Slideshow Hurricane aftermath: Bankers’ stories of community resilience

Published
  • September 12 2017, 12:39pm EDT
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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.

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.

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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.

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.

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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.

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.

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.

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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.

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.

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.