After Hurricane Katrina leveled much of the Gulf Coast, bankers in the hardest-hit areas cited the inability to communicate with key employees as one of the biggest obstacles to getting banks up and running again.
Now, with an equally powerful hurricane bearing down on the Texas coast, bankers there are not taking any chances. They are equipping managers with satellite phones or two-way radios, so they can quickly spring into action once the storm passes. Banks are also working with trade groups to develop a hot line that will help them track down employees, and they have updated and forwarded emergency contact lists to their regulators.
"I think Katrina has put everyone here on high alert and high anxiety," said Paul Murphy, the chief executive officer of Amegy Bancorp Inc. in Houston.
Texas banks are also making sure they have plenty of cash on hand - though it is still not always enough. It has been nearly a month since Katrina slammed into Louisiana, Mississippi, and Alabama, and electronic commerce is still spotty at best, because many parts of those states are still without power.
Concerns about communications and cash were evident Thursday during a conference call hosted by the Texas Bankers Association and the Independent Bankers Association of Texas. State and federal regulators were also on the call, along with more than 300 bankers, including many from Louisiana and Mississippi who offered their own words of advice.
Chris Williston, the chief executive officer of the Independent Bankers Association of Texas, said the main topic of conversation was how banks can prepare for the aftermath of Hurricane Rita.
"I think everyone has learned a lot from Katrina," he said. "And bankers were sharing things they wished they would have done ahead of time."
Follow-up conference calls are scheduled for today and Monday.
Because of what he observed after Katrina, Mr. Murphy has enhanced Amegy's long-standing emergency response plan to ensure better communications.
This week the $7.7 billion-asset company got a shipment of satellite phones, so all its managers can stay in touch should cellular towers get knocked out. Executives also wanted to ensure they can communicate with each other through their Blackberries, so Amegy has disabled the security protection that requires messages to be sent through a central network, so the executives can send messages to each other directly.
Fifty-nine of Amegy's 87 branches are in or around Houston or in Galveston County, both of which are directly in Rita's path.
Woodforest Financial Group has also invested in alternative forms of communications. Robert E. Marling, the $1.8 billion-asset company's CEO, said it just purchased 12 two-way radios, so employees who go into the hardest-hit areas after the storm will be able to communicate with each other, as well as with the main office in The Woodlands, 30 miles north of Houston.
The company has been "very proactive" in its preparations, Mr. Marlin said; it has even rounded up a WaveRunner, a small boat, and a large truck it can use to get to branches if roads are damaged or flooded.
Many banks have closed branches between Galveston and Houston, so employees can get out of town. More than 1 million residents have already evacuated the Texas Gulf Coast.
Of course, they did not want to leave with empty wallets; many went to their banks' automated teller machines before fleeing. About one-third of Woodforest's branches and ATMs are in Wal-Mart stores, which were still open Thursday, and a bank spokesman there have been "thousands" of large withdrawals.
Victor Pierson, the CEO of Moody Bancshares Inc. in Galveston, said it had thousands of customers demanding cash, and it managed to meet the increasing need by moving some cash from less frequented branches to those along the evacuation route.
Amegy had so many customers making withdrawals that it temporarily ran out of cash at some of its branches Wednesday - even though it had ordered extra cash in anticipation of demand.
Bankers also want to be able to track down employees. To that end, the two state trade groups, both of which are based in the inland capital of Austin, are teaming up to create a communications clearinghouse.
Frederick Smith, the Texas Bankers Association's president, said the groups are setting up a hot line, to be staffed around the clock, that bank employees in the affected areas can call to check in and let their employers know their whereabouts. The groups have also created a joint Web site where bankers can check the status of certain employees and post messages for their employees or other banks.
Regulators are also worried about staying in touch with the banks they supervise. After Katrina hit, Mississippi and Louisiana regulators did not hear from some state-chartered banks for more than a week.
To prevent that from happening after Rita, the Texas Department of Banking has spent much of last week tracking down a variety of emergency contact numbers "over and above what we have asked for in past storms," according to Deputy Commissioner Gayle Griffin.
"Because we anticipate the areas that take the brunt … [of the damage] to have communication out for a while, we are looking for alternate numbers and alternative ways to communicate," he said.
If Rita continues on her current path, the $1.1 billion-asset Moody could be one of the hardest-hit banking companies. All 31 branches of its two subsidiaries are in and around Galveston or south of Houston.
Its CEO, Mr. Pierson, is also the mayor of Jamaica Beach, a small town south of Galveston. He said Wednesday that communications are already becoming a problem; both cellular and landline networks were being used to capacity, though he said his top managers are equipped with Blackberries and two-way radios.
Mr. Pierson said that he is pleased that Texas banks are quickly applying lessons learned from Katrina. More importantly, he said, Katrina has "motivated the general population to heed the evacuation warnings. People are taking this hurricane very seriously."
