A spate of disasters is reminding bankers to dust off their emergency preparedness plans.

The United States has been hit by three highly destructive hurricanes in recent months, and wildfires are raging through California. While hurricane season is set to end at the end of next month, bankers are taking note about the need to stand ready.

Few know that better than Florida bankers, who deal with the threat of storms each year and quickly worked to check on their employees, clients and operations after Hurricane Irma. The storm, which hit the state a month ago, caused dozens of deaths and billions of dollars’ worth of damage.

“Unfortunately, living in South Florida doesn’t allow us the luxury of becoming complacent,” said Rick Kuci, president and CEO at Grove Bank & Trust in Miami. “We’re struck by a tropical storm or hurricane almost each and every year in some fashion. … It is part of our landscape, our history and our future.”

Banks, for the most part, are in a better position today to withstand natural disasters since they have more redundancy in place to ensure operations aren’t disrupted, said Scott Sargent, a lawyer at Baker Donelson. Preparations for handling an emergency are largely the same regardless of the type of disaster.

“I don’t want to say the nature of the damage doesn’t matter, because it will determine how you respond,” Sargent said. “But all disasters have the same essential effect. They interrupt services. They destroy buildings. They interrupt business.”

Checking on employees and customers should be the top priority, Sargent said.

Chart showing the costs of natural disasters hitting the U.S. in the latter part of 2017.

The $651 million-asset Grove Bank, a unit of Coconut Grove Bankshares, accomplished this by reaching out to clients before Irma struck, helping them withdraw funds for emergency purposes, secure documents and valuables in safe deposit boxes and access accounts through online and mobile banking, Kuci said.

Each June, Marine Bank & Trust in Vero Beach, Fla., updates its business continuity plan, said President and CEO Bill Penney. When Irma struck, the $219 million-asset bank stayed in contact with employees through a group texting service. The message from Penney was clear: “I do not care where you are or where you evacuated to — I only care that you are safe.”

It seemed like an obvious decision for Marine.

“You cannot get the bank up and running to serve customers if you do not know the location and safety of your employees,” Penney said. “Every storm is different in how it impacts road safety, building structures, power and connectivity. Therefore, the plan must be flexible and expect the unexpected. Build in redundancy.”

Banks need to consider ways to provide charitable support before and after a storm hits. Executives are usually quick to announce plans to make donations to organizations like the Red Cross, but there are other ways to help.

Grove Bank advanced its payroll date before the storm to make sure its employees could have access to money. The bank also offered its staff paid storm days, Kuci said.

Capital City Bank will cover hotel stays for employees in mandatory evacuation areas who can’t afford to leave or have nowhere else to go, said Bethany Corum, the Tallahassee, Fla., bank’s co-chief operating officer. Employees of the $2.8 billion-asset bank who lose power can get reimbursed for perishable food items.

It may also make more sense for banks to provide support for a few weeks after a storm has passed and the news cycle has moved on, said Marian Stern, a principal at Projects in Philanthropy. Branch staff or personnel from a local small-business division could reach out to customers to check on their rebuilding needs.

“Sometimes you haven’t heard about a disaster for a while — but the needs are still there,” Stern said. “I think that’s where banks have the opportunity to kick in and become leaders to sustain the help given to families that are still suffering.”

Banks should also run through practice disaster situations so they can make adjustments to their plans.

Jack Henry & Associates helps banks go through different scenarios where, for instance, a key facility is knocked out or a certain person is unavailable, said Stacey Zengel, president of Jack Henry Banking. He recommends that banks do this annually.

“There is not a state that is impervious to natural disasters,” Zengel said. “You need to prepare for it across the board. The nice thing about hurricanes is they are sometimes forecast.”

The Atlantic hurricane season usually ends on Nov. 30, so coastal bankers could face another storm. Hurricane Nate recently became the fourth hurricane to make landfall in the U.S. this year. Given their experiences with storms, Florida bankers said that they never become complacent and that they are prepared for the next challenge.

“We would be ready to go again tomorrow if we saw something that caused us concern for any of our markets,” Corum said. “Candidly, because we had been through an exercise and through a real drill, our response would probably be even tighter.”

Jackie Stewart

Jackie Stewart covers community banks and mergers and acquisitions for American Banker.