Banks in South Florida struggled to restore service Tuesday, and several announced special lending programs to help repair the devastation wreaked by Hurricane Andrew.

None of the state's four largest banks was able to put a price tag on damage to its facilities. Florida officials have said statewide damage may total $20 billion, with at least three-fourths of that concentrated in Dade County.

Economists, meanwhile, said the Florida economy could experience some stimulative effects from anticipated rebuilding, similar to what occurred after Hurricane Hugo, which devastated the South Carolina coast in 1989.

$1 Billion Set-Asides

First Union Corp., Charlotte, N.C., announced late Monday it had set aside $1 billion for loans in south Florida. A First Union spokeswoman said the loans would be offered at reduced rates "but still within prudent underwriting standards."

Jacksonville, Fla.-based Barnett Banks Inc. committed itself Tuesday to make $1 billion in emergency loans. A Barnett spokesman said the company had not yet determined all features of the program but added that it would include "special" provisions.

NationsBank Corp., Charlotte, and Orlando-based Sun Banks Inc. are expected to follow suit with their own special programs. Sun Banks is a subsidiary of SunTrust Banks Inc., Atlanta.

Aside from helping their own employees cope with the wreckage left by the storm, a major priority for Florida banks Tuesday was to restore service in Miami's Dade County, which was hardest hit by Monday's hurricane.

With electrical and water systems down in much of the county, banks were bringing in portable generators to get their branches back up and running.

Barnett had five of its 42 branches open in Dade Tuesday; First Union, one of its 60 branches; and NationsBank, four branches. Sun Banks expected to open seven of its 25 Dade County branches today; all were closed Tuesday.

Check processing at the Federal Reserve Bank branch office in Miami was shut down by the storm. A spokeswoman for the parent Atlanta Fed said she could not estimate when check sorting would resume. "We're working to get the power back up," she said.

All of the Miami Fed office's electronic payment services, such as funds transfer and automated clearing house functions, were being handled out of Atlanta. The Miami Fed did continue making cash deliveries to banks.

Economic Stimulation Foreseen

Most experts said the South Florida economy can expect some stimulative effects from Andrew after insurance payments begin pouring in.

David Orr, chief economist at First Union, drew a parallel to the third quarter of 1989, when Hurricane Hugo hit the South Carolina coast, causing more than $5 billion in damage.

Personal income in the state dropped at an annualized rate of just more than 20% during that quarter because of the storm but made a 40% rebound in the following quarter, when insurance payments and federal disaster aid began to arrive.

Spurred by construction, income growth continued at rates of 13% and 10%, respectively, in the two succeeding quarters.

Although the nation as a whole experienced an economic downturn in the summer of 1990, South Carolina didn't feel the full effects of recession until 1991, Mr. Orr said.

But Mr. Orr also warned that much of this growth was an "illusion," since personal income growth rates don't take into account property losses suffered.

"As the rebuilding takes place," he said, "you get an illusion of a better growth climate because the disaster occurred. What is a personal tragedy and a terrible amount of balance sheet damage has the perverse effect of stimulating some of the more common kids of economic numbers that we look at."

Banks in South Carolina reported a flood of deposit in the wake of Hugo, and Barnett's chief economist, John M. Godfrey, expects to see a similar phenomenon in South Florida.

"There may be some temporary parking of insurance money in accounts," he said, "but I think that would get spent as construction work is done."

Hurricane Hugo prepared the banks for some of the problems they face after Hurricane Andrew. "The major lesson of Hugo is that the best of your backup plans is never good enough," said Sheila Dillon, senior vice president of corporate security at First Union. "You need backups of you backups."

Helping Bank Employees

After Hugo, First Union was particularly impressed with the need to help its own employees get their lives back together with special loans and other types of aid.

Tuesday, it sent 120 employees from offices in central and northern Florida to help out in the South Florida branches.

If the crisis persists beyond four weeks, First Union is prepared to send in additional backup people from other states, Ms. Dillon said.

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