Roger Casper is darting through the driving rain to his car outside a strip mall in Bloomington, a folder of bank documents in one hand and a buzzing cellphone in the other.
Casper, a U.S. Bancorp branch manager, has a killer schedule ahead of him. It includes five hours of back-to-back meetings with small-business owners, including stops at a flooring retailer, a computer parts wholesaler, a technology consulting firm and a construction contractor. He won't set foot in his branch on Lyndale Avenue S. in Bloomington until sundown.
"You can't sit back in a branch and wait for a small business to pick up the phone," Casper, 46, said. "You have to go out and get it."
Casper is part of an ambitious and unorthodox experiment by the nation's fifth-largest bank, which is training more than 3,000 branch managers across the country to be part-time loan officers. No longer chained to their desks, branch managers at U.S. Bancorp are now required to spend nearly half their work hours either calling or visiting business owners.
Though other large banks have ramped up their small-business lending in recent months, U.S. Bancorp is believed to be the first to put branch employees out on the street to make loans to neighborhood businesses. Traditionally, loan prospecting was left to loan officers, while branch managers stuck to administrative tasks and serving consumers in the branches. The clear division of responsibilities kept confusion to a minimum.
The change reflects a newfound hunger on the part of the nation's largest banks for loan growth, which remains anemic despite the rebounding economy. Small-business owners are seen as a particularly attractive target because they often purchase other services, from payroll processing to credit cards.
However, by sending its branch managers into the field to knock on doors, U.S. Bancorp is entering virgin territory, and one fraught with potential risks.
The Minneapolis-based bank must teach the language of business and cash-flow accounting to thousands of branch employees, many of whom are former tellers with no experience making business loans. It risks distracting branch employees from serving regular customers, while alienating potential business clients if the employees appear unprofessional, say industry experts.
At the same time, U.S. Bancorp has the luxury of scale. It can put thousands of people on the street at once, and continually feed them with fresh business leads and a large menu of products and services. "With their marketing muscle and size, U.S. Bank can achieve a phenomenal amount," said Loren Prairie, a bank consultant in Apple Valley.
The new approach appears to be yielding results. In 2010, a year in which business loan balances fell 3 percent across the nation amid still-sluggish business growth, U.S. Bancorp managed to increase its small-business lending balances 14.8 percent in its metro markets. In the Twin Cities, where U.S. Bancorp has 87 branches, the bank's small-business balances grew 11 percent last year.
"That shows we're bucking the trend, and that our strategy is working," said Christine Hobrough, U.S. Bancorp's regional manager for consumer banking in the Twin Cities.
Over the years, giant banks have struggled to win over small-business owners. They've tried cold-calling, mass mailings, and special online portals that enable them to approve loans remotely. These efforts met with limited success, in large part because small-business owners often need more hand-holding than a large bank is willing to provide, experts say. Smaller, community banks helped fill this niche by emphasizing personal service.
But the lending landscape has changed dramatically since real estate prices collapsed four years ago. Regulators have shut down nearly 350 of the nation's 7,800 banks. Hundreds more are effectively "zombie" banks, unable to grow because they are too busy unwinding problem loans and dealing with regulators.
U.S. Bancorp was among the first to seize the moment. Three years ago, the bank required all 3,000 of its branch managers to undergo about six months of training on small-business lending. The training included hours in the classroom and role-playing in front of a camera. Then, in 2009, the bank mandated that all of its branch managers spend at least 40 percent of their time -- or two days a week -- calling or visiting with small-business customers.
The initiative is about more than just booking loans. The bank also is looking to cross-sell a variety of services, from payroll processing to retirement planning, to small-business owners and their employees. "Small business is really a triple play," Hobrough said. "You have the opportunity to serve the business, to serve the business owner or owners, and the employees."
From the start, U.S. Bancorp's approach has been highly regimented and numbers-oriented. Each branch manager is required to maintain a list of more than 100 prospective small-business customers. Top prospects on this list receive in-person visits from branch managers every three months.
The meetings are often casual. On a recent Tuesday, Casper, the Bloomington branch manager, mostly sat back and listened as the owner of a flooring store described his troubles trying to compete with big-box retailers who subcontract their labor. Sales at the store had fallen 50 percent over the previous year.
At one point, the store owner asked how easy it would be to get a loan to buy out one of his partners. "If the credit is there and the cash flow is there, then it's a pretty easy decision, " Casper said to the owner. "We can certainly sit down and talk about it when you're ready."
It was not a hard sell. After 30 minutes of talking and a handshake, Casper was on to his next appointment.
Later that day, Casper was ebullient when a dental practice called him out of the blue -- 45 days after their first meeting -- to get loan rates on the purchase of new computers. "Sometimes good things come with time, like fine wine," Casper said. "You can suggest something and three, four, or six months go by and, boom, all of a sudden they have a need, and they're on the phone."
It remains to be seen how the strategy will fare over time. Despite the training and frequent visits, the branch managers lack the ultimate authority to approve a small-business loan. That's left to a separate group of underwriters who crunch the financials.
Borrowers who prefer to deal directly with people empowered to make lending decisions are better off sticking with a community bank, argued Rick Beeson, president and chief executive officer at Park Midway Bank in St. Paul. "That's a salesperson, as opposed to a decision-maker," he said of U.S. Bancorp's newly minted small-business bankers.
Other rivals question the wisdom of pulling managers out of branches. "If you try to do business lending 40 percent of the time, you're asking for trouble," said Jason Korstange, a spokesman at TCF Financial Corp., a regional bank based in Wayzata. "It's like anything. To do it right, you've got to do it 100 percent of the time."
But other large banks will be watching U.S. Bancorp's approach closely, said Bert Ely, a consultant in Alexandria, Va. If the bank continues to outperform, other big banks are likely to send their branch employees into the field, too.
"It's really a 'back-to-the-future' phenomenon," Ely said. "Once upon a time, it used to be that all bankers got out in the community and hustled for business."
Chris Serres • 612-673-4308
