2020 MidWestOne Financial Group, Inc. Annual Report

“We assembled a team of experts from different areas of the bank—the SBA department, the commercial lending department, the credit department—and very quickly came up with a process using technology that we already had that worked quite well,” explains Senior Regional President Mitch Cook. “And then when they restarted the program in late spring, we had a new software system which we had fully implemented inside of one week and went live with on the first day of the second round in late April. We got 670 loan approvals in one day. That was probably our biggest moment.” Cook believes the bank’s commitment to technol- ogy was central to the success of the bank’s PPP efforts. “I think what we learned is that you have to have a handle on your technology. We were able to jump way ahead of those who had not implemented any technology. We were able to connect directly to the SBA and that gave us a real advantage.” Another advantage, according to Senior Vice President and Manager of SBA Lending John Kimball, was the bank’s deep understanding of the SBA and its priorities and rules. “I think what worked well for us was that we were able to rely on a lot of deep SBA knowledge here at the bank,” Kimball says. “We understand the thinking and the motivations of the SBA, so we could anticipate some things that maybe the SBA didn’t make clear at the beginning. As a result we didn’t lose any momentum in the process.”

The PPP process required thinking about not only the customers’ interests, but the bank’s as well. The banks were the government’s distribution system for the relief program, and that meant taking on some unusual risks. “We were not relying on our traditional tools of credit underwriting to determine ability to repay,” Kimball explains. “We were relying on our trust in the U.S. government but were faced with a very complex set of rules that drove the program. It was all about maintaining that important balance so that we were helping our customers when they were at a vulnerable point while we were making sure we were protecting the bank. Because this was the bank’s money that went out the door.” Kimball is quick to point out that in the end, the PPP process was not primarily about challenges. It was about service. “As community bankers, this is probably one of the hardest and most important efforts that we’ve made. It’s been a real challenge. The program has really evolved rapidly. The rules were constantly changing and there was a lack of guidance,” he says. “But at the same time, it was one of the most important things we’ve done because we were literally throwing a lifeline to businesses that were sinking. You don’t often get a chance to have that big of an impact on the community.”

“We understand the thinking and the motivations of the SBA so we could anticipate some things that maybe the SBA didn’t make clear at the beginning. As a result, we didn’t lose any momentum in the process.”

— JOHN KIMBALL, SENIOR VICE PRESIDENT AND MANAGER OF SBA LENDING

Paycheck Protection Program

Here’s the challenge: Complete a remarkably complex task under punishing time constraints while the rules by which you are operating are constantly changing and every single person with a stake in the outcome—of whom there are so very many—is reaching out to you unceasingly. Sound difficult? Of course it does. And that’s what made MidWest One Bank’s exceptional work executing the Paycheck Protection Program (PPP), which provides loans to help small businesses keep their workforce employed, so impressive. From the very beginning, the staff of MidWest One was dedicated to untangling the rules—these instructions often appeared under the poetically oxymoronic title of “interim final rules”—so that they could provide expert guidance to the bank’s customers. “We were fielding a plethora of calls just due to the uncertainty about the program and what was happening in the economy,” says Chase Stafford, Senior Vice President and Regional Credit Officer. “Every customer was reaching out because things were getting shut down and so forth. We had to field all of the calls from people who had the sense that the program was up and running when in reality, it wasn’t. And so you’re working nonstop. You start in the early morning and work late into the night. And during the whole time that you’re doing that, everything is changing.” Despite the volume of incoming communication, the bank staff did not simply sit back and let the customers who needed help come to them.

“The bank proactively solicited customers’ applications, designed the program to meet their needs, and at the end of the day served a great number of our customers’ needs,” explains Gary Sims, Executive Vice President and Chief Credit Officer. “We were reaching out to our customers and explaining to them how to apply and when to apply. We definitely were a key partner in helping folks get their money.” Being proactive requires a significant amount of teamwork, especially when the project has so many layers of complexity. It also requires skilled leveraging of technology.

The Small Business Administration presented MidWest One Bank with an Impact Award in recognition of its outstanding contributions to Iowa’s small business community as a participating lender in the SBA’s Paycheck Protection Program. Pictured are left to right: Dawnelle Conley, Deputy District Director at U.S. Small Business Administration (SBA); Lori Day, Outreach and Marketing Specialist at SBA; Kyle Long, Second Vice President, Commercial Banking; Haley Foster, Senior Loan Servicing Representative; Gary Sims, Executive Vice President and Chief Credit Officer; Chase Stafford, Senior Vice President and Regional Credit Officer; Jayne Armstrong, District Director, Iowa District Office, SBA.

20 MidWest One Financial Group, Inc. 2020 Annual Report

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