The Operational Side of Lending [Podcast]

February 1, 2016 Bill Briggs


Earl Worley - KS Bank's COOWe are lucky to get some time to speak with Earl Worley. Earl has been with KS Bank for over 20 years and has progressed from lender to their Chief Operating Officer.

Phil Buckley and Rollie Tillman find out from Earl how he views commercial lending, its impact on the bank’s health and what keeps the COO happy.

No big surprise to us, it all comes down to building strong, long-lasting relationships.




Podcast Transcript

Phil Buckley

Hi, welcome to Lender Performance, your guide to becoming a better lender. I’m your host Phil Buckley, Director of Engagement at PrecisionLender and I’m here today with Rollie Tillman, our VP of Delivering and Client Success. Thanks for joining us.

Rollie Tillman

Today we have the opportunity to talk with Earl Worley, Chief Operating Officer of KS Bank, a thriving community bank in central north Carolina. KS Bank has 10 branches and about 330 million dollars in assets. Thank you, Earl for taking some time to chat with us today.

Earl Worley

Thank you for having me and I look forward to chatting with you this morning.

Rollie Tillman

I know you’ve been with KS since the early 90’s. Can you tell us a little bit about yourself and how you came to your current position?

Earl Worley

Sure. The bank is headquartered in Smithfield, which is in Johnston County, North Carolina and I’m from a little town east of there called Princeton. Been in this area all of my life, I’m 51 years old and been here all my life. I’ve got a great fondness for the area where our bank is located in 4 counties, just east of Raleigh which are Wake, Wayne, Wilson and Johnston.

I never strayed very far from home, went to school at Princeton high school, graduated from there, went to a now fairly well known university called University of Mount Olive which is a little further east of Princeton and down south of Goldsboro and got my degree in accounting. Came back to Johnston county, worked for a large automotive group here for a number of years and then got invited to join a bank team. I joined the bank in 1992, I started my 24th year, just January the 1st. I started out as a branch manager, loan officer, chief cook and bottle washer, so to speak, and have worked my way up. In 1999 I was invited to be the CFO of the bank and in 2010 was made the Chief Operating officer. I’ve grown up with the bank, had a privilege of doing that. I’ve had my hand on the till on a lot of things in the bank. I’ve been a quite of journey in the last 24 years.

Rollie Tillman

Wow, that’s great. Thank you for that. Let me ask you this, Earl. If you could wave a magic wand and have your commercial lenders or lending team better understand one thing, what would that be?

Earl Worley

I don’t know if I can just pinpoint it down to one, but I can tell you one, ironically, that I’m really focused on here just in the last couple of days. I think, it’s always the thing for all bankers to figure out how to get your commercial lenders to figure out there’s two sides to the equation.

Number one, there is the lending side and that’s great, but there’s also the other side is funding the landing, so we always want to focus on how we can get more deposits into the bank. But in so, doing on the lending side is focusing on the holistic approach to the lending, as opposed to making a rate equation every time. I think, that so much what’s wrong in commercial lending today is that we don’t take, while we’re somewhat mandated to do it by regulatory standards, I don’t think from the retail perspective, that we take the risk approach. I think that that’s one of the things that we have to continually look at with our lenders is how do we price appropriately for the amount of risk the bank is taking and how do we fund from the balance sheet side what you’re doing. I think that’s always a challenge. I’m sure, it’s not only … I know it’s a challenge at KS and I’m 99.9% sure it’s a challenge for every commercial bank.

Phil Buckley

Indeed. We talked to a lot of bankers last year. We were on the road and did 80 different events. Almost all of them were in some state and talking to a lot of state bankers, community bankers and you’re absolutely right. Everybody has that same pain point as you.

Let me ask you a question more specifically about you. I was doing some research on your bank and you, poking around through SNL data and FDIC data and finally LinkedIn. I found a great quote from David Rendall, who authored a number of books on executive leadership. He said about you:


First of all, that’s a fantastic quote and I’m immediately going to call David Rendall and find out how much I have to pay him to have that on my LinkedIn as well.

How important is that type of leadership to two main things? Attracting the right people to the bank, so that you get the absolute best people in there working for you guys and to have them be as profitable as possible for your bank, so that you can do great things, not just today, but down the road as well?

Earl Worley

I’ve been trying to be and continue to try to be a life long study of leadership. I met David a number of years ago and I was going to say I paid him to write that quote for me, but … He and I really are personal friends and he has a doctorate in leadership and I met him through the University of Mount Olive.

To answer your question about how we’re getting the right people, I think, in today’s world you have to lead by example. I think, people want to go to an organization where when they’re told something they can believe what they’re told, they’re not given empty promises. I think that you’ve got to be authentic and you’ve got to have integrity in your leadership. I think, when you do all of those things and you live out your mission and your values, it’s a clichéest thing in banking today to say that we’re going to be number one in service and we’re going to take care of our customers and we’re going to do this and we’re going to do that.

It’s one thing to get lip service to it, it’s another thing to live it out. I can tell you this, we don’t get lip service around here to living those things out. We do what we say we’re going to do. I think, to answer that portion of question about getting the good people, I think, that you’ve got to get the right people in the right seats on the bus. Then, you’ve got to treat them well and you’ve got to do what you’re going to say you’re going to do. I could talk about that probably half a day and we don’t have that much time.

How does that lead the profitability? I think, at the end of the day … I learned this a long time ago and I’m sure I’m not giving the proper … It’s not my quote, but if you’ve got happy employees, you have happy customers. If you do what you’re going to say you’re going to do about your own employees, then you also do what you say you’re going to do for your clients. I think, that’s just the utmost important is people will want to do business where they trust you and where they feel good about themselves and where they’re treated well.

I think, we all realize in today’s world … We don’t go to McDonald’s to get a five star service. Not belittling McDonald’s, but if we want five star service, we’re going to go to Angus Barn here North Carolina or somewhere that’s noted for their service. I think, my point in saying that is this, people are willing to pay you a premium for great service. Companies, not only in banking, in whatever industry they’re in, have to live that out, they can’t just be lip service to it.

The profitability of the company is directly driven, in my opinion about the service given by our employees to our clients every day and we have to live that out. To me, it’s real simple. For me, I think, sometimes we try to over complicate it, but we have to live out what we say we’re doing.

Rollie Tillman

Let me ask you this, Earl. Given the primary drivers of building great relationships that you talked about and profitable relationships and doing the right thing for your clients, what insights would you share for lenders, maybe lenders who are a little bit newer to the industry, or even seasoned lenders in terms of living that our from day to day and not just chasing rate, but building meaningful, profitable relationships?

Earl Worley

I think, sometimes that we put lenders in the field saying, just go get the loans, go get the loans and not … to your point about relationship. I think, you’ve really got to build relationships with people and they’ve got to know it’s the genuine thing. I think, in relationship building it’s being honest with people. So many times, I think, lenders … when new lenders are told, “Hey, got here and get the business and do whatever it takes.” When sometimes what we need to be doing is taking a more consultative approach to what we’re doing and be a banker. Somehow, in the last 8 years of the downturn or how many years it’s been, I may be off my math a little bit, 6 years, 7 years, it seems like it’s a decade. But I think, we lost art of being professional and being a advisory relationship industry. I think, if I were talking to a young lender is, you’ve got to build authentic relationships based on trust and integrity.

Back to my earlier comment, if you do that, people are willing to pay for the service. So many times we lenders go out and default to, okay, what kind of rates is going to take to get your business in the door when in fact, it’s not that shouldn’t even part of the discussion. We need to take a holistic approach to lending, which is, I need the whole picture before I can be advisory to you. Because what the client may be coming and asking for or what we go in and … we will need to be uncovering the needs and we need to be helping that client do the right thing for themselves. A lot of times, the clients don’t even know what is the right thing to do. They just think they know what the right thing to do is.

Until you got the entire picture in front of you is not … It doesn’t become a right question. That’s become a dollar amount question, to say what I’m saying is you give me your entire financial picture, let me analyze it, let me come back with yes, you’re exactly right, Mr. Customer, madam client. This is exactly what you need to be doing.

So many times we just send the people in to be order takers. If I were to give an advice to a young lender or even a seasoned lender is that quit being an order taker. Go out there and be professional, get your act together, know something about the client when you walk in the door, understand the industry they’re in. If it’s a mom and pop operation, find it, make some phone calls in the community. Find out what their reputation is in the community. Found out something about them. Just don’t be somebody that walks in to be an order taker. That’s not what people are looking for. And by the way, at end of the day, your bank or your institution will be much more profitable if you become a relationship lender that can execute on what I just said.

Phil Buckley

Earl, let me follow up with one kind of big take away, which is for any of the lenders who listen to this podcast, any insights on how they can better sync up with their leadership team?

Earl Worley

Yeah. I think, in today’s world, one of the things we’re trying to do with our staff is I want my employees to, and particularly my direct reports, but no matter what, where you’re at and who you’re reporting to is, be aggressive about what you’re doing and help your supervisor, help your leadership team understand what it is you’re doing and what your challenges are.

Don’t live under a rock and just wait for somebody to come ask you what’s going on. Be proactive and go to your supervisor, your chief lender and say, “Hey, here’s what I’m running into, here’s the issues I’ve got, how can we better solve these things?” I think, so many times we wait for all come top down. I’m “at the top”, so to speak and I’m trying to learn every day just like everybody else. I think, sometimes the staff sometimes thinks that we’ve got all the answer, when in fact, we need to be problem solving together. It should be a top down and a bottom up kind of situation.

Phil Buckley

I guess, that will wrap it up for us and today. Earl, thank you so much for joining us and thank you out there for listening to us. You can always find more information about today’s episode at and if you like what you’ve been hearing, make sure to subscribe to the feed in iTunes, Sound Cloud or Stitcher. We’d always love to get any ratings or feedback from you on those platforms. Until next time, I’m Phil Buckley-

Rollie Tillman

-and I’m Rollie Tillman-

Phil Buckley

-and this is Lender Performance.

The post The Operational Side of Lending appeared first on PrecisionLender.


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