In the midst of the 2020 global recession sparked by the COVID-19 pandemic, when big banks were wary of issuing loans to small and mid-sized businesses through the Federal Reserve’s Main Street Lending Program, Vista Bank, a small century-old community bank led by CEO John Steinmetz, became Texas’ largest MSLP lender and the second largest nationwide.
One of North Texas’ leading PPP providers, Steinmetz and team had already positioned Vista to focus on entrepreneurs, funding 2,063 PPP loans. About 75% of those went to new clients, assisting Texas businesses during the pandemic. With tireless lenders and the latest bot technology, Vista team members ensured that when Texans were most at risk to lose their jobs during the 2020 lockdown, this small bank with a big heart would be there for them.
“Entrepreneurs risk their own capital each and every day – they make this economy work,” said bank President & CEO John Steinmetz. “They deserve a bank that works as hard as they do, 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 glad to join fellow community banks in meeting the needs of businesses in our communities during this trying year, proving out that community banks still deserve a seat at the table.”
In June of 2020, Steinmetz and Vista’s General Counsel Jared Craighead positioned the bank to be one of the original 13 Texas banks to participate in the Main Street Lending Program.
Under the PPP, a business owner could apply for their loan to be forgiven as long as it met certain criteria, primarily that the majority of it was applied to payroll. Under the MSLP, loans were not forgivable. Banks were also required to take a 5% stake in each MSLP loan, meaning that if the business defaulted on the loan, the bank was liable for that 5%, a fact that also gave some banks heartburn.
Recognizing the willingness of Vista Bank and other community banks to step up when others wouldn’t, U.S. Sen. Ted Cruz, R-Texas, and then-U.S. Treasury Secretary Steven Mnuchin hosted a handful of community bank CEOs from around the country for a roundtable discussion on the federal government’s financial response to the pandemic. Steinmetz and Craighead were flown into Washington, D.C. in July of 2020 to share observations on what was happening on the ground.
During his time in D.C., Steinmetz agreed with Cruz, advocating to:
After the roundtable, Steinmetz and Craighead were even more convinced the MSLP was the right move for the Bank and the greater Texas economy.
“We didn’t enter into the program lightly,” said Steinmetz, who credited his lending team for doubling up on their loan committee meetings in order to maintain strict underwriting guidelines. “The demand for these loans was overwhelming and I wish more banks had participated. That said, their loss was our gain as the program allowed us to punch outside our weight class and attract some stellar mid-cap businesses as new Vista clients.”
As a small bank, Vista Bank’s normal lending limit was around $20 million. However, because the MSLP program specified that the bank had to hold just 5% of the loan, Vista could now lend up to $300 million to qualified businesses. Steinmetz saw an unprecedented chance to come alongside mid-market Texas businesses, and he guided Vista Bank to ultimately issue 80 loans at over $775 million. This injection of money into the Texas economy was crucial to businesses’ ability not just endure the storm, but to prepare for the post COVID-19 economy.
According to COO Auden Herrera, “the humbling thing about the PPP and MSLP programs was that well over 50% of the new clients moved their business and operating accounts to Vista Bank. In other words, we didn’t just make loans, we built trust in a time of uncertainty and business owners appreciated it.”
Now, Steinmetz has led Vista Bank, a privately-owned bank whose assets in 1908 were only $11,000, to become America’s second largest MSLP lender.
Steinmetz was quick to credit Craighead and the team for their swift and thorough execution of the program, resulting in the Bank making Dallas Business Journal’s 'Top North Texas Commercial Lenders’ list.
Several of the bank’s Main Street Clients have publicly stated that they would not have survived the pandemic if Vista Bank hadn’t facilitated their Main Street loan.
“I don’t care what side of the aisle you are on politically, Treasury Secretary Steven Mnuchin deserves the Nobel Peace Prize,” said Steinmetz. “Seriously, never in my lifetime 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 had Mnuchin not had the foresight to build this elegant relief program, who knows where our economy would be today.”
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