Derrick Bailey, Chief Sales Officer, Telhio Credit Union
With 90% of Americans under stay-at-home orders, local economies shifted almost overnight, leaving an estimated 7.5 million small businesses at risk of permanently closing their doors. Meanwhile, demand has skyrocketed for services such as groceries and business lending.
At most credit unions, branch transactions have fallen dramatically and lending teams are in high demand. Telhio Credit Union ($844.0M, Columbus, OH) ramped up lending support to take advantage of the federal Paycheck Protection Program (PPP) loan program, which launched April 3 to help small businesses pay their employees during the COVID-19 crisis. Meanwhile, demand for new mortgages, refinancings, and home equity loans has grown as interest rates hit a 50-year low.
The life of a loan specialist these days is hectic, with many employees putting in long hours, sometimes filled with uncertainty. But in many ways, the work is more rewarding than ever, says Derrick Bailey, chief sales officer at Telhio.
“It’s been a challenging but good experience in light of a bad situation,” says Bailey, who started his career as a wholesale mortgage account executive after graduating from the University of Toledo in 2005 and currently leads commercial lending, residential mortgage, and business development at Telhio.
In the wake of the Ohio governor’s stay-at-home order on March 24, Bailey and his team immediately shifted to remote working. Anticipating the increased loan demand, he had already begun shifting employees and new hires to support critical areas. Bailey, who joined the credit union in 2013, says it didn’t take long to settle in to a new “normal” routine.
Dressed For Success On The Web
Each day, Bailey has three standing WebEx status meetings with each of his teams. Plus, he makes an estimated 200 phone calls. These days, he says he prefers WebEx video because it helps resolve issues faster. Luckily, Telhio’s lending team was experimenting with remote working before the lockdown, and employees have laptops and experience with WebEx.
Everybody — our executive team, our CEO, our board — understands the urgency and gives us their full support.
Bailey is up by 6 a.m. and dressed in slacks, a dress shirt, and sports coat by 7 a.m. to start his day of WebEx meetings and phone calls. His wife, Denise, a financial crimes analyst specializing in anti-money laundering, works down the hall from his home office.
“Once I cross that doorway, I’m at work,” Bailey says.
Lately, he’s been putting in 12-hour days or longer and checking back in with his team before calling it a night. He says most of his team is working 60-hour weeks, Monday through Saturday, at all hours of the day.
“It makes me proud to see everybody in the company stepping up — cross-department, cross-division, and cross-functional,” Bailey says. “People working on the weekends, working 15-hour days. It’s a way we can help our small businesses and all of the nonprofits we support.”
Water Cooler Conversions
Although there is increased demand in some parts of the business, such as business and mortgage lending, work in other areas, such as auto lending, has fallen off. Bailey has been urging employees with time on their hands to work on training and certifications, which are not only a professional benefit but also a good way to fill a long day.
According to Bailey, he dedicates time in many of his meetings these days to water cooler conversation about how people are coping with the lockdown.
“A lot of us are getting caught up on yard work and home projects,” he says.
During these conversations, the virtual manager also takes the opportunity to check in on everyone’s mental state.
“I advise everyone to call your team, not just your managers,” Bailey says. “Schedule a conference call and rally the troops. Try to have a little fun, try to lighten the mood until we can get back socially to the same place.”
After a morning of meetings and calls, Bailey’s heads to his office in downtown Columbus. The credit union recently opened a 12,000-square-foot operations center, which gives employees ample room to practice social distancing. Bailey visits his office two or three times a week these days.
“From the parking lot, it’s just two doors to get to my office,” he says. “Once, I close the door, it makes it easier to practice social distancing.”
As an added bonus, the credit union buys lunch for commercial lending team members who come into the office every day. They favor the restaurants of local business members and buy hand sanitizer from a local distillery that converted its operations during the pandemic. CEO Leslie Bumgarner also recently sent goodie bags to the entire team.
$27M In 2 Weeks
Bailey’s team is under pressure to process as many PPP loans as possible to help local businesses keep employees on their payrolls. As long as 75% of a PPP loan goes toward eight weeks of payroll, the Small Business Administration (SBA) will forgive 100% of the loan.
The $349 million PPP fund ran out of money in just 14 days. However, within that time, Telhio was able to obtain authorization on 215 loans for $27 million. Approximately 25% of the borrowers were new to the credit union. Bailey says he has 92 applications that didn’t get funded waiting in the wings for the additional $310 billion — $60 billion of which is earmarked for smaller lending institutions such as credit unions — that Congress approved to refill the PPP fund.
“We’re still working on getting everything funded,” Bailey says. “The speed and the pace with the SBA regulations has been a challenge, but the team’s in good spirits. We’ve got a good process in place.”
See which credit unions have had historical success in SBA lending and how their portfolio compares to your credit unions in Peer-to-Peer. Learn more.
Telhio has been providing SBA loans since 2009 and, funded over 8.1M in 2019, and is the eighth-largest SBA lender in the Columbus-Cincinnati area. Even before the PPP program emerged, however, Telhio had added back-office and relationship specialists to support the projected growth in demand for the loan type.
Telhio hopes to expand business with new members coming in though PPP loans. But with auto loans down, Bailey expects overall loan growth will probably be a wash by the end of the quarter.
Bailey also says, in the long run, he expects the crisis will help lenders become more agile and willing to try new things, especially as the SBA has looked for ways to streamline loan processes throughout the PPP rollout.
“This is forcing lenders to think about how to deliver, how to onboard, and how to handle the member experience,” he says. “For example, hats off to the SBA for allowing e-sign for the forms. Wet signatures would have been catastrophic.”
Life Doesn’t Stop — Even For COVID-19
On a recent Friday afternoon, Bailey took the day off to close on his new house. The closing took longer than expected because he and the other parties met in the parking lot and stayed in their cars as they signed documents — with the legally required wet signatures. Bailey admits it’s an unusual time to buy a home, but the right elements fell into place.
“We were going to hold off, but this was the house we’ve been looking for, so we went for it,” he says. “Plus, the rates are really, really low, and there’s not a lot of inventory in the Columbus market.”
Bailey’s Friday ended back in his home office around 7:30 p.m., after a 40-minute interview for CreditUnions.com. During the phone call, he shared examples of how Telhio’s work is paying off. One local manufacturer received one of the first COVID-19-related loans to help shift production to making badly needed parts for ICU respirators.
“The tough part for everyone is uncertainty, but I’ve noticed how quickly our members in the business community have acted,” Bailey says. “They’re getting the information to us when we need it. They’re acting with a sense of urgency.”
In addition to adding a sense of urgency to every day operations, the pandemic has also served to reinforce for Telhio how engrained it is in its community and how integral it is in the lives of its 58,000 members.
“If we’re not able to help these small businesses make their payroll, then their employees — our members — are not going to be able to make their mortgage or their personal loans,” Bailey says. “They’re not going to be able to put food on the table. Everybody — our executive team, our CEO, our board — understands the urgency and gives us their full support.”
Want more credit union strategies? Sign up for the CreditUnions.com free newsletter.