8. ‘Branch-land’ staggers

Bob Tusa and his wife, Nancy, decided to ride out Katrina in their French Quarter apartment.  Tusa was responsible for the 50-plus branches and 750 retail employees in the New Orleans area.  A colorfully outspoken man, he was a career banker who joined Hibernia when it acquired First National Bank of Jefferson Parish in the 1990s.  Friends pleaded with the Tusas to evacuate, but they wanted to stay.

BOB TUSA: 'Like yodeling in a canyon' / Photo: Russ Hoadley

BOB TUSA: ‘Like yodeling in a canyon’ / Photo: Russ Hoadley

After the storm, he remembered walking to Canal Street and seeing floodwater flowing.  He also saw some looting.  “Things began to get scarier.”  As the water rose, he realized the city was “ridiculously blasted.”  He was stunned by the “mind-boggling damage.”  His Jefferson Parish home had been on the market, and he thought the “house sale was probably in the dumpster.”

Eyewitness accounts

As soon as he began trying to communicate, he found it was like “yodeling in a canyon.”  Texting worked but was difficult.  In the first few days, he and his boss, Kyle Waters, who rode out the storm in a Metairie condo, provided the first on-the-ground reports to the rest of the management team.  Tusa concentrated on getting several offices opened in Jefferson Parish as part of a “shared bank” plan brainstormed by Waters and spearheaded by the Louisiana Bankers’ Association.

Not too fast

He and his managers also were busy finding staff, evaluating damage, getting unfinished work out of the branches and ATMs running.  Tusa urged his superiors not go too fast; not to open offices before they were ready.  But he understood the “nearly insatiable” appetite to get back in the game.  He therefore focused on the high-visibility Main Office – Hibernia’s headquarters – in the heart of New Orleans.  Manager Royce Matheny succeeded in opening it on the last day of October.

ROYCE MATHENY: All he could to help out / Photo: Russ Hoadley

ROYCE MATHENY: All he could to help out / Photo: Russ Hoadley

Matheny, 60, was manager of Hibernia’s signature Main Office for seven years.  Prior to that, he worked briefly for Iberia Bank and 17 years for FNBC before it merged with Bank One.  He and his wife, Evelyn, married 37 years, had three adult children, 37, 33 and 22.  A consummate bank manager, he felt the burden of getting his landmark branch re-opened.  It was the company’s headquarters office, located in an elegant 1920s edifice with marble lobby and soaring columns.

Matheny evacuated to Monroe, then Vicksburg.  Unable to get back to New Orleans, he worked from Monroe, then the North Shore to help colleagues.  At the Pontchartrain branch, there was $200,000-worth of wet deposits to be dried and processed.  Then, there were thousands of safe deposit box files, contracts and signature cards to be sorted.  Co-worker Laura McLaughlin used an iron to smooth and dry many of them.  Matheny made “proof runs,” hauling bundles of deposits to be processed.  Once he transported $400,000 in cash in the trunk of his car to replenish a branch.  He filled in as a front-door “greeter,” helped with the crush of customers, even worked a drive-up window .

However, his focus was his own branch.  By mid-September, he was back with Jim Kitto, Elgin Weaver and Miguel Walker, doing whatever they could to re-open.  Weaver was manager of the undamaged St. Charles Ave. office in the Garden District.  Matheny recalled that he “lost everything, but he did a good job (getting his branch back in service).”  When the French Quarter branch was ready to re-open, he remembered that Walker, who had evacuated and had no place to live, simply said, “I’ll be there.”

MAIN OFFICE: A Landmark / Photo: Russ Hoadley

MAIN OFFICE: A Landmark / Photo: Russ Hoadley

As maintenance workers pumped out, cleaned and temporarily repaired his stately branch, Matheny searched for staff.  Of 16, at first, he could locate only four or five, and initially none had a place to live when they returned.  He wondered how the city and company could recover.

Matheny was grateful for the back-office help he got – from Operations, Loan Services and Accounting and Wire Transfer.  “People were able to step up to the plate.” However, he was sad for customers and employees who lost everything.  “I got a lot of courage from them.”  Despite all he was doing, “I felt guilty when I took time off.”  When he re-opened Oct. 31, “my people were proud of themselves.”  He also was proud to be part of an organization that helped so many.  It reinforced his own core value:  “I just wanted to do all I could to help out.”

Customers poured in

Although Tusa’s region was deeply wounded, there were areas – on the north shore and in Jefferson Parish – where business was booming.  In St. Tammany Parish, north of Lake Pontchartrain, customers poured into offices as fast as staff could open the doors.  Bank clients also clamored to get into damaged branches to check safe deposit boxes.  And small business customers – many in Jefferson Parish – worked feverishly to get their doors open so they could share in the “boom town” activity.

On the north shore, Tusa’s trade area manager, Matt Faust, hustled to clean up damage and get his locations open.  Jim Kitto, another trade area manager who lived in the 9th Ward, stepped in while his counterpart, Judy Dawson, was still stranded in Houston.  He began to work on branches within the besieged city, concentrating on the Garden District.

JUDY DAWSON: Stubborn issues / Photo: Russ Hoadley

JUDY DAWSON: Stubborn issues / Photo: Russ Hoadley

‘Never-never land’

Dawson, a 29-year Hibernia veteran, was trade area manager over offices in the New Orleans area.  She and her husband, Keith, married 28 years, had three children,  26, 22 and 18 in age.  A civic leader in Eastern New Orleans, she was one of Hibernia’s top community bankers. Evacuating was particularly difficult.

Her 83-year-old father did not want to leave.  Even her husband was reluctant.  By Sunday morning, however, she had organized a three-car caravan, although her father-in-law stayed behind.  Saying a rosary, Dawson started a 17-hour trek to Houston.

When she learned about the city’s devastation, the impact seeped deeply into her.  “I felt an overwhelming sense of despair, as if my life and my career had washed away.”  A good soldier, she reported to Houston’s bank  to help, but she felt stranded, unable to do much for her 250 employees.  “They were all scattered…” and she heard disturbing stories, like that of Regina McDowell who weathered the storm in her car as she fled to Mississippi.

Dawson returned in mid-October.  Her home and rental properties were devastated.  Like others, she had insurance and FEMA issues.  In eastern New Orleans, there was almost no power or city services.  At work, she faced stubborn issues … staffing, housing, getting branches repaired.  “We are still dancing in never-never land,” she sighed.

On the Northshore 

Faust, 50, had a fast growing market in St. Tammany Parish. Besides being Hibernia’s lead banker there, he also served on the Covington City Council.  After he and his wife Judy evacuated to Mississippi, he returned the day after the storm.  Although there was no electricity, and extensive wind- and rain-damage, he knew locations in Covington and Mandeville would be among the first to re-open.  Slidell was another matter.  Some of those offices had been devastated by storm surge.

Faust credited a lot of his area’s progress to the efforts of Laura McLaughlin, his “MOM” (market operations manager), and her assistant, Kathleen Krementz.  “They were here from day one, got the branches running, and got their hands dirty.”  He was pleased that all but two of 12 managers returned, although the staff of his Folsom office all went to work for a competitor.

The first branch he wanted to open was on Highway 190, and he had a generator to provide electricity.  Debbie Collins, the manager, pieced together staff, got money delivered and opened the doors.  They were swamped by customers.  The second to re-open was a Gretna office, under manager Kendra Toney.  Faust’s people had to work with erratic computers, telephones “going in and out” and huge volume.  He found the experience “incredible, especially how appreciative customers were even though they had substantial waits.”  And he was frankly amazed at the increase in traffic.  His people opened 40% more new accounts after the storm than the previous nine months.  Deposits swelled from $600 million to over $1 billion.  He realized that the future would bring a “new normal.”  He expected the parish population to grow by 25%, traffic to get worse, and customers to bring more business to the bank than ever before.

Jack of all trades

Laura McLaughlin, 40, epitomized the role of the market operations manager (MOM) in the recovery.  With 23 years at Hibernia, she was a jack of all trades.  After evacuating to Jackson, MS, with her husband, Michael and son, 5, where Katrina brought 100 m.p.h. winds, she was glad to get back to St. Tammany, even though it had been badly bruised.  She saw blinds flapping in the wind and daylight through cracks in the walls when she checked the Mandeville branch.  The Pontchartrain office in Slidell was devastated.  Desks and files were flung outside, papers strewn about.  Workers with pressure washers hosed down mounds of mud behind the teller line.

~ ~ ~ ~ ~

Laura McLaughlin ironed 1,095 safe deposit box records.

~ ~ ~ ~ ~

Soon she was talking to her office managers – Dixie Conques who got the Franklinton branch open and needed cash; Gwen Sawyer in Bogalusa who went to every employee’s home to call them back to work.  As she and other workers salvaged safe deposit box records, she ironed them –1,095 in all — to be able to decipher ownership information.

As her offices opened, she was concerned about how much employees could tolerate, with lines of anxious, emotional customers out the doors.  “Everyone had things going on, and they were all hard to solve.”  Closing each day was even a problem because they had to do it before a 6 p.m. curfew.  She was surprised how well people came together.  Other areas would ask, “What can we do?”  Her own job was  to do whatever it took, wherever, to bring things together.  She made spot decisions about opening and closing branches, how to process transactions, how to move money, how to find hotels for security guards, how to get wet cash to the Fed.

“The people I worked with didn’t worry about the decisions I made.  They were supportive.”

So many staff gone

It was going to be a problem for a long time getting staff for the the branches he was getting open, Tusa realized.  Eventually, about 140 “came off the payroll,” he estimated, but those who did return, “worked under grueling circumstances.”  He estimated it took 4-6 weeks “for people to heal.”Re-staffing branches was a big problem.  So many tellers and other bankers had fled.  Even when they were offered financial and housing assistance, branch staff could not always get back.

Tusa was impressed that the disaster had drawn people closer.  “Territorial disputes were gone.”  He felt “humor and decency” were driving much of his co-workers’ actions.

Business banking

BILL GALLOWAY: 'Courageous' decisions / Photo: Hibernia Corporate Communications

BILL GALLOWAY: ‘Courageous’ decisions / Photo: Hibernia Corporate Communications

Bill Galloway and his team of 21 business bankers began quickly calling on customers to see how they could help. Galloway earned Tusa’s vote for “most valuable player” because of “courageous credit decisions” he made.  Galloway, 46, first evacuated to Houston with his wife, Denise, and two young daughters.  His total team of 45 bankers and staff specialized in lending to small businesses.  While in Houston, he visited the Main Office known as Westheimer and found workspace for several of his people.  He left messages for all of them to make their way to any branch as soon as they could and begin contacting their clients.

Galloway received daily reports that showed which small businesses were overdrawn.  From these, it was evident that some customers had made deposits over the weekend before the storm, probably at branch night-deposit boxes, before getting out of town.  Expecting the funds to be available, they had begun drawing on them.  It appeared they were trying to meet payrolls and cover expenses, but their deposits had not been processed.  The largest overdraft on his list was $750,000.

His “job No. 1” was to make sense of the overdrafts and resolve them as quickly as possible.  This required contacting clients to find out their circumstances and work with them while the bank’s operational areas tried to catch up with the backlog of transactions from damaged branches.  At first, “We didn’t know where the stuff was or where the people were,” Galloway recalled.

Six hours on the phone

Galloway’s job No. 2 came in a phone call from Suzette Prechter in Hibernia’s well-regarded credit quality department managed by long-time commercial banker Rob Stuart, a member of the executive team.  The credit quality area watched over loans to determine their health. Prechter said an assessment was under way of the entire loan portfolio – consumer, small business and larger commercial loans.  Management needed a picture of how many of Hibernia’s thousands of loans might have been affected by the storm.

“We met for six hours by phone and went line-by-line through the small business portfolio,” Galloway recalled.  The result surprised him a bit.  Out of $750-million in loans, they identified only $50-million worth that might be affected, those mostly in St. Bernard Parish and the Lakeview and Mid-City sections of New Orleans.

In a few days, Galloway had a chance to drive back to New Orleans and see for himself what things looked like.  “I snuck into my house on the West Bank.”  To his relief, it was less damaged than most.  His wife picked out a few clothes and toys while he dealt with the malodorous refrigerator.  “My neighborhood looked pretty good.  There were some roofs off, but I was so blessed.  I felt guilty.”

Galloway also got around to several branches.  At the Gen. DeGaulle office, he found police camped out in the parking lot, drying out clothes on a fence.  “The building looked okay.  There was no flooding … mostly wind damage and, of course, no electricity.”

Back in Houston, Galloway and his wife found an apartment and got their children settled into school.  Meanwhile, he was frankly amazed the overdraft list did not grow larger.  He worried about a 48-hour period while Hibernia’s computers were completely down. If the computers had not come up quickly, “We could have a run on the bank,” he feared

Innovative efforts

As his team worked their customer lists, a small business owner called from Miami to see if Galloway could somehow pay his 12 employees.  Galloway figured out how to do it with cashier’s checks.  He ended up doing the same for five or six other businesses.

The banker was gratified by the resiliency of his people.  He had eight who lived in badly mauled areas.  All showed up for work.  “People really pulled together.”  He was also surprised by the reception he received in Houston.  “People saw your Louisiana license plate and just did things for you.”  One Houston employee had daughters who put together a “care package” of toys for Galloway’s girls, an act of kindness that brought tears to his eyes.  “There was an outpouring of sympathy and help.”

~ ~ ~ ~ ~

Back to character and capacity.

~ ~ ~ ~ ~

‘Gut lending’

Galloway found the hardest part of his job was handling the higher lending limit he’d been given for the emergency.  “My limit doubled, from $250,000 to $500,000.”  Now he and his bankers had to judge the needs of their clients in an atmosphere of uncertainty on one hand and unprecedented need on the other.  Businesses often needed bridge loans to carry them for a while, to maintain operations until insurance payments came in.

“There was no information.  It had to be ‘gut lending.’  We had no access to current financial records and very little from prior to the storm.  Our old paradigm was gone.  We had to do what we thought was right.  We were back to character and capacity as the main determinants for a loan.

Lots of worries

When insurance checks started to arrive another issue reared up.  Many payments were on homes and other property used to secure loans.  In these cases, checks were made out both to the owner and the lender.  This irked customers who thought they should get the entire proceeds.  A concern was that this might lead to bank fraud, if desperate customers tried to forge the lender’s name.

The business bankers found they had to counsel clients about the future.  Some simply would not survive in the post-disaster economy while others might thrive.  The bankers tried to help owners figure out what was best for them – rebuild, close, sell, downsize, restructure.  Galloway recalled a 100-year-old family business whose owner was aging.  He tried to help the man determine whether to move ahead or cash in.  “Some of the conversations were painful.”

A loan payment deferral program Hibernia initiated took some pressure off cash-strapped businesses for three months, but Galloway worried about what would happen when they had to begin paying again in early 2006.  He thought there was the possibility of a “confluence of negative factors.”  As it turned out, while delinquencies rose some, most customers got back to paying their notes.

He dealt with the anxiety of the period with “some gallows humor, some tears, some screaming, some thrown stuff,” he chuckled.  He worried about the health of his bankers dealing with post-disaster stress.  He could not definitely attribute it to the storms, but he had one employee hospitalized with a kidney infection and another suffering from an ulcer and anemia.

~ ~ ~ ~ ~

 The business does not allow you to be comatose.

~ ~ ~ ~ ~

Unexpected surprises

Unexpected issues came up — a backlog in the loan documents department that was struggling in Shreveport under the weight of a thin staff, soaring demand and slow systems.  Another was the safe deposit box problem, which also affected small businesses.  Galloway’s boss, Tusa, thought it was the most devastating event for customers.  However, other problems were almost as stubborn.  “We had to deal with a stack of insurmountable sh___,” Tusa concluded.  “In retail, we had no chance to languish.  The business does not allow you to be comatose.”  As branches dug into the issues, he felt they were “having difficulty getting at peoples’ real needs,” but were taking care of the obvious – cash, new checks and debit cards, address changes.  And he felt good about the “latitude to do things.”

Personally, Tusa thought the experience “made me a better person than I was in August.  It forced me to be patient, more tolerant, because I couldn’t make anything happen.”

A teller’s story

The staffing problem Tusa and his managers faced could be understood by following the odyssey of one teller.  Nekitha Russell, 28, worked at the Gretna branch.  She and her husband, Carnel Smith, had two children, 9 and 1, and evacuated to LaPorte, TX with an extended family filling four cars.  After a few days at a motel, they were taken in by a local church.  They were scared and confused when they heard the city might be closed for 4-8 weeks.

“The thought of staying in a shelter … I was, like, that’s not happening” … but “The people were so outgoing, willing to help and the whole church community just gave their all,” she remembered.  One lady gave her $500 for clothes, a gesture that made her cry when telling it months later.  Russell stayed until late September with about 30 other family groups from New Orleans, and they were able to do something to repay the many kindnesses.  “All the ladies from New Orleans got together and did a meal a day for a week (for church members), and I tell you, they loved the New Orleans food.  We had gumbo one day, stewed chicken another day.  We had butter beans … smothered pork chops, and I mean it was like people were coming from everywhere.”

~ ~ ~ ~ ~

It’s becoming easier, but it’s not easy.

~ ~ ~ ~ ~

Once back, she went right to work.  “My house was flooded and I wasn’t able to live in it, but my mom’s wasn’t as flooded as mine and she has a two-story … We had some ice chests (and) made a few groceries before we came down … and we stayed upstairs.”

The office  “… took on a little water, but … we didn’t complain because it was good to be home.  We did suffer a little mold damage and we were uncomfortable because it was hot and we only had fans.  We didn’t have any phone lines.  We had to use our cellphones.”

Eventually Russell cut back to part-time so she could oversee the rebuilding of her home.  “I can’t let my house go; I can’t let my kids go.”  She went through three contractors just on the walls.  “At first, I couldn’t understand how people were saying, ‘Oh, somebody killed themselves because they couldn’t take it’.  I am, like, ‘Why are they killing themselves because of the storm?  But once I realized how much stress and what you had to deal with, (I understood) why …”

Russell and her husband got a FEMA trailer, but didn’t like it.  “We sleep in the house …”  Her children would say “Momma, so-and-so’s house is way worse than our house … They have green stuff all the way up here.”  Still, Russell was living out of plastic bags.

“It’s aggravating and frustrating.  I am dealing with it day-by-day … It’s becoming easier, but it’s not easy.”

 

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