Five Questions With: Carlos DaCunha

CARLOS DACUNHA is senior vice president of middle market banking at Webster Bank. / COURTESY WEBSTER BANK
CARLOS DACUNHA is senior vice president of middle market banking at Webster Bank. / COURTESY WEBSTER BANK

Carlos DaCunha is senior vice president of middle market banking at Webster Bank. He specializes in commercial lending with a niche focus on the fishing and solar industries. He talks with Providence Business News about trends he’s seeing in both industries and how they are different between Massachusetts and Rhode Island.
PBN: Can you tell our readers a little bit about what you focus on in commercial banking?
DACUNHA:
Webster’s commercial banking group focuses on providing customized credit and treasury management products and services to a diversified group of enterprises with annual revenues greater than $10 million. Our approach is to develop engaging client relationships with consistent feedback and surety of experience, where we become a valued resource of ideas and capital solutions for managers seeking a trusted banking partner to assist with their strategic objectives.
PBN: What trends are you seeing right now in the middle market?
DACUNHA:
In recent years, the middle market sector has outperformed the U.S. economy by growing revenues at about 7 percent annually, and employment at about 4 percent. As this segment grows, so does their need for more intricate banking products and services. Middle market companies typically allocate business capital differently than public companies. Typically, they are consistent users of bank credit services in their capital mix to reduce cost of capital. Middle market companies also value how their treasury operations can be automated to manage their liquidity flows, and are open to advice about value-added services and technology.
PBN: What trends are you seeing in the fishing industry?
DACUNHA:
According to a just released report by the National Marine Fisheries, commercial landings at U.S. ports are valued at $5.2 billion in 2015. This number includes $322 million at the Port of New Bedford, Mass., which has been the highest value port in the U.S. for the 16 consecutive years. Thousands of people work in the seafood industry, contributing to local, regional and global trade. With the goal of improved economic and ecological sustainability of U.S. fisheries, various catch share programs began to be implemented in the 1990s that enabled fishery management councils to establish the total amount of fish that can be caught based on sustainability criteria, and today roughly half of the fish caught in the U.S. are harvested from a fishery under catch share management. As such, fish harvesting has become a more predictable activity albeit conducted by fewer, but often better, capitalized participants. To that end, Webster has a history of providing capital solutions for the acquisition or refinancing of vessels and the most valuable Northeast Federal Fishery Permits, including participation in one of the largest scallop vessel and permit acquisitions in U.S. history. Likewise, Webster is an effective resource of ideas for the management of the industry’s Capital Construction Funds. The processing side of the seafood industry has numerous variations to its business model. Primary processors generally convert whole fish into fish fillets, steaks, or loins, or shuck or cook raw shellfish, or remove the edible meat. Secondary processors convert fresh or frozen fish and shellfish products with the enhancement from other ingredients into the final products that are available in retail stores and restaurants. This sector is complemented by a network of wholesale and distribution businesses that purchase seafood products from a variety of sources, store them, assemble the items into orders and deliver them to customers. We at Webster provide capital ideas and solutions for inventory and receivables’ investments, plant and equipment acquisition and refinancing, transportation equipment financing, treasury services for liquidity management, and advisory for mergers and acquisitions.
PBN: How about the solar industry?
DACUNHA:
At Webster, we provide capital ideas and solutions for solar system investments that promote electrical cost savings in a company’s manufacturing or production processes. For example, one of our clients that operates as a seafood processor with a fairly high reliance on electricity to fuel its production capacity has installed solar generation to reduce its utility costs (through a net metering agreement with the utility), and has benefited further from a) a 30 percent [tax credit] b) faster depreciation and c) the cash inflow from solar renewable energy credit monetizing. The seafood industry, which is increasingly vertically integrated, is particularly well positioned to benefit from the investment opportunities in solar energy because of the offsets to utility costs associated with their processing equipment and cold storage facilities, the benefits associated with favorable tax credits that could reduce taxable income.
PBN: Do those trends differ in Rhode Island compared with southeastern Massachusetts? Why or why not?
DACUNHA:
Massachusetts is a national leader in solar energy, with about 340 megawatts of capacity installed, ranking it fourth nationally, as compared with the 17 megawatts of installed capacity in Rhode Island that ranks it 32nd in the country. The most significant difference between these states’ programs is the production-based incentives and benefits offered in Massachusetts that, in addition to avoided electricity costs through net metering, also provide for a well-structured, successful SREC program. SRECs can be sold to retail electricity suppliers in Massachusetts (who are required by law to purchase certain levels of renewable energy), or “tradable” in open commodities markets, or ultimately sold in a back-stopped regulated auction with minimum prices that are set through legislation 10 years forward. Conversely, without this level of project monetizing benefit, the investor payback period is extended and that may have ultimately resulted in Rhode Island having had principally smaller project installations over the years.

No posts to display