Independent Banker - September 2020 - 62

Q: How has the COVID-19
pandemic aff ected your role
within the organization?
∠ Steven Nutt: In my role as chief
fi nancial offi cer, the biggest impact
of the loan modifi cations and lending
associated with COVID-19 is around
loan loss provisions and the model we
use to assess asset quality. There is a
lot of uncertainty around this due to
the nature of the economic downturn
associated with COVID-19. Unlike
the fi nancial crisis in 2008-2009,
the underlying economy is strong, so
the question is what will be the real
impact and how to model that around
a health crisis instead of an economic
crisis. As CFO, staying attuned to the
economic news and factors have taken
on increased importance.
∠ Mark Oldenberg: My involvement
with our credit committee has
increased, and I am helping to
monitor potential problem credits
as it relates to our allowance and
provision expense. I'm providing
guidance for loan modifi cations and
potential impacts to troubled debt
restructurings and credit metrics for
the bank as a whole.
∠ Emily Hofer: As our lenders have
been chugging away on producing
PPP loans, I have been spending
several hours each week on
conference calls and webinars, and
have been reading materials primarily
focusing on the PPP and its related-
and constant-changes. I have been
developing checklists and templates
for our lending and operations staff .
Q: Speaking of the PPP, how has
it aff ected your role?
∠ Nutt: In several ways, actually.
The largest impact was on funding
and liquidity management.
Liquidity management became
a daily monitoring concern, and
forecasting sources and uses of
funds was something that I keep
" I THINK THE MAJOR IMPACT [OF THE
PPP], BESIDES A TREMENDOUS NUMBER
OF OVERTIME HOURS, HAS BEEN THAT
OUR CUSTOMERS ARE SEEING THE
TRUE VALUE OF THEIR RELATIONSHIP
WITH A COMMUNITY BANK. "
-EMILY HOFER, MERCHANTS STATE BANK
management and board up to date
on. Also, as CFO, I have presented to
our board diff erent scenarios based
on how much we are willing to do.
We voted on limits even though it
is a government-backed program,
because we felt a need to monitor the
risk exposure and match that to our
risk appetite.
∠ Oldenberg: I have been involved
in monitoring the guidelines for
PPP and the many changes along
the way. I am involved with fi nding
and vetting a third-party solution for
PPP forgiveness and the impact to
our balance sheet and income based
on change guidelines. We have also
established ourselves as a potential
borrower from the discount window
using the PPP loans as collateral.
∠ Haynes Standard: In my case,
my role hasn't been aff ected other
than the impact on net income and
liquidity. That's because at our bank,
the lending team and loan staff took
on this program.
Q: What impact has the PPP had on
your bank more generally?
∠ Nutt: It's an interesting program
that has really thrown 2020 budgets
52 Q ICBA Independent Banker Q September 2020
Independent Banker - September 2020

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