Michael Zahaby

Summary

Innovative, consultative and hands-on Senior Management Finance Professional with deep experience in debt markets, including structuring, lending, portfolio surveillance and risk management, credit policies and procedures, loan review, and work-out of Distressed and Special Situation assets. Demonstrated experience in Leveraged and Acquisition Finance, including extensive debt structuring, negotiation and closing of complex acquisitions, syndicated credits and recapitalizations. A high-energy, proven self-starter that led the development and launch of several successful new lending lines of business. Able to motivate staff; gain organizational buy-in while being a change agent; and manage cross-functional teams and initiatives.

Work History

Work History
Feb 2005 - Dec 2007

Chief Credit Officer

Morgan Stanley Commercial Financial Services, Inc.

Responsible for the safety and soundness of the small business, middle-market, and franchise lending portfolio of this wholly owned subsidiary of MS&Co. Also responsible for credit policies and procedures, special assets/distressed portfolio, and chaired the Commercial Loans and Loan Quality Committees.

Major Accomplishments 

  • Readjusted service delivery standards, business credit model and credit policies to conform to the regulatory environment, and approved a record $350mm in new loans in 2007.
  • Successfully exited 25 “work-out” transactions aggregating $110mm with minimum impact on charge-offs, achieved zero charge-offs in the last 12 months, and introduced FAS114 methodology.
  • Reduced portfolio Loss Given Default probability by 100 bps in 18 months, achieved an overall portfolio WARR of 3.49, and adjusted the ALLL and overall policy to conform to BASEL II requirements.
  • Increased franchise lending business five fold in two years. 
  • Designed and rolled out a nationwide credit training program for field sales personnel
May 1999 - Nov 2004

Chief Credit Officer

Merrill Lynch Business Financial Services

Responsible for the P&L of three departments employing 30 professionals and one Senior Credit Officer; the credit quality and safety and soundness of a $10,400mm loan portfolio, and a $1,000mm Special Assets and Distressed portfolio. Chair, Credit and Loan Quality Committees. Possessed $25mm single signature authority.

Major Accomplishments:

  • Created a successful risk framework that translated the business owners’ vision into a value proposition encompassing predictability of approval, a high velocity model with de minimus NPAs, and a solid RAROC.
  • Established new lending standards and credit policies to conform to the regulatory environment, and redesigned the Credit Underwriting Memorandum template to focus on risks, mitigants, cash flows, and financial projections. Introduced a Moody’s-based customized financial modeling program.
  • Re-aligned business model, exited Small Business Credit (<$500m loan size) and Contractor Sector, and successfully completed the sale of two impaired loan portfolios, the first sale of its kind at Merrill Lynch.
  • Designed and initiated a Credit Review process for all credit granting areas, and personnel; format and methodology were adopted by MLBUSA. Launched a Loan Quality Process to survey portfolio soundness and arrest early negative trends in the portfolio.
  • Co-Chaired ML Credit Policy Re-Alignment Committee tasked with conforming firm-wide credit policies.
  • Formalized and implemented real estate and environmental lending policies and standards, and successfully negotiated an environmental insurance policy with AIG. Implemented a High Risk Industries List, and an LFT policy with exposure limits to reduce and manage exposures to certain industries.
  • Designed a credit risk-rating matrix and converted a 9,500 customer portfolio to a new 10-point risk-rating scale.In 2001 tied the risk rating scales to risk based pricing, and to an automated ALLL Matrix. 
  • Led four successful safety and soundness exams.Developed strong relationships with banking regulators. 
  • Expanded business into middle-market leveraged and acquisition finance sectors. Built the portfolio from a $150mm base to $2,000mm in 4 years with less than 45bps in net charge-offs.
  • Introduced franchise, C-store, and beverage lending, and implemented underwriting standards, lending parameters and training programs. Portfolio grew to $300mm in 4 years with no charge-offs.
  • Led three diligence exercises to purchase three separate Distressed, and Special Situations portfolios aggregating >$100mm.
Feb 1984 - Mar 1999

Senior Vice President - Director

Senior Vice President/Director – Leveraged Finance            (1992-1999)

Senior Vice President - Head of Beverage Finance        (1996-1998)

Vice President – Manager, Philadelphia Middle Market  (1987-1992)

Assistant Vice President – South West Oil & Gas(1984-1987)

Major Accomplishments

  • Led and coached “deal teams” as a senior officer. Granted Level I Credit Authority.
  • Originated, structured, and syndicated Middle-Market transactions aggregating $250mm annually and generated approximately $15mm in annual fees.
  • Designated Team Leader in acquisition diligence exercises for four acquisition opportunities.
  • Appointed by Chief Credit Officer as Instructor and Mentor for new analysts in Bank Credit Training program
  • Formed a successful and highly profitable de novo lending practice, and staffed it with five professionals.
  • Developed $200mm in new business with $1mm in annual fees during the first 18 months.
  • Achieved national prominence, and was frequent guest speaker before various national and regional beverage associations on industry trends and consolidation.
  • Led Flagship Market, and was responsible for the market’s P&L; marketing strategy; a $1,400mm loan portfolio; 16 loan officers and the support staff.
  • Almost doubled total Commitments by capturing high quality customers displaced by local mergers.
  • Successfully started a new lending practice geared toward serving the banking needs of law firms.
  • Named to the bank’s Senior Credit Committee and the acquisition due diligence team.
  • As coverage and business development officer marketed credit and non-credit services to Oil and Gas, Chemical, and Petrochemical companies in new and remote territory for the bank. Increased accounts three-fold over two years. This successful effort led to the opening of a large Houston Edge Act and an LPO Office.
Dec 1978 - Jan 1984

Multi-Unit Franchise Owner

Wendy's International

Multi-unit Owner-Operator, responsible for site selection and development; store operations and purchasing; franchise marketing, media, and promotions, and the overall financial management and profitability of the units.

Jan 1977 - Nov 1978

Assistant Secretary

Manufacturers Hanover Trust Company

Successfully completing formal credit training program; assigned to US Multi-Nationals. First in training class to be promoted to Assistant Secretary.

Education

Education
Sep 1973 - Aug 1974

MBA

Thunderbird Global School of Management
Jun 1973

B.S.

Fisher School of Business - The Ohio State University