Vista Bank’s Steinmetz recalls efforts to weather COVID-19 financial storm
Amid the 2020 global recession triggered by the COVID-19 pandemic, when large banks were reluctant to extend loans to small and medium-sized businesses through the Federal Reserve’s Main Street lending program, Vista Bank, a small Century-old community bank led by CEO John Steinmetz, has grown to be Texas’ largest MSLP lender and second nationally.
One of North Texas’ leading PPP providers, Steinmetz and his team had already positioned Vista to focus on entrepreneurs, funding 2,063 PPP loans. About 75% of these went to new customers, helping Texas businesses during the pandemic. With tireless lenders and the latest bot technology, members of the Vista team ensured that when Texans were most at risk of losing their jobs during the 2020 lockdown, this big-hearted little bank would be there for them.
“Entrepreneurs risk their own capital every day – they make this economy work,” said the bank’s president and CEO John Steinmetz. “They deserve a bank that works as hard as them, and in 2020, through no fault of their own, many of them had to find a new one, where they had their lender’s cell phone. We were thrilled to join with other community banks in meeting the business needs of our communities during this trying year, proving that community banks still deserve a place at the table.
In June 2020, Steinmetz and Vista general counsel Jared Craighead positioned the bank as one of the first 13 banks in Texas to participate in the Main Street Lending Program.
Under the PPP, a business owner could request the cancellation of his loan as long as he met certain criteria, mainly that the majority of it was applied to the payroll. Under the MSLP, the loans were non-repayable. Banks were also required to take a 5% stake in each MSLP loan, meaning that if the company defaulted on the loan, the bank was responsible for that 5%, a fact that also gave rise to capital burns. stomach to some banks.
Recognizing the willingness of Vista Bank and other community banks to step in when others would not, U.S. Senator Ted Cruz, R-Texas and then U.S. Treasury Secretary Steven Mnuchin welcomed a handful of CEOs from community banks across the country for a roundtable on the federal government’s financial response to the pandemic. Steinmetz and Craighead were flown to Washington, DC in July 2020 to share their observations of what was happening on the ground.
During his stay in Washington, Steinmetz agreed with Cruz, pleading for:
– Minimize regulations that could suffocate struggling businesses
– Call to other banks to participate in the MSLP program
–And praising the impact of the well-designed PPP program on Texas businesses in the communities served by Vista Bank.
After the panel discussion, Steinmetz and Craighead were even more convinced that the MSLP was the right move for the Bank and the Texas economy as a whole.
“We didn’t enter the program lightly,” said Steinmetz, who thanked his loan team for doubling their loan committee meetings in order to maintain strict underwriting guidelines. “The demand for these loans was overwhelming and I would have liked more banks to participate. That said, their loss was our gain, as the program took us out of our weight class and attracted stellar mid-cap companies as new Vista customers.
As a small bank, Vista Bank’s normal loan limit was around $ 20 million. However, because the MSLP program specified that the bank was to hold only 5% of the loan, Vista could now lend up to $ 300 million to qualified companies. Steinmetz saw an unprecedented chance to partner with mid-sized Texas businesses, and he guided Vista Bank to ultimately issue 80 loans over $ 775 million. This injection of money into the Texas economy was critical to the ability of businesses not only to weather the storm, but also to prepare for the post COVID-19 economy.
According to COO Auden Herrera, “What makes PPP and MSLP humiliating is that over 50% of new customers have moved their business and operating accounts to Vista Bank. In other words, we didn’t just give loans, we built trust in a time of uncertainty and business owners appreciated it.
Now Steinmetz has led Vista Bank, a private bank with assets in 1908 of only $ 11,000, to become the second largest MSLP lender in the United States.
Steinmetz was quick to credit Craighead and the team for their swift and thorough execution of the program, which resulted in the Bank being named to the Dallas Business Journal’s “Best Commercial Lenders in North Texas” list.
Several of the bank’s Main Street customers have publicly stated that they would not have survived the pandemic if Vista Bank had not facilitated their Main Street loan.
“I don’t care which side of the aisle you are politically on, Treasury Secretary Steven Mnuchin deserves the Nobel Peace Prize,” Steinmetz said. “Seriously, never in my life have I seen so many agencies like the Fed, Treasury, SBA and banks work so well together for the greater good. Was it perfect? No. But if Mnuchin hadn’t had the foresight to build this elegant relief program, who knows where our economy would be today.