Staying Above Water

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Preparation, planning, people and social media buoyed three Louisiana community banks when the rains rolled in

By Ellen Ryan

The first sign of trouble came 40 minutes after sunrise in a tweet from the Bank of Zachary in Zachary, La.: “Due to flooding and dangerous road conditions, our Hooper Road office in Central will be closed Friday, August 12. Drive-up open at Main.”

Last August, a stalled storm system poured almost 7 trillion gallons of rain on Louisiana, killing 13 people and flooding some 150,000 homes and 20,000 businesses. Levees overflowed. Cars and caskets floated.

But that Friday the 12th, no one seemed worried. “It was not a big storm. It just kept raining,” says Heather Roemer, vice president of corporate affairs at the $1.1 billion-asset Business First Bank, based in Baton Rouge.

When the bank’s 11 locations (of 17) closed early because of the storm, the day’s processing was routed to its unaffected Shreveport office.

The executive committees of Business First Bank, the $230 million-asset Bank of Zachary, and the $1.5 billion-asset First Guaranty Bank in Hammond, La., conferred Friday and went home.

Around Baton Rouge, whose flat suburbs sit slightly below the city, two rivers had nowhere else to go. Water rose and spread.

About 130 community banks have a presence in Louisiana; this is the story of how just three in the central and south regions of the state fared when the elements overcame the everyday.

Cleanup and aid
Over the weekend, officials at all three community banks contacted staff. With AT&T—by far the largest cell carrier—barely functioning, they tried landlines, Verizon cells, email, Facebook, FaceTime and word of mouth. By Sunday afternoon they’d learned that everyone was safe.

Jude Melville, Business First Bank’s president and CEO, contacted the 15 to 20 employees known or most suspected to be flooded out. President and CEO Preston Kennedy at the Bank of Zachary connected with all 50 of his employees.

“Some had evacuated to other employees’ homes. That’s community banking.”
—Heather Roemer, Business First Bank Roemer

“Some had evacuated to other employees’ homes,” says Roemer. “That’s community banking.”

Ten of those 50 Bank of Zachary employees were on emergency leave the first week—some trapped at home and some dealing with flooded homes. “You have to get that drywall out before mold and mildew grow,” Kennedy says.

In fact, adds the bank’s senior vice president and chief lending officer, Mark Marionneaux, “we sent teams of employees to some homes to help”—five to seven some days and 12 to 15 on Saturday.

Business First Bank responded to employee needs with gift cards, diapers and sack lunches; pay advances up to $3,600; up to two weeks’ paid leave; and an assistance fund that awarded 20 grants to help employees make repairs.

Bank of Zachary also set up an employee relief fund. First Guaranty Bank offered a no-credit-check, 3.5 percent loan up to $10,000 to precede Federal Emergency Management Agency aid.

The water destroyed more than homes. First Guaranty Bank’s Denham Springs branch took on 4 feet of water and will reopen in 2017. Says Desiree Simmons, vice president, loan administration and marketing, “We got the cash out but lost teller tickets, teller stamps, documentation,” even some safe deposit boxes. It’s Watson branch, less damaged, was closed for months. A trailer opened outside in two and four weeks, respectively.

Business First Bank’s Gonzales branch was closed two days because of impassable roads. By Tuesday at Denham Springs, the chief information officer had a disaster recovery team ripping out drywall, furniture and soaked carpet. The drive-through reopened after 10 days, but the lobby took more than two months.

Community responds
Meanwhile, just 20 percent of affected residents and businesses had flood insurance, according to Ginger Laurent, chief operating officer of the Louisiana Bankers Association. In fact, few were required to, because many areas never expected to flood. All three banks offered loan payment deferrals to customers: Business First Bank for 60 days, the others for 90.

For immediate needs, First Guaranty Bank and Drago’s Seafood Restaurant offered hot takeout meals from bank parking lots—2,500 meals in Denham Springs and another 6,000 to other communities. Fifteen branches held food drives, and the Walker branch opened two computer hubs and printers so the public could file for government disaster relief.

“One customer had had flood problems before and said that this time, thanks to social media, she learned so much more.”
—Ginger Laurent, Louisiana Bankers Association

First Guaranty Bank posted on Facebook when its branches reopened, and ATMs were replenished. Exhausted, hungry neighbors “liked” posts about the Drago’s dinners many dozens of times, and TV coverage brought hundreds of thousands of “shares.” Social media took football star Todd McClure’s fundraising effort, backed by the Bank of Zachary, to the National Football League and ICBA members nationwide.

Feeding Friends in Need—Employees at First Guaranty Bank in Hammond, La., and Bank of Zachary in Zachary, La., helped distribute meals to various residents after severe flooding caused historic havoc  and destruction.

Feeding Friends in Need—Employees at First Guaranty Bank in Hammond, La., and Bank of Zachary in Zachary, La., helped distribute meals to various residents after severe flooding caused historic havoc and destruction.

The Louisiana Bankers Association sent its members information about handling contaminated currency, offering payment deferrals, verifying checks and so on. All the banks passed along material from government agencies about cleaning and repairs, scams and financing.

“One customer had had flood problems before and said that this time, thanks to social media, she learned so much more,” Laurent says.

“People have rallied together though this,” says Kennedy, whose officers met every other day for the first two weeks. Adds Simmons, “It makes you feel good about humanity and being able to help.”

Preparing for Disaster

Under Water—A view from a helicopter shows flooding and devastation in Baton Rouge, La., on Aug. 15.

Under Water—A view from a helicopter shows flooding and devastation in Baton Rouge, La., on Aug. 15.

Every year for the last decade, Louisiana’s Emergency Preparedness Coalition has met in nine well-attended meetings around the state. Experts from first responders to regulators to meteorologists add expertise, and these relationships help financial institutions deal with pandemics, shootings, cyberattacks and natural disasters.

“In the middle of an event is not when you want to introduce yourself to the people who keep things moving,” notes Ginger Laurent, chief operating officer of the Louisiana Bankers Association. Those relationships, she says, helped customers start getting aid checks quickly.

If your community bank’s region and state don’t have such an active emergency preparedness group, Laurent highly recommends convening one.

Here are some continuity and emergency response plans, that community banks learned during this summer’s flooding in Louisiana:

What worked for Louisiana’s community banks in responding to the historic flooding?

  • All officers had everyone’s full contact information.
  • Banks offered flexibility and mutual support for employees who needed emergency leave.
  • Banks maintained a strong loan program to help portfolios withstand damage to properties used as loan collateral.

What did banks learn to improve their disaster preparedness?

  • Have response plans address loss of Internet access—to the contact sheet, for example.
  • Make sure several people can update the hotline; some may lose phone service.
  • Have a set of keys to all branches at headquarters, especially because some staff may need to report to unfamiliar locations.
  • Expect floodwater to appear where not predicted.
  • Suggest more strongly that home and business customers have flood insurance.

Ellen Ryan is a writer in Maryland.

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