The problem: Bankers Trust has spent the better part of a century building relationships with its business banking customers. But there’s a hitch. Building that relationship to get their deposits, their treasury management, their lending — can take three years or longer, said Mike Wilson, senior vice president and chief lending officer for Bankers Trust Co.

And, once you get it, those customers might have a special need that takes them to another lender.

“We’ve learned that the business development timelines for us tend to be very long. … However, if we want to get an opportunity just to get started with a new customer, putting together an equipment finance opportunity is a terrific way to gain that foothold,” Wilson said.

The innovation: Bankers Trust Equipment Finance is a way to address that problem.

Among other things, it shows that at age 101, Bankers Trust remains nimble.

From the practical banking side, it provides a means to do things the Bankers Trust way — that means managing the risk side of what can be such a risky business line for banks that it draws special attention from regulators — and still expand the services it offers customers.

Equipment finance typically has been the domain of large national and regional banks. Folks at Bankers Trust believe they are the only lender in Greater Des Moines offering the service.

“I’ve been at the bank since April of last year, you know, but I know [Bankers Trust President and CEO] Don Coffin had been thinking about this for some time. The truth of the matter is it’s because a significant percentage of our customer base, even customers that have been our customers for 20, 30 years, is leasing from somebody in some form,” Wilson said. “So you know when you’re thinking about pieces of the pie that you can bring to the table to help customers and meet their needs, equipment finance clearly was an opportunity.”

Equipment finance also is a way to attract new banking customers, Wilson said.

How it happened: Wilson joined Bankers Trust in April 2017, taking on the role of chief lending officer that had been held by Coffin.

While transitioning into his new role with the pending retirement of former Bankers Trust President and CEO Suku Radia, Coffin was exploring new opportunities for the bank. In recent years, Coffin pushed the bank to become a premier U.S. Small Business Administration lender and created a team to reach that goal. At the same time, he was exploring the possibility of entering equipment finance.

Wilson said the bank was in contact with regulators from the beginning of discussions to form an equipment finance division. Bank officials met with “trusted advisers” in the community to learn more.

More importantly, Bankers Trust spent at least a year looking for the right person to lead the division. Integrity comes immediately to mind as a needed trait. Wilson noted that one applicant boasted that he knew how to bury a big loan with a high interest rate. He didn’t make the cut.

In May, Eric Drexler joined Bankers Trust as the managing director of equipment finance. He brought more than 16 years’ experience in the sector, including work with GE Capital, Wells Fargo & Co. and Fifth Third Bank. He worked the Midwest equipment finance operations for the lenders.

Drexler brings his own network of experts who understand the leasing needs of various industries.

Wilson and Drexler are quick to say that the finance operation will work with specialists in various categories of leasing — IT, fixtures and furnishings, manufacturing, for example — to make sure customers get what they need. Bankers Trust will perform a role it knows best, handling the more traditional debt arrangements that will finance the deals.

“When we first talked about creating an equipment finance function at the bank, we were really focused on only those equipment finance products that didn’t bring residual risk with them to Bankers Trust,” Wilson said. “We weren’t going to buy the equipment and then take the responsibility to market it. There are companies out there that do that; that’s their expertise.”

Drexler said, “We are very committed to what our customers’ needs are, but that’s just a risk that we’re not willing to take.”

“The beautiful thing, though, is that our value and what we bring in relationships is to truly understand what the need is and then we’ll match that need with the right solution,” Wilson said. “In other words, what we sell is driven by what our customers need, not by what solutions we want to sell. We are very much in touch with what our core is and what we’re best at, and that tends to be traditional debt-related type instruments.”

The payoff: For customers, a benefit could be finding out that leasing is a way to preserve cash. Wilson pointed out that many companies make equipment purchases out of their operating lines of credit. Leasing can be a way to preserve that cash.

The range of customers is immense, including medical providers, municipalities and companies with large IT needs.

For Bankers Trust, there is the immediate payoff of earning the difference on loan spreads, the difference between the cost of money to the bank and the cost to the borrower.

In some cases, Bankers Trust will earn fees from finding specialists in particular areas of leasing that the bank considers too risky.

“Everybody that we have partnered up with is ethical and they’re experts in what they do. We’re really going to make sure that our customers are well cared for; that that is our main goal,” Drexler said.

At some point, Bankers Trust will make its equipment leasing division a wholly owned subsidiary.