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During early mornings and weekends, F&M Bank handled hundreds of Paycheck Protection Program loans

SALISBURY — The sun had barely peeked above the horizon, but Steve Fisher was already awake.

It was around 7 a.m. on a Sunday morning in early April, a time when even CEOs of banks should be fast asleep in their beds. As Fisher sat in his living room, huddled around his cellphone in the pre-dawn light, sleep was the furthest thing from his mind.

On the other end of the line was Laura Osborne along with several other F&M bank employees. They had gathered via conference call at daybreak on a weekend to experience the moment together.

Osborne had been at her computer for hours the previous day, figuring out how to navigate the Small Business Administration’s makeshift online portal. It was finally time for the bank to submit its first Paycheck Protection Program loan application on behalf of a client. Although the job of punching in the application fell to Osborne, it had taken a massive team effort to get to that point.

After several minutes of anticipation, Osborne announced that the application had been submitted.

“I just remember euphoria going through,” Fisher said. “‘We got one. We got one. People were pounding desks. We were so excited.”

Then Osborne submitted a second application and a third, each one taking a little less time than the last.

“That process took hours to get that second one and that third one,” Fisher said. “But by 1 a.m. that night, Laura was banging them out because she and (F&M commercial banker) Chris Ratte had figured out the rhythm of it.”

Up until a few weeks before she submitted that first early morning PPP loan application, Osborne had spent her career at F&M bank on the deposit and project side of operations. She’d never submitted a loan before because it hadn’t been in her job description. But during a global pandemic, job descriptions become flexible.

When the federal government passed the CARES Act and created the Paycheck Protection Program last spring, Osborne’s role shifted along with the bank’s. F&M, which has been a pillar of the greater Rowan County community for more than a century, was charged with facilitating PPP loans to its clients. Almost overnight, the bank became the link between businesses and much-needed aid. 

The burden to administer the loan was heavy for all banks, and especially so for smaller, community financial institutions such as F&M that don’t have many hundreds of employees.

It was an all-hands-on-deck moment for the bank, and Osborne’s hands were needed.

“Steve knows that I can key pretty fast and I’m a quick learner,” Osborne said. “… I had never keyed a loan in my life and now I can say that I’ve keyed quite a few.”

Osborne typed in and submitted 329 PPP loan applications before the program closed for the first time in August. In total, F&M distributed $25 million in loans that impacted 3,500 employees in the greater Rowan County community. For the four months that the Paycheck Protection Program was open from April to August, F&M navigated vague rules and an outdated, overused online portal to help its clients benefit from the program. Now, with another round of PPP underway, the bank is using what it learned the first time to help its clients endure the COVID-19 crisis once again.

Economic impact

The last time that F&M faced a time of such economic uncertainty like the one currently gripping the country was in the late 2000s, when the housing market crashed and the nation was plunged into a recession for several years.

While both the recession and the COVID-19 pandemic caused upheaval on a massive scale, they did it in drastically different ways, Fisher said.

“We understand a recession; we understand the impacts of that,” Fisher said. “This had catalysts that were unfamiliar with us, compared to the normal economic catalysts of a poor economy.”

Bob Honeycutt, executive vice president and chief credit officer for F&M, said that both the recession and the economic impacts of the COVID-19 pandemic happened quickly, but one was easier to grasp than the other.

“What I remember about 2008, 2009 and 2010 was that things happened so fast,” Honeycutt said. “We hit rock bottom so fast. Real estate values plummeted so fast. When I compare that to today, I know there’s something out there, but I can’t put my finger on it. I can point in the direction, but it hasn’t really happened yet.”

The main reason that the fallout hasn’t been quite as dramatic, Honeycutt said, is largely due to federal aid provided by the government, both in the form of direct stimulus payments and PPP loans.

Signed into law on March 27, the CARES Act established the Paycheck Protection Program and charged the Small Business Administration with administering it. Through the PPP, businesses would be able to receive forgivable loans that would essentially function as grants and allow them to pay for expenses like payroll costs and utilities. 

The intention of the program was clear, but the rules and how the money would be distributed, was not. There had never been a program quite like it before, Fisher said.

To benefit from the program, business owners were told to go to their banks, who would apply for a loan on their behalf. If the business was approved by the SBA, the bank would lend the business the money and would eventually be repaid by the government. Those were the basics of the program, but little else known. F&M found itself fielding questions from clients about a program it didn’t yet understand itself.

“They were building a plane while they were flying it,” Fisher said. “The information we got was sparse and we were making a lot of this up as we went.”

F&M employees found themselves sifting through constantly changing rules late into the night and calling clients on the weekends, trying to make sense of the program and figure out how to take advantage of it for their customers.

“I look at our staff and how many of our staff dropped what they were doing and jumped on this project,” Honeycutt said. “I bet you there were no less than 20 different people that already had full-time jobs that jumped on this project and that’s what made it work for us.”

Navigating the system

Once the bank got a handle on what information was needed and compiled that info, the next challenge was actually submitting applications through the SBA’s online portal.

“In that first round they were using the old SBA E-Tran portal. It was not designed for this,” Fisher said. “This is not what it was supposed to do. This was like playing a CD in a cassette player. They had to makeshift to make it work, and if you weren’t familiar with that system, which we weren’t to begin with, and then you’re trying to use it in a way that wasn’t intended, it was 10 times as hard.”

Osborne teamed up with Ratte, who had recently joined F&M as a commercial banker after working in Raleigh for decades, to input the applications. Even when the duo figured out how to efficiently navigate the portal, it was still time consuming to manually type all of the information in. 

Larger banks had computer systems, or “bots” as Fisher calls them, that uploaded the information automatically. The closest thing that F&M has to a robot is Osborne, Fisher said.

To make matters more complicated, the portal being used by F&M was the same one used by every bank across the country. And when all of those banks accessed the portal at the same time, it created a log jam that slowed everything down. To circumvent this problem, Osborne got in the habit of submitting applications in the early hours of the morning — when most other bankers weren’t awake.

“(Osborne) was having to do them on weekends and weekend nights,” Fisher said. “We would process from 1 a.m. to 5 a.m. because the big banks weren’t doing it during that time.”

Investing in lives

What kept the bank’s employees focused during long days and work-filled weekends was knowing that the loans would help business owners in the local community.

“We’re personally invested in the lives of these companies and the individuals who run these companies,” said Tim Proper, F&M’s senior commercial lending manager and another integral part of the PPP team. “These are the people who we see at Food Lion, these are the people who we see at the post office, the people we see at church, these are the people who provide a livelihood for us as well.”

F&M has always shared a close bond with the Rowan County community. Steve’s father, Paul Fisher, not only established the bank as a dominant financial institution in the area, but was also a relentless and passionate fundraiser whose efforts led to the completion of many community projects. By helping local businesses apply for PPP loans while many of them were struggling through financial difficulties, F&M has further solidified its place in the community, its employees say.

“We do think we’ve maybe earned, I’ll call it extra points, with our clients for answering the bell for our clients during their time of most dire need,” Proper said.

When Osborne was making calls to clients on weekends to ensure that F&M had the right information before submitting an application, she said that she could tell they were appreciative of the hard work the bank’s staff was putting in.

“That first weekend, we were having to call people on the weekend because some of these questions we needed an answer to to get them entered,” Osborne said. “Even some of the clients were like ‘y’all are working on this?’ … I think we even kind of blew them away as well with the fact that we were working because we wanted to get it in as much as they wanted their loan.”

Working through the challenges of figuring out the PPP application process also brought the bank’s staff closer together. Since employees from different departments worked together on the project, there was an intermixing of staff that had never really happened before.

“It was the best team-building exercise that we could’ve ever gone through,” Honeycutt said. “You have these team-building exercises where you might go through Dan Nicholas Park and go through an obstacle course or do the trust fall. This was a real, live team-building exercise, and I think everyone passed with flying colors.”

The scramble to take advantage of PPP loans also forced the bank to upgrade its technological infrastructure. Like most businesses, F&M transitioned to a work-from-home model. Figuring out conference calls and video chats was critical to the team’s ability to succeed.

“We definitely moved the technology curve down the road faster than anyone thought in our industry,” Fisher said. “A lot of things moved to digital faster than they were probably going to organically. We’ve had to move quickly and be nimble with that, we’ve been able to.”

Having gone through the process of figuring out the PPP program when it opened the first time, F&M says it’s is better positioned as it begins to help its clients now that the program has reopened. On Jan. 19, the program allowed lenders to make applications both for first time borrowers and those going back for a second loan. Changes with the program, including a better online portal for lenders to use, should make life easier for community banks and financial institutions in general.

Looking back on how his staff handled the PPP last year, Fisher can’t help but laugh at some of the difficulties they endured together.

“It’s fun like war is fun,” Fisher said. “Meaning, it’s not fun when you’re in it. When you’re in that fox hole with your buddies and people are shooting at you, you’re not enjoying it. But you create memories and moments of humor that you look back at and laugh. Those are those moments you remember.”



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