When Derek Fraley joined Systematic Savings Bank, he was taking a risk. The savings and loan company, which was chartered in 1923, was a well established Springfield business, but that approaching centennial celebration wasn’t helping the bank’s bottom line. “We were losing on average $65,000 a month,” Fraley says. Despite the bleeding, Fraley joined the bank as CEO in August 2017.
Immediately, he had his work cut out for him. “The bank had a $22 million loan portfolio,” he says, adding that amount wasn't enough to cover the bank’s fixed expenses. The bank was also hemorrhaging money due to non-interest expenses including employment costs and contracts with service providers. “That meant we had to net 10% in loan yield just to break even,” Fraley says. “It was death by a thousand cuts.”
To stop the bleeding, Fraley set to work reducing expenses and reduced the staff from 15 to nine. “That was a low point in my
career,” he says. “I hated everything about doing that.” Fraley then focused on rebuilding his team with people who understood the risk and workload required, and who were excited to tackle the problem. Fraley says transparency was key.