The
Lenders have been scrambling to address the needs of cash-strapped commercial clients and unemployed customers. Leaders are retooling their business strategies to reflect changing conditions.
Department managers and many front-line employees are still adjusting to working remotely. Work days are getting longer and more tasks must be handled on the weekends.
First American Bank in Elk Grove Village, Ill., is a good example.
Most of the $5.3 billion-asset bank’s employees are working remotely and putting in far more hours than they had prior to the pandemic. Bankers are extending their shifts to provide guidance to customers with an array of crisis-induced financial challenges.
“We’re finding our people working very long hours, seven days a week,” said Tom Wells, First American's chairman and CEO.
“We are concerned about stress and exhaustion,” Wells said of his staff. “But they’ve been pounding out the work because it really needs to get done to save companies and jobs.”
Bigger banks are also adapting.
Bank of America, which instructed more than 150,000 employees to work from home, has shipped about 90,000 laptops since mid-February to equip its staff, Chairman and CEO Brian Moynihan said during the Charlotte, N.C., company’s quarterly earnings call.
Since April 3, banks of all sizes have been inundated by a surge of applications for the $349 billion Paycheck Protection Program. The Small Business Administration approved nearly 1.7 million loans before the initial funds ran out, and
Many bankers worked weekends, even Easter Sunday, navigating initial glitches in the SBA’s systems and scrambling to get applications approved before the program’s funding dried up.
“Customers are terribly anxious and scared because in many cases their businesses or livelihoods could go away,” Wells said.
First American approved more than $280 million in Paycheck Protection loans, spanning nearly 100 clients in markets such as Miami, Milwaukee and Chicago.
The staff at Citizens Bank of Edmond in Oklahoma also worked long shifts handling applications.
Bankers “fully embraced their role as economic first responders, working nearly all night for 14 consecutive days to authorize” more than 230 loans, said Jill Castilla, the $302 million-asset Citizens’ president and CEO. The bank’s median loan amount was $30,000; borrowers have included hair salons, restaurants and independent contractors.
“I received text messages and calls as late as midnight every day,” Castilla said. “There’s still incredible need and more funding has to be directed to the program.”
Aside from Paycheck Protection, the economic and social turmoil caused by the pandemic has jumbled the working world for bankers.
Around Newman Grove, Neb., where agriculture reigns, known virus cases are few and far between. But social distancing efforts intended to keep it that way have hurt a range of businesses such as the local cafe and small shops.
Farmers are feeling particularly vulnerable. They already were struggling with weak crop prices and fallout from trade wars. Uncertainty caused by the pandemic has heaped more pressure on crop, ethanol and livestock prices, threatening farm profits. When farmers lose money, so do equipment, feed and other businesses that help serve them.
Jeffrey Gerhart, chairman of the $32.7 million-asset First Newman Grove Bankshares, said the bank’s staff is working in earnest with every customer on a case-by-case basis, tailoring responses to each situation, deferring loan payments in some cases and making emergency loans in others.
“This thing just came literally out of the blue,” Gerhart said. “Everybody just wants to get a handle on what’s going on, and we’re doing everything we can.”
While rural Nebraska will manage through, Patrick Gerhart, the bank’s president, said he is worried that businesses in Midwest cities that rely on heavy foot traffic may not. “There are going to be a lot of them that just aren’t going to make it back from this,” he said.
To comply with social distancing mandates, employees at Tri-State Bank in Elkhart, Kan., have worked one week on, one week off, said Shan Hanes, the $122 million-asset bank’s president and CEO.
Under that model “you are doing twice as much work that whole week,” Hanes said. “It’s a lot of stress for people, we know. But we have to be here to help people.”
Tri-State’s focus, for now, has shifted from traditional, steady commercial lending to assessing and addressing clients’ emergency credit needs.
Leadership teams have also been forced to adapt.
Top executives at Washington Trust Bank in Spokane hold daily meetings at 6 a.m. to make sense of a fluid environment in their hard-hit market, said Jack Heath, the $7.2 billion-asset bank’s president and chief operating officer.
Days end late in the evening after addressing an evolving array of challenges, including the decision to close a branch after an employee tested positive for COVID-19. Crews deep cleaned and disinfected the entire building, and the branch reopened within 24 hours.
Washington Trust reassigned staff to increase the size of its SBA team from four people to 30 in a matter of days to handle Paycheck Protection volume. The bank continues to cross-train scores of other employees to meet emergency needs.
“We made more loans in the last week than we did in all of the prior two years,” Heath said, noting that lenders processed 3,800 applications totaling $1.1 billion. The bank’s entire loan portfolio on Dec. 31 was $4.6 billion.
“The demand has been staggering,” Heath said. “A big concern is that our people on the front lines need a break. But there’s such a sense of urgency, everyone just wants to keep pushing forward. We’re on fumes, but we’re also rallying to do whatever we can to help get us all to the other side of this.”
Executives at Spirit of Texas Bancshares in Conroe also had to react quickly when Dean Bass, the chairman and CEO, was briefly hospitalized after
The pandemic has also spurred management teams to
Bank of America increased its child care support, allowing employees to hire relatives and other caregivers to address school and daycare closures, Moynihan said. The $2.6 trillion-asset company also hired 2,000 people in March to boost capacity, especially in consumer-related areas.
Employees “are on the front lines of this effort, including daily engagement with the clients,” Moynihan said during the earnings call. “To be able to do all these great things, to support clients, our first priority … was to address the health and safety of our teammates.”
While more tough times are ahead, bankers said they are proud of what they’ve been able to accomplish in the past few weeks.
“It’s really incredible what people have done to pull this all together — both banks and the government,” said Wells at First American. “Plenty of problems that had to be solved on the fly, but they got solved. And we’re seeing a commitment to just getting things done across the board — to bridge the gulf between now and the recovery.”
