Hurricane aftermath: Bankers’ stories of community resilience

Published September 12, 2017 12:39 PM

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Updated June 1, 2021 1:43 PM

1 Min Read

Houses and trees stand surrounded by floodwaters from Hurricane Harvey in this aerial photograph taken above West Columbia, Texas, U.S., on Wednesday, Aug. 30, 2017. Unprecedented flooding from the Category 4 storm that slammed into the state's coast last week, sending gasoline prices surging as oil refineries shut, may also set a record for rainfall in the contiguous U.S., the weather service said Tuesday. Photographer: Luke Sharrett/Bloomberg

Luke Sharrett/Bloomberg

Wrath of Harvey and Irma

Hurricanes wreaked havoc over Florida, Georgia, Texas and Louisiana. Harvey caused severe flooding, while Irma whipped up high winds. Several banking-related narratives emerged over that time. Here is a look at those stories.

Damage to Miami following Hurricane Irma

A worker cleans up trees nearthe Conrad Building on Brickell Avenue after Hurricane Irma in Miami, Florida, U.S., on Monday, Sept. 11, 2017. Irma smashed into Southern Florida as a Category 4 storm, driving a wall of water and violent winds ashore and marking the first time since 1964 the U.S. was hit by back-to-back major hurricanes. Photographer: Jayme Gershen/Bloomberg

Jayme Gershen/Bloomberg

Irma could have been worse

The hurricane was expected by many to deliver catastrophe. Estimates for total damage have also been reduced from $200 billion to $49 billion, according to Bloomberg. That leaves bankers largely looking to restore power and confirm the status of customers and employees.

Damage in Miami following Hurricane Irma

The entrance to a parking garage is seen flooded after Hurricane Irma in Miami, Florida, U.S., on Monday, Sept. 11, 2017. Irma smashed into Southern Florida as a Category 4 storm, driving a wall of water and violent winds ashore and marking the first time since 1964 the U.S. was hit by back-to-back major hurricanes. Photographer: Jayme Gershen/Bloomberg

Jayme Gershen/Bloomberg

SBA’s go-it-alone approach

The SBA has indicated that it favors providing direct financial support to those impacted by Harvey despite increased interest from bankers to help the agency. The SBA’s decision could also have an influence on how aid is distributed to people in Florida recovering from Irma.

Heroes emerge

Harvey provided an opportunity for bankers to step up and help their communities. A number of institutions are providing staples such as toilet paper, milk, water and bread. Brent Cockerham at Moody National Bank stepped up even more by ferrying stranded residents to safety in hard-hit Friendswood, Texas.

A vehicle sits damaged by debris after Hurricane Harvey hit Rockport, Texas, U.S., on Saturday, Aug. 26, 2017. As Harvey's winds die down, trouble for Texas has just begun as days of flooding rains across the heart of U.S. energy production threaten the country's fourth-largest city and leave farmers struggling to save horses, cows and crops. Photographer: Alex Scott/Bloomberg

Alex Scott/Bloomberg

Funds start to flow in

Several groups committed funds to help bankers and other victims recover. Wells Fargo and JPMorgan Chase each pledged $1 million, while Hilltop Holdings in Dallas donated $50,000 to the Red Cross. The Independent Community Bankers of America and the Texas Bankers Foundation launched funds to help bankers impacted by the storm.

An attendee inspects an LG V30 smartphone on the LG Electronics Inc. exhibition stand at the IFA Consumer electronics show in Berlin, Germany, on Friday, Sept. 1, 2017. The IFA features 1,805 exhibitors from the global technology industry and runs to September 6. Photographer: Krisztian Bocsi/Bloomberg

Krisztian Bocsi/Bloomberg

A helping hand

There is a growing belief that technology helped many banks avert a cash crunch that often follows a natural disaster. BBVA Compass, for instance, quickly added an algorithm to its mobile app that increased the monthly deposit limits for customers.

A house and vehicles stand in floodwaters due to Hurricane Harvey in Spring, Texas, U.S., on Monday, Aug. 28, 2017. A deluge of rain and rising floodwaters left Houston immersed and helpless, crippling a global center of the oil industry and testing the economic resiliency of a state that's home to almost 1 in 12 U.S. workers. Photographer: Luke Sharrett/Bloomberg

Luke Sharrett/Bloomberg

Optimism on commercial exposure

The jury is out on how much of a hit banks took as a result of Harvey, though Cadence Bancorp in Houston struck a relatively positive tone about potential commercial losses during a recent conference call. Exposure to flooding homes is unclear, CEO Paul Murphy Jr. told investors.

Houses stand immersed in floodwaters from Hurricane Harvey in this aerial photograph taken above West Columbia, Texas, U.S., on Wednesday, Aug. 30, 2017. Unprecedented flooding from the Category 4 storm that slammed into the state's coast last week, sending gasoline prices surging as oil refineries shut, may also set a record for rainfall in the contiguous U.S., the weather service said Tuesday. Photographer: Luke Sharrett/Bloomberg

Luke Sharrett/Bloomberg

High costs

Flooding could cause damages of $25 billion to $37 billion to residential properties, with about 70% of those homes lacking insurance to protect against water, according to CoreLogic. The Department of Housing and Urban Development will take on the complicated task of getting victims back into permanent residences.

A "Dry Gully" sign stands in floodwaters due to Hurricane Harvey in Spring, Texas, U.S., on Monday, Aug. 28, 2017. A deluge of rain and rising floodwaters left Houston immersed and helpless, crippling a global center of the oil industry and testing the economic resiliency of a state that's home to almost 1 in 12 U.S. workers. Photographer: Luke Sharrett/Bloomberg

Luke Sharrett/Bloomberg

Flood insurance

Massive flooding is sure to pressure lawmakers to resolve differences over the National Flood Insurance Program, though they approved a short-term extension for three months on Friday as part of a package for Harvey aid.

Debris is seen inside of a damaged Popeye's Louisiana Kitchen Inc. after Hurricane Harvey hit Rockport, Texas, U.S., on Saturday, Aug. 26, 2017. As Harvey's winds die down, trouble for Texas has just begun as days of flooding rains across the heart of U.S. energy production threaten the country's fourth-largest city and leave farmers struggling to save horses, cows and crops. Photographer: Alex Scott/Bloomberg

Alex Scott/Bloomberg

Test for SBA

Harvey presents a test for the Immediate Disaster Assistance Program, which the Small Business Administration recently formed to provide fast decisions on recovery loans. The program backs 85% of bridge loans – capped at $25,000 – made to small businesses hit by a disaster. One concern is a lack of awareness; few bankers know IDAP exists.

A State Farm catastrophe claims adjuster measures the exterior of a home affected by Hurricane Harvey in Rockport, Texas, U.S., on Saturday, Sept. 2, 2017. Hurricane Harvey inflicted damage on 1.7 million homes that could top $11.5 billion in insured losses, according to CoreLogic Inc. Photographer: Eddie Seal/Bloomberg

Eddie Seal/Bloomberg

Rebuilding begins

Several sectors should experience more activity in Harvey’s wake. Multifamily and hospitality should have higher demand as people seek short-term housing. Industrial firms and certain retailers could benefit from increased sales as people look to rebuild and remodel. Much of the recovery will depend on insurance and government money, along with a quick response from bankers.