquired included business aircraft.
Littell was originally approached for the role by Craig Anderson, Equity Bank’s COO. Anderson had himself previously been at UMB, and had hired Littell before, again to set up its aviation finance division.
“Craig had talked to me about coming on board with Equity Bank,” says Littell. “So, I thought well, I’ve done it from scratch once. And you don’t get that opportunity every day, to start something from scratch.”
One of the biggest differences between Equity Bank and UMB is that Equity Bank works nationwide. Littell says that whilst UMB really likes to work inside its geographic market , the opportunity to set up a new aircraft finance division that would look at finance opportunities across the US was almost too good to turn down.
“Equity is open to financing across the US footprint,” says Littell. “So, to go somewhere that values airplanes, values business aviation, and the fact that I have worked with Craig previously, it was hard to say no.”
Littell says that the bank would mostly work in the $500,000 and up range when it comes to financing aircraft, and whilst she says that she would be open to looking at aircraft in the $40 million range, she concedes that it would be hard to compete with the more-established financiers in that range.
Littell says that to be competitive the bank needs to focus on transactions under $10 million, as above that figure some of the bigger players in the market start to take interest in deals and can start to be very aggressive on pricing.
For Littell, her favoured range is between $500,000 and $5 million, saying that around that price point, the entrepreneurs she meets really appreciate the extra knowledge and wisdom that she has built up over the last 20 years in the industry.
“They really just seem to appreciate any ideas or information that you can provide to them,” says Littell. “Maybe they don’t have an aviation tax attorney, so it’s really about making your network available to them. And I think that brings a lot of value to them.”
The bank doesn’t have any hard-and-fast rules on the age of the aircraft it will look at financing, with Littell saying that it will look at deals on a case-by-case basis. However, she does say that ideally any aircraft Equity does finance would be under 20 years old.
But she doesn’t rule out financing any older aircraft. “There are some aircraft out there that are very valuable for businesses and what their needs are,” she says. “So, if it fits for them, and it makes sense for us and we are secure in it, then I would consider it for sure.”