How Bremer Bank churned out $1.5 billion in PPP loans

Jeanne Crain saw the tsunami coming.

Like other bankers, the president and CEO of St. Paul-based Bremer Bank could have turned to technology to handle the deluge of applications that arrived with the April debut of the Paycheck Protection Program (PPP).

But Crain decided to go old school. Instead of using an online application form, like most of the big banks, Crain redeployed 400 of her 1,700 employees to make sure every prospective customer talked to a real person. She borrowed veteran employees from operations and risk management to manually input the applications and verify information, and her teams frequently worked overnight to upload the finished documents to the U.S. Small Business Administration (SBA).

Crain's bet paid off. While the flood of applications overwhelmed some of the nation's biggest banks, whose automatic systems failed to flag problems that sometimes delayed applications for weeks, Bremer Bank churned through the crisis. At its high point, the bank was processing 1,200 applications a day.

Although Bremer has about one-fortieth the assets of Minnesota's biggest banks, the company produced a higher volume of PPP loans than any other financial institution in the state, according to recently released data from the SBA.

"We had people setting alarm clocks so they could get up in the middle of the night and upload documents," Crain said last week. "We had senior managers doing that. It makes me very proud. … This is definitely a moment in my career I will never forget."

Congress created the PPP to help small business owners through the pandemic by covering their payroll costs for eight weeks. Small business owners, who watched in horror as their sales collapsed when COVID-19 struck in late February, started lining up for the government's $660 billion relief program in April.

The early days of the program were panicky ones, as big banks focused on their existing customers. Often, smaller firms were left at the end of the line, wondering if their loan would be processed before the funds were gone.

At Betty's Pies in Two Harbors, co-owner Marti Sieber said she was still waiting to hear if two of the state's biggest banks would even take her application when the initial round of PPP funding ran out in mid-April. At the recommendation of her accountant, she called Bremer when the program rebooted on April 27, even though she hadn't used the bank in years. Her application was approved by the SBA a day later, and Sieber received her money on May 8.

"I would give Bremer Bank five stars," said Sieber, who received more than $150,000 for her restaurant, which is a first stop for many travelers when they visit the North Shore. "They made it very easy."

Bremer's willingness to take applications from noncustomers was another strategic decision that set the bank apart from industry leaders. Word quickly spread in the small-business community about Bremer's policy, prompting hundreds of entrepreneurs with accounts at other banks to come knocking. Of the 6,894 PPP loans handled by Bremer in the Midwest, 21% involved first-time customers. The bank with $13 billion in assets funded a total of $1.5 billion in PPP loans in Minnesota, Wisconsin and North Dakota.

"This has been a moment of truth for every company," Crain said. "How you show up as an organization reflects your culture and your purpose and your values. Going through this extraordinary time has reinforced what we are all about, in ways we never could have imagined."

Joe Chow, Bremer's director of specialized business solutions, said the pandemic forced the bank to do business in new ways. Instead of meeting face-to-face with applicants, Bremer bankers would start taking calls from small business owners from their home offices as early as 5 a.m. Many nights, he said, they would be on the phone until 8 p.m.

"This was a really intimate process, and we wanted to make sure people had that human contact," Chow said. "We did 7,000 PPP loans, and we heard 7,000 different stories. Every loan was different. Every business was impacted in a different way by the pandemic."

Tina Ramgren, whose family owns the Japanese restaurant Sakura in St. Paul, said she needed to hear from her banker every day while she waited for the SBA to approve her PPP loan of about $150,000.

"I was nervous and I wanted to talk to a real person," Ramgren said. "I almost withdrew my application and went with a smaller bank, thinking that might be faster. But I'm glad I didn't."

Crain said her biggest concern was burnout. With her teams working around the clock and on weekends, Crain said she had to order everybody to take a couple of days off at the conclusion of the first round of funding.

"I don't want people to work to a point where they lose any passion for what we do," Crain said.

To reward her employees, Crain said she gave everybody a bonus of $250, including employees who were not directly involved in the PPP.

"We couldn't have done this without other people taking on more work in their day-to-day jobs," Crain said, "so we could free up the resources we needed to get it done."