134: EO Interviews - Doug Schukar



We're taking our winter break, which means it's time for our annual walk through #EsOpWonderland! This year we'll tour the highlights of our 2020 interviews. In this interview, Bret Keisling is joined by USA Mortgage founder and CEO Doug Schukar, who shares his path to an ESOP, what he’d do differently, and why he credits being an ESOP with a 600% increase in value in one year.


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This episode originally aired on November 24, 2020 as Episode 127: Doug Schukar - USA Mortgage.

Episode 134 Transcript


Bret Keisling: Welcome to the EO/ESOP Podcast and ESOP Mini-cast Winter Wonderland! We've selected our 10 favorite episodes from 2020 to bring you while we recharge our batteries and work on new content. We'll be back at the end of January, 2021 with all new episodes.


Bret Keisling: We'll still be active on social media, so reach out! You'll hear our contact information at the end of the episode. In the meantime, I'm going to mask up and follow the guidelines. I hope you'll do the same. Enjoy the episode!

Bitsy McCann: 00:03 Welcome to the EO Podcast, where we amplify and celebrate all forms of employee ownership.

Bret Keisling: 00:13 Hello, my friends. Thanks for listening. My name is Bret Keisling and as it says on my business cards, I'm a passionate advocate for employee ownership. Do we have a treat for you! My guest is Doug Schukar who is the founder and CEO of USA Mortgage, a 100% ESOP. Doug has a great story from both the employee ownership and business perspectives. You'll hear about USA Mortgage's dramatic growth in the last few years and the fact that Doug credits the lion's share of that growth to being an ESOP. Doug will also share how the ESOP came about. It's a new twist and I'll give you a little spoiler -- some key people didn't like his previous succession plan. Doug will also explain how being an ESOP has made a huge difference in employee recruiting and retention. And I'll give you a heads up there -- imagine how your recruiting and retention would be if you had a six-fold increase in valuation just a couple of years after your ESOP was formed. Here's my conversation with Doug Schukar.


Certified EO Shop EO site

Bret Keisling: 01:32 In Episode 106 of the ESOP Mini-cast, I talked about Certified EO and their great new "Shop EO" program. I also gave shout outs to employee owned companies Best Friends Pet Hotel, Gardener's Supply, Once Again Nut Butter, and to top it off I was joined by Vince Kruse of USA Mortgage to talk about that company. My premise is really simple: There's not enough consumer identity in employee ownership, and we in employee ownership should be supporting our own companies. I'm therefore really pleased to be joined on today's podcast by Douglas A. Schukar who is the founder and current chairman and CEO of USA Mortgage. Doug, thank you so much for joining me.

USA Mortgage logo

Doug Schukar: 02:15 Well, thank you for having me



Bret Keisling: 02:17 Tell me a little bit -- and we're both sensitive to the fact that times are tough in our country and our world, there are a lot of businesses and employees, whether it's EO or not, who are going through tough times, and we're both sensitive to that -- there are industries that are doing well, and I was surprised to find that the mortgage industry is one of them. Can you share a little bit about how USA Mortgage is doing in the last year?


Doug Schukar: 02:43 USA Mortgage, really the industry as a whole, we tend to do well when other industries do not. And sometimes they refer to that as recession proof and it's only because the ten-year treasury starts to go down and our interest rates are tied in with that. So we're having a record setting year, if I had to put it simply, and it's not just a slightly record setting year, it's a significant record setting year. Our growth will be about 90, 91, or 92% up over last year's total volume.


Doug Schukar: 03:13 And we're doing it, really, I believe, from a couple of attributes. One being the low interest rates, certainly fans the flames of refinances, but the other is the purchase market is incredibly strong, far stronger than I think one would lead to believe based on just what you see in the press. The employment rate is still high enough where people are able to close on their home loans. Employment obviously is a necessity as it relates to signing for debt and whether it's a purchase or a refinance it's happening at record setting levels for us right now.


Bret Keisling: 03:48 Can you tell us a little bit about, I know that you're operating in almost fifty states, if not quite all of them, how many folks are doing what you do. Can you just give us a little blueprint of USA Mortgage?


Doug Schukar: 03:59 Yeah, so we've grown it pretty significantly since we turned into the ESOP, and for your listeners, we closed on our ESOP transaction on December 31st of 2017. And let me first give you a head count update on it. So when we hit the ground as an ESOP on that day, we had about 535 employees and by the end of its first year, at the end of 2018, we grew it to about 565 employees. And by the end of last year, we grew it to about 665 employees. And I'm happy to say that as of this morning, we just crossed the 900 employee threshold.


Bret Keisling: 04:36 Wow!


Doug Schukar: 04:36 From a branch standpoint, obviously it mirrors the same types of growth. We were, when we closed on the ESOP, we had 39 branches -- locations -- if I'm not mistaken. We grew that to about 64, 65 by the end of 2018. And then we started to really see some significant growth, we went to 102 branches by the end of 2019. And right now we just, I believe, opened up our 130th or 131st, if I'm not mistaken.


Doug Schukar: 05:06 So we're seeing an awful lot of growth from that standpoint, from the states, you mentioned the individual states. We're not licensed in all 50 of them yet. The goal will probably be 49. I'm not so sure that we're a good match for some of the compliance regulations in the state of New York, so we'll probably be without that. We are licensed in District of Columbia though. So we'll end up with 50, but with 49 States plus DC. So it started out as 22 States, grew it to 32 in the first year after the ESOP, then to 37, and now again, we're at 41 plus DC. So we're seeing significant growth just as we roll out from coast to coast.


Bret Keisling: 05:47 Doug, congratulations, and from my perspective, I'd be happy for you in any hat that I was wearing, but you have just about doubled the number of owners -- you brought in a good chunk of them at over 500 and you've almost doubled that and that's just in three years, if I've got my math right. So that's absolutely great. We are going to talk about the ESOP transaction and changes to USA Mortgage and that sort of thing, but we can't get there until we go back to the beginning. Was there a time where, Doug, you were with just a couple of people? Tell us the origin story.


Doug Schukar: 06:23 Wow. Well, [laughter] sit back and get a good book or something to read...


Bret Keisling: 06:28 And, Doug, by the way, just for our listeners, I'm using USA Mortgage as you are as well. DAS - D, A, S your initials, DAS Acquisition is part of it as well. So I wasn't sure what you were going to highlight, but for those who are, are I just wanted listeners to know that there are separate entities.


Doug Schukar: 06:48 Yes. Well, the legal entity is DAS Acquisition Company, and it's because you cannot trademark the USA letters across the country.


Bret Keisling: 06:55 Got it.


Doug Schukar: 06:56 So USA Mortgage is a marketing name. The legal entity is DAS,

which is my initials, Acquisition Company. I started in 2001. But really the story goes back before that.


Doug Schukar: 07:09 So in 1989 is when I got into the mortgage space. I had graduated Vanderbilt University in Nashville, Tennessee in '86, and went to work for Proctor & Gamble for two years in North Carolina. Realized after a couple of days, I wasn't really going to retire from Procter & Gamble, it's just a little bit too corporate for me, although a phenomenal organization with phenomenal people. I got into small scale mergers and acquisitions and came back to St. Louis. And I did that for a year but unfortunately with mergers and acquisitions, nobody forces a close. So the deal is together, then it's apart, then it's together, then it's apart. And I made about $9,000 in my first year of doing that, and I had to move back into my parents' basement.


Doug Schukar: 07:48 And a couple of my buddies were in this thing called mortgage banking. And they said, you ought to try it. It's not like buying and selling a business from that standpoint, but it's similar. Whereas we're not buying and selling the house, somebody else is doing that, and we're just doing the financing. And it's really not the money business, it's really the sales business that you just need to be the go-to person and have a great team around you. So I leveraged that into interviewing with about 18, 19, 20 firms in the metropolitan area of St. Louis, which is my hometown. And was excited that out of those, I think it was 19 interviews and 17 of them offered me a job right at the very first interview.


Bret Keisling: 08:29 Wow!


Doug Schukar: 08:29 And I realized that the Procter & Gamble name was a little majestic and maybe a little bit of Vanderbilt there as well, but did that and became a loan officer. And my friends were right! It was a sales business and I became the number one loan officer in the metropolitan area of St. Louis and about two years. And I say that because my background, therefore, is sales, that's what's kind of in my blood. I didn't, I'm not a serial entrepreneur. I wasn't born thinking I wanted to buy and sell a bunch of businesses.


Doug Schukar: 08:57 And I ended up keeping that title of the number one loan officer for about eight or nine years in the 1990s. And while that was going on, the company I went to work for, kept selling and kept selling and kept selling. And as it got bigger, they kept buying, they kept buying, and before I knew it the local network that I was part of was purchased by a very large bank, known as Firstar, which then merged the next year with another firm otherwise known as US Bank today. And I realized at that time that I just -- it was too Procter & Gamble like, it was just too much corporate structure.


Doug Schukar: 09:34 So a firm by the name of LoanSurfer.com in 1999 asked me if I would come aboard, bring my volume with me, and run their St. Louis operation. And you've got to dial your clock back to the 1999 era where the whole Dot Com bubble was just starting. Nobody knew what it was. Nobody knew what WWW stood for. And it was kind of exciting. And I'm not a big tech guy, I love the gadgets like anybody else, but I'm not the I'm not a threat to somebody's job in the technology world by any stretch of the imagination.


Bret Keisling: 10:06 [Laughter.]


Doug Schukar: 10:08 And they hired me to run their St. Louis operation. So I did that, but unfortunately the NASDAQ bubble bursted. And by really August, September of 2001 they decided they weren't going to make it. And they had had some venture capital funding and, you know, some other stories you hear about in today's world, that's still applicable with financing. And so what happened was that door slammed closed in my face, but I'm a big believer that when a door closes a window opens and the question is, are you smart enough to go through it? And in this case I was, and I went through it and before I knew it, they offered me the opportunity to buy their assets. And I was the age of 35 at the time. It was 2000 -- it was actually, it was the winter of 2000 when the negotiations started and eventually ended up closing by April of 2001.


Bret Keisling: 10:59 Doug, may I ask, was it the assets of the St. Louis office or the assets of the company?


Doug Schukar: 11:05 That's a great question. So it was the remaining assets because I had no interest in the national network that they were starting to accumulate under the LoanSurfer.com brand name, which we still own to this day, actually. We're starting to launch it in a business to consumer enterprise across some of the states, right now it's only in a couple, but hopefully to be found with a little bit more growth over the next couple of years. But really just the St. Louis operation. We hit the ground running on April 13th of 2001 with 52 employees. And in our first year we closed about 250 million worth of volume. And last year we closed just shy of 2.5 billion. And this year it looks like we will be at about a 4.6 or 4.7 billion by the time the numbers are finalize.


Bret Keisling: 11:55 2.5 to 4.6, am I right, from last year to this year?


Doug Schukar: 12:01 That is correct.


Bret Keisling: 12:01 Wow, Doug. Wow. So things were humming along and were you the sole shareholder, did you own 100% or did some people have a piece of it?


Doug Schukar: 12:13 I was. So, you know, it's an interesting concept. So my partner in crime, so to speak, is a lady by the name of Linda Pring who is our president. And she is who hired me into the business in 1989 in that story. And she was the single greatest mortgage mind I've ever known and still is to this day. And she never really wanted ownership. It was a great match because as it evolved and she taught me really everything I knew and really is largely to be credited for me becoming the number one loan officer in St. Louis for those 1990s and those years. She never wanted the ownership. And as I got to that point where I went through that window and they afforded me the opportunity to buy those assets, I did it flying solo. And what we realized was we were going to be a great match for eternity because she wanted to run a company as if she owned it. And I wanted to own a company and have somebody run it as if they owned it. And so it became a great match. She never wanted the ownership. I wanted one direct report, which would be her and she wanted everybody else. She wanted the control of the organization to be able to run it as she saw fit.


Bret Keisling: 13:23 At a certain point -- and we can talk a little bit about the ESOP -- but tee up for me, 100% shareholder you could keep going on forever, but you didn't. Can you, can you tell me what brought the transition up, around?


Doug Schukar: 13:40 Happy to! So I was the sole owner and it was going great. We'd been between that billion and a billion and a half mark for about 10 years. And then, it was interesting, what happened was, sadly, one of our largest competitors here in the St. Louis metropolitan area, which was another independent mortgage company, their primary stakeholder suddenly passed away of a heart ailment. And everybody kept asking me, does that hit home with you? And the answer was, it absolutely hit home with me because this gentleman was about three years younger than I was at the time. And he had two young kids and I have two young kids. And this was going back to 2015. And so it was interesting because some of our competitors here locally used that unfortunate situation as a recruiting tool. And while I understand the intentions of recruiting, and I understand that fear is a great motivator, I didn't agree with the tactic.


Doug Schukar: 14:41 But the reality was they were getting an awful lot of our people to say, hey, what is your, what is your succession plan, Doug Schukar? What are you going to do with this company? What happens if something happens to you and you end up with a heart ailment? Or if Linda gets hit by the slop truck? What is our succession plan? And while I had all that done from an estate planning purposes, where actually Linda would run it and I had a family member and also another person who is currently one of our trustees to take over the decision-making engine of the organization. It wasn't the message that some of our people were wanting to hear. And so what happened was on January of 2016, one of our large branches in the neighboring county to St. Louis County, an area called Jefferson County, one of our branches picked up and walked out and they went to go work for another firm because clearly my succession plan wasn't what they thought it should be. And that really hit home. And I realized right away that, again, I wasn't born a serial entrepreneur, my ownership and pride of it while it's big, it really is not. And while I loved all the things we were doing, and I realized that there was just something bigger going on, but I didn't yet know what it was going to be.


Doug Schukar: 16:00 And so we went down the path of merger and acquisition, some of the behemoths across the country and got pretty deep. And I got as deep with one firm based out of Southern California until he sent me over a list of all the employees that I would have to lay off for redundancy reasons. And I'll never forget that word, that word "redundancy" it's from an M&A standpoint it's a big deal...


Bret Keisling: 16:23 And Doug, I apologize. Let me just interrupt. And the redundancy is, because we see this in ESOP transitions, employee ownership transitions. The redundancy was acquiring company already had those people so it was yours that were going to go. There wasn't even a process of, let's see if yours are better or theirs are better. It's new people are on the hook. Happens regularly and I'm glad that that did not appeal to you.


Doug Schukar: 16:50 Absolutely. There were 70, seven zero, 70 people on that list. And the only position that they would find a temporary space for was our CFO, just because of the nature of what he was doing at the time. And that's the part that just made me realize, it's just not the cloth that I'm cut from. And there has to be another way to do it. And our current executive vice president, a gentleman by the name of Ron Mueller, he came to me and said, have you ever thought about an ESOP? And I said, I don't really know enough about what it is. I know what the letters stand for, but I really can't tell you the details. However, I remember seeing from our mortgage bankers association and M&A -- a mergers and acquisitions -- workshop coming up, and I remember seeing that there was going to be a breakout session to talk about ESOPs. That somebody had already done that, or was on the verge of doing it, even though it was something I hadn't heard of.


Doug Schukar: 17:48 And so I went that seminar. And it was a firm out of the state of Washington that had done it and realized right away, just the attributes that your audience so well knows with ESOPs, that that was the answer I knew it instantaneously. And so that seminar happened in the early part of 2016, and we just started down that road until we finally got it to close. And we picked by the end of the year, 2017. Awful lot of regulatory approvals in the mortgage space, being a HUD approved lender, a awful lot of things that we had to get dotted and T's crossed to make sure we did it properly.


Bret Keisling: 18:26 Doug, I'm laughing because as an ESOP trustee, I think I was involved with 120 transactions and maybe 180 valuations. Never did -- and they're heavily regulated as you know, from the DoL [Department of Labor] perspective -- but it's dotting the I's in case something comes up. I didn't realize the volumes of work because you're in the mortgage industry above and beyond the average ESOP transaction!


Doug Schukar: 18:54 Yes, because there's so many moving parts to a mortgage. So you've got so many government approvals under different departments. And then we had been a true mortgage bank. We fund loans in our own name and we utilize warehouse lines through large financial institutions to be able to do that. And clearly they have to be on board, that's our lifeblood day in and day out. So we had to make sure we could present to the half a dozen or so of those organizations to make sure that we could obtain their approvals as well.


Bret Keisling: 19:24 And for listeners, it could be similar if there's a big construction company, for example, that's bonded. You know, we have gone through process with bonding agents that may be similar just by way of comparison.


Bret Keisling: 19:36 Doug, let's now talk 2018 through today. You've had explosive growth. You obviously, some of it is situational and this year would be a banner year, presumably for all of the recession proof reasons, and other reasons. How much of the explosion in the last three years do you attribute to becoming employee owned?



Doug Schukar: 20:05 I would tell you the signif-- the lion's share. And while I know that there's a strong wind in our sails right now in our industry, the reality is we're seeing growth greater than the industry. And that's what I'm using kind of as a measuring stick. We'll end up being up that 91, 92, 93%, by the end of the year, coming off of the heels of a 40% growth from the prior year and the industry is not seeing those kinds of numbers.


Doug Schukar: 20:34 And so what we're just hearing and talking to people looking to join our organization is that it's so exciting to them that they're no longer just working for that paycheck. That now there's a bigger picture involved by having ESOP. So it's been a, an incredible, incredible recruiting tool. And now because of the valuations that we're starting to see, certainly year over year from 2019 to 2018 we had a 600, a 6-fold increase in our valuation from '18 to '19. And in real numbers, we had the highest grouping of people had 30-something thousand dollars in their balance for their ESOP account. And you can do that math pretty quickly, it took them to just north of $200,000 in one year, from the low thirties to just over $200,000. And so now it's becoming not just a recruiting tool, but a tremendous retention tool at the same time.


Bret Keisling: 21:38 That is really huge and incredible and very impressive numbers. And it reinforces, everybody's just doing their jobs. You know, they're doing what they would be doing anyway, but there might be more of a spring in their step. There might be more of that camaraderie that we're all in this together. But that is significant additional income for anybody in a very short period of time.


Doug Schukar: 22:05 Absolutely. And the commitment we see is just the hours that our people are putting in. It's above and beyond. We're getting -- overtime alone is $600,000 a month just in overtime. These people are literally choosing to give up personal time for their work life and for their work families. And it's to the point where, somebody pinch me! I can't believe that it's even real sometimes. They are above and beyond, but they realize that we're in the middle of this wave right now. The refinance market will die down. We're starting to see the normalization that we see in the off season of home purchases. Still going to be record setting for November, December, January, and February, but it's certainly lower than the dog days of summer when most homeowners or most purchasers actually go out and find a house and move in.


Bret Keisling: 22:54 Let's talk, if we can, a little bit about the transaction and I'm not looking for details, but for selling shareholders or potential shareholders that might be listening to this, can you give one or two, either examples of stuff that you were pleasantly surprised, or maybe here were some bumps. Can you just talk about someone who was in your shoes and what they might look for if they look to make a transition?


Doug Schukar: 23:21 So the surprises on the good side are just to watch the company grow and watch the mindset of the employees change. Where they realize, as I mentioned earlier, that it's not just a nine to five job anymore. There's something bigger than just their paycheck that they're working towards. And to watch them start to get the message.


Doug Schukar: 23:44 One of the negative surprises was that not everybody knew what we knew from an executive team going in. In other words, we kind of could see where this was going to go, and we forgot to remember or forgot to think about that most people that work for an organization don't understand how the ESOP works. And so we stubbed our toe on some great opportunities to have company-wide Zoom meetings, calls, however you want to do it, to really start to spread the concept better. Our competition, the same ones that had used the death of a, of a competitor to try to scare our people into leaving and joining a larger firm out of Southern California that would have a succession plan in place and not just a single owner that. That same firm every day uses the tactic of, oh, they're lying to you. It's just not real. Oh, it can't be. And so one of the excitements that we saw just in the end of last year, where there's always a certain number of people that retire and get a cash payout immediately because of what their vesting would be due to the government requirements of retirement. And so when we can leverage that and those communications of the 12 or 13 people that we paid out, then people can start to see the traction of it. It gained momentum and it being real.


Doug Schukar: 25:18 So to the surprises, to the, to the benefit, it was just to watch the mindset of the employees to watch it grow. And then to watch the company's valuation continue to grow as a result. And to the negative surprises, it's just understanding that your people that work for your organization are never going to know what the executive team knows through osmosis. You have to have a plan in place to articulate the message and explain this is what's going to happen tomorrow. It's not a get rich quick, overnight scheme. It's not that at all. It is a government endorsed retirement plan, and it will take time, but you will end up retiring better than you perhaps ever dreamed of in the past.


Bret Keisling: 26:00 That is a lesson that is hard for a lot of companies to learn. And it takes some time, but you are at an advantage, the statements, the annual statements, will speak very loudly and many, many people are going to come on board mentally and emotionally. Particularly, you're only three years in, at some point when you have people starting to leave fully vested and now it's not a number on a piece of paper it's an actual check. A lot of people are going to jump right in.


Bret Keisling: 26:33 And one of the things that I've been impressed in, and as I said earlier Vince Kruse, who's just a wonderful guy and very passionate about employee ownership, as well as mortgages. He's just great at what he does. But he and I have checked in over the last eight or ten months, just making sure we're okay during the pandemic and all that kind of stuff. And when he was telling me in maybe may, that you guys were doing so well and, and I think at that point, year to year breaking records.


Bret Keisling: 27:03 I put on my ESOP trustee hat and I said, hey, Vince, one thing companies should look out for is the repurchase obligation because if you're unexpectedly really successful, you're on the hook to pay these funds at one point, one of the things that impressed me was in the course of a couple of minutes of the conversation, Vince said, oh, by the way I reached out and it might've been your CFO, I don't recall. I reached out to the executive team and mentioned, what about repurchase obligations? When you set up your plan, apparently part of your plan, nd I've never seen it before is to do an annual repurchase obligation study to make sure you track that. So on the one hand, it seems that you're very thorough in how you did your plan and you may have other examples, and it's just very thorough. That may be an offshoot of you, not all the I's and cross the T's as a mortgage company anyway, but are there other things to the plan itself that you think were important?


Doug Schukar: 28:08 Well, you hit one of them, you hit the nail on the head. So in fact, we just finished our first repurchase obligation study in conjunction with our advisors and our trustee. And everybody's just excited because it looks like it came in as strong as it could and there was, there was no hiccups and there's no concerns that anybody could see based on the content and the analysis. And so, yeah, the secret to me is to surround yourself with the great advisors. Yeah, I was taught that from my father before me to figure out what you're great at and figure out, more importantly, what you're not great at and make sure that whatever you realize you're not great at that you find the best you can to surround yourself with. And it kind of dovetails into another message we firmly believe in, and that is that he or she who surrounds themselves with the greatest minds, M-I-N-D-S, minds, wins.


Doug Schukar: 29:03 And so we went out and got who we felt were our best advisors from both an ESOP standpoint and from a legal standpoint and really allowed them to run with the ball as best they could and at full fledge our confidence in all their decision-making and that really was the key to it. And so our, I think our ESOP structure from top to bottom is very strong. We didn't do a traditional leveraged ESOP as so many of your listeners are probably more familiar with, instead we did a contributory. You saw where I literally sold them the voting rights for a dollar by the time it was said and done. And it's just working well for us. It took out a lot of the onus of what trustees oftentimes fear going in. It probably eliminates a lot of the exposure from what a Department of Labor audit might look like and we're expecting that, I would think, after three years, four years, or five years. Although our legal tells me we may never have one because there was really nothing that the employees are paying at all and essentially everything is given to them from this standpoint. And nobody's really sure who would audit what, when, when that's kind of the facts that are involved. So it's just a little bit of a different course, but we were very happy with it.


Bret Keisling: 30:16 It's funny because the DoL, and God bless him, the fact that everything has been teed up beautifully, doesn't stop the potential of an audit as you well know. The one thing that I like to remind the listeners, and we've done a lot of episodes about legal and regulatory stuff, and the DoL looking over our shoulders is very real. Fact of the matter is for all of the appropriate attention, maybe 1% of ESOP companies get audited, you know, so I think our focus is if there's an audit that goes bad, it's bad for all of us, but, and it certainly doesn't hurt to be prudent, but the risk of audit is very small. And it sounds like you teed up stuff properly. Would you like -- if you would like, do you care to mention who the advisors were?


Doug Schukar: 31:09 We used BKD who heads up, their practice is headquartered out of Bowling Green, Kentucky, and they have a strong regional presence from an audit standpoint here in the St. Louis metropolitan area.


Bret Keisling: 31:24 They are very well-regarded. I know a couple of their folks from the national conferences and a great firm. And they've just done a great job for you. The other thing I'd like to just quickly tell the listeners is I smiled when you said you got the repurchase study and everything looks good. I've seen a number of them, haven't seen yours, don't have a clue what it specifically says, but I'll sum it up. You have a decent amount of liability. That's what it is to the shareholders who are now getting vested and that sort of thing. But you also have the resources to pay it. You know, that ultimately is what the repurchase study always is. So that is great news. What are you hoping for, Doug, in terms of, as you move forward, both as a company, and is there anything employee ownership-wide... -wise that you might like to see happen?


Doug Schukar: 32:21 That's a good question. You know, what we're trying to decide right now from an executive team is where to stop, right? So, in other words, where do we stop this is growth and where we stop our production. Because we don't want to be the next US Bank or Bank of America, or any of these large behemoth mortgage entities. It's just not what the business plan is all about. And so, ideally we've already exceeded our 10 year projection. We'll exceed that by far this year. And the question is, how much bigger do we want to be? And so we're thinking we're at 900 employees effective this morning. We think maybe we're going to stop it at a thousand, and then just kind of sit back and see what happens from there and make sure we can maintain our boutique status as opposed to a, some kind of a national behemoth.


Bret Keisling: 33:09 So, Doug, with anything else, any other thoughts regarding the ESOP, employee ownership, or anything else you would like to share that I didn't give you the opportunity?


Bret Keisling: 33:18 No, I, if I had to put the exclamation points and two or three of them after anything, it's the fact that not only does it become a tremendous recruiting tool, but it also becomes a phenomenal retention control. And so I don't know what any other business organization would probably wish for more than that, then to recruit the best while keeping the best at the same time.


Bret Keisling: 33:39 Those are great points. And let me ask you to just opine on one more thing for the selling shareholders, the people who were, who are currently, in the shoes that you were in, can you just share for a moment about the man who gave the initials, DAS, your legacy with the company now that it's transitioned to employee ownership than if you hadn't. In other words, do you see this making your legacy more permanent?


Doug Schukar: 34:11 Yes. my goals kind of just changed as I got older, right? So I'm 56 right now. And I was, as I mentioned, I was the number one loan officer in St. Louis and found my way into management and then into business ownership. And my goal has just changed. And so my goal used to be, to do as much loan volume as I could to make as much money for you know, for my income and for my family. I didn't get married until I was later in life. I got married when I was 40. So for all those years, you know, I had a house, I had a, I had a dog, I had a car. And so I was able to stash away enough funds to be very, very comfortable. And so I got to a point where I was very comfortable and didn't need to make any more. Nobody's violin was going to be out for Doug Schukar, and my goal changed! And now the goal has become, my warm fuzzy is to see how many different lives I can affect in retirement and what that looks like. And people that otherwise, that helped me to get to where I am today, how can I give that back? And I think this is the right tool. I don't think there's any tool that can do it better than what we have created.


Bret Keisling: 35:22 Doug, that is beautifully stated and, and very meaningful and important. Let me close with one final question. About two months ago on one of my podcasts, I shared what I call my EO "A-ha moment." And it was the moment, and I'm certainly not going to repeat it again, but I was the CEO of a 50 employee ESOP and an employee said something at our first meeting and I was like, holy moly, this is completely different! And I've now in the last couple of months, shared EO A-ha moments with a variety of people. You have been on a path that has gotten better. Is there any moment that you would say, wow, it looked good. This is the moment, "A-ha," where I realized it was incredible.


Doug Schukar: 36:15 The valuation from last year. When it went up six-fold, nobody expected that. You know, each one of us in the executive team kind of wrote down a number of where we thought it would be. And again, I did that after Procter & Gamble and before mortgage banking, I was in small-scale mergers and acquisitions. So we dealt with a lot of valuations on different organizations and so I've got a pretty strong familiarity with how they're done, but even I was off on my best guess and what I thought the growth of that would be from a numbers standpoint. And then I'm going to be even more excited to see what it does again. I don't think you can have back to back 600% growth type numbers. I'm not even forecasting that, but the statistics this year are equally, if not stronger, equally as strong, if not stronger than last year's numbers, but I can't imagine a growth rate. But these are, these are the A-ha moments. I think we're in it right now. Just to see these statements for the various employees of the organization.


Bret Keisling: 37:14 I love it, Doug, thank you so much for what you're doing for the almost a thousand employee owners. And you're also putting out a lot of good mortgages out there. So I really appreciate your coming on the podcast and sharing your experiences.


Doug Schukar: 37:29 Thank you. I appreciate you having me.


Bret Keisling: 37:32 I hope you enjoyed that conversation with Doug Schukar. He packed a whole lot of great inspiring information in there. I want to thank Vince Kruse for introducing me to Doug and Tracie Grimm at USA Mortgage for helping to facilitate the arrangements.

Bret Keisling: 37:47 Vince Kruse joined me on last week's Mini-cast, Episode 109, to share his EO "A-ha moment." But as you'll hear on that episode, it started with the rollout that Doug talked about during this podcast. Vince was one of those ones who said, "huh?" So check out Episode 109 of the Mini-cast. And you can get all of our archived episodes at www.ESOPpodcast.com or wherever you get your podcasts. And if you want to support our work, we really do appreciate it. If you would subscribe, follow, or like us, et cetera, et cetera. We really do appreciate that feedback.


Bret Keisling: 38:29 Thank you so much for listening. Our country's going through a whole lot together right now and in the spirit of employee ownership, that's how we're going to get through it, together. This is Bret. Keisling have a great day.


Bitsy McCann: 38:46 We'd love to hear from you! To contact us, find us on Facebook at KEISOP, LLC and on Twitter @ESOPPodcast. To reach Bret, with one "T", email Bret@KEISOP.com, on LinkedIn at Bret Keisling, and most actively on Twitter at @EO_Bret. Again, that's one "T". This podcast has been produced by The KEISOP Group, technical assistance provided by Third Circle, Inc. and BitsyPlus Design. Original music composed by Max Keisling, archival podcast material edited and produced by Brian Keisling, and I'm Bitsy McCann.


Standard Disclaimer: The views expressed herein are my own and don't represent those of my own firms or the organizations to which I belong. Nothing in the podcast should be construed as guidance or advice of any kind in any field and the fact that I mentioned an organizational website or an advocate or a company on a podcast does not reflect an endorsement, but if you've heard your name or your group's name mentioned on this podcast, I'd love to have you come on and talk about it yourself.


A note on the transcript: This transcript was produced by Temi, an automated transcription service. While it has been reviewed by The ESOP Podcast, we can not guarantee the accuracy of the transcription. Please refer to the original audio when citing sources.