Jim Plagge remarks that in his role as president and CEO of Bank Iowa, he doesn't directly manage customer relationships, but in 2020 he received a lot of direct calls from customers on news of the first round of Paycheck Protection Program loans to be offered during the pandemic. "They were looking for guidance," he recalls. "They asked, 'What should I do? I haven't really been impacted; I don't feel right about this.'"
OPPORTUNITY KNOCKED: The Paycheck Protection Program may have meant a lot of work for the Bank Iowa team, but Jim Plagge, president and CEO, says it also brought the bank new customers. (Courtesy of Bank Iowa)
And while in the early days of the pandemic, many didn't know how long it would last or what that might mean to businesses, Plagge recalls offering this insight: "Our consistent advice was that you don't know what's going to happen. We have no idea how this is going to impact you."
Of course, the pandemic lingered — and even now with the supply chain issues hitting many businesses, the Iowa lender may have been a bit ahead of the curve on the value of the PPP loans.
Bank Iowa did advise a range of business clients not to pass up the loan opportunity because of the rising uncertainty, and that was in the first round. When the second round of PPP loans arrived, farmers were part of the mix, expanding the program for the lender, too. Nationally, qualified farms garnered nearly $6 billion in PPP loan funds.
At the end of the two rounds, Bank Iowa had processed about 3,500 PPP loans with a volume of about $90 million. And the result? Bank Iowa recently ran the numbers and determined it had protected 11,872 Iowa jobs in the past two years.
The family-owned lender has 26 locations and more than $1.7 billion in assets, ranking the firm one of the leading independent ag banks in the state.
Although the PPP loans reached nearly every industry segment, these industries demonstrated the greatest needs, and this shows the number of jobs saved:
• Construction and real estate (2,313 jobs)
• Health care (2,224 jobs)
• Agriculture (1,866 jobs)
• Restaurant (1,103 jobs)
• Automotive (1,093 jobs)
No easy task
When the PPP loans were first offered, some major lenders, including Farm Credit, didn't move right away to take part. That was a challenge for businesses seeking loans, with many not getting a response from their usual lenders. Many turned to Bank Iowa.
"Clients of the larger nationwide banks — and, in some cases, Farm Credit — reached out to us, or we reached out to them once we knew this dynamic was in play," Plagge says. "We picked up some very nice business, and in some cases, we took on the entire banking relationship for the customers."
While the program brought in new customers, remember that the early days of the program happened during a pandemic. At the time, half of Bank Iowa's staff was working from home on a rotational basis, yet they handled the challenge. The system for initiating the loans had a few hiccups to start, but eventually things got rolling more smoothly — though not always.
"It took some of our team members staying up until two or three o’clock in the morning to upload loans when the Small Business Administration portal wasn't as clogged, and when it didn't crash," he recalls.
Yet overall, Plagge was pleased with how smoothly a quick-start government program was implemented. "If you'd have told me that this program was going to be able to pull off as many loans as it did in a shorter period of time, I would have said you're crazy," he says. "The SBA did a good job, and originators put forth the extra effort. From that standpoint I would call it a raging success."
The final step working with clients on the loan forgiveness portion of the program, which is now processing through SBA; Plagge says that process is going smoothly as well. The local community bank was able to move fast to help customers, and netted new ones at the same time. For Bank Iowa and its customers, PPP loans became a win-win situation.