Peter Gwaltney, CEO of the N.C. Bankers Association, led Louisiana’s bankers’ group during the Hurricane Katrina disaster in August 2005. He shared these comments in response to a question about the challenges facing communities affected by Hurricane Helene.
The devastation in many Western NC communities is terrible and the enormity of the impact the storm and subsequent flooding has had on people, businesses, and the infrastructure in the region make it difficult to comprehend a future state and how to get there. In this context, I understand how it could be hard to understand how the circumstances won’t have a detrimental effect on the banks in the area.
I’m confident that state and federal governments, along with the private sector, will develop a smart path forward, and that the banks in Western NC will be at the center of the rebuilding process and will emerge on the other side of this experience stronger than before the storm. I’ll explain why I believe this from my unique perspective. 
I was CEO of the Louisiana Bankers Association in August 2005 when Hurricane Katrina hit New Orleans and the surrounding area. The entire city was like a bowl filled with sea water from the tidal surge and breeched levees. The city was closed, placed under martial law, and was depopulated for months.
Infrastructure such as roads, bridges, the causeway over Lake Pontchartrain, and rail service was destroyed. High winds and sustained flooding took out cellular towers and most telephone poles and power lines. The salt water and a major oil spill in the city killed vegetation and ruined everything it touched.
More than 200,000 housing units were damaged or destroyed (my best recollection), and most houses and businesses had to be completely gutted and renovated. Just about every car and boat left in the Greater New Orleans area for the storm was flooded or lost. The devastation was greater than most could comprehend, and it was difficult to understand how the city would come back and how long it could take.
I gave leaders of the federal banking regulatory agencies tours of the city shortly after the floodwaters receded, escorted by state troopers. The assessment of one experienced regulator was that he couldn’t imagine how we would not have widespread bank failures.
The road to recovery in New Orleans was long and hard. The state and the federal government argued over just about every aspect of the recovery, including the massive undertaking of rebuilding the infrastructure of a very old city situated below sea level; repairing levees in a way that would avoid a repeat of Katrina; financial incentives to encourage homeowners to return and rebuild; financial incentives for investors to purchase properties from those who did not want to return and rebuild; repairing and reopening schools; resuming mail service, and on and on.
There were approximately 30 banks in New Orleans at the time that were flooded, and senior leaders and team members were scattered across the Southeast One community bank CEO told me that his staff had fled the storm to 13 different states. For some banks, every location was flooded, everything was ruined, and most customers were gone. It was a terrible situation
When I left Louisiana at the end of 2006, every bank in the Greater New Orleans area was profitable. The only change in the banking landscape was a merger between two small community banks. The recovery was well underway, and the city was back to hosting conventions and even a Super Bowl.
The situation in New Orleans after Katrina was eerily similar to the devastation left by Helene. The bankers in New Orleans did exactly what the bankers are doing in Western NC today. They didn’t waste a minute getting to work to assess the damage from the storm. They contacted their people as best they could and didn’t stop until everyone was accounted for and safe.
They scurried to reopen as quickly as they could, many with no power or communication, because they knew their customers needed them to be there to provide cash and basic banking services. They’ve used generators and Starlink kits to reconnect to their information systems, and I’ve watched them celebrate when power is restored and internet fiber is reconnected.
Very few bank branches in the region are closed on a normal workday now, and only due to physical damage that prevents them from opening. Now that they’re open for business and the demand for cash has subsided, bankers are turning their attention to the larger impact the storm on homeowners and business owners. It will be a difficult road ahead for everyone in the region, and it will be harder for some more than others.
Just as bankers did after Katrina, bankers will have the latitude from bank regulators to make smart decisions about payment deferrals and loan modifications. We have to wait until the state and the federal government can adequately assess the situation and develop a comprehensive recovery plan before we can truly know the path forward. It took quite a while in Louisiana before we knew how much money Congress would appropriate for the recovery and how the funds would be allocated. We’re in a similar situation with Western NC, and I’m confident that we’ll develop a smart plan for putting the region back together.
In summary, I think it’s a little early to begin making policy recommendations on climate risk or estimating losses or negative impacts on the banks in Western NC from Helene. Let’s wait until we know more. It could be a while, and that’s okay.
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