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Business Observer Friday, Sep. 18, 2020 2 months ago

As pandemic drags communities down, banks step up

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Banks and credit unions, in a bid to shore up the struggling economy, dig deep to support struggling residents — and gain new clients in the process.
by: Brian Hartz Tampa Bay Editor

The coronavirus pandemic, now in its sixth month, has been a crisis of enormous proportions for nearly every sector of the economy. Early on, First Citrus Bank CEO Jack Barrett says banks acted as the economy’s “first responders,” facilitating aid by processing Paycheck Protection Program loans that helped businesses stay afloat and continue to pay workers. 

But now, as the downturn wears on, and aid programs have begun to dry up, some area banks are turning to their own resources, donating hundreds of thousands of dollars to organizations that provide food and shelter to people whose lives have been turned upside down by the virus. 

“I’ve never seen anything like this,” says Tim Coop, Hancock Whitney Bank’s Tampa Bay regional president. “I've been through a couple of recessions before this, but I’ve never seen anything completely shut down the economy to the point where banks really were the lifeline.”

‘An eviction complaint can stay on your record for a long time and affect your ability to buy a house. So it's also about helping people maintain good credit histories, so that they can become good clients of the bank down the road.’ Tim Coop, Hancock Whitney Bank

As of July 30, 53 million Americans had filed for unemployment benefits, and although Florida is not among the states with the highest jobless rates, the state's tourism-driven economy won’t be quick to recover. The big challenge for banks and credit unions that want to help? Deciding where the money should go and how much per cause or organization. 

For Coop — and likely many other bankers — the closest comparison to this crisis is the financial and housing market collapse of the late 2000s. Back then, however, banks weren’t as quick to help out. Foreclosures were rampant, with entire subdivisions sitting vacant. This time around, Coop says, banks like Hancock Whitney felt a duty to step up. 

“The financial collapse that led to the Great Recession, it wasn’t as all-encompassing,” Coop says. "[The COVID-19 crisis] wasn’t driven by economic mismanagement. It was driven by a mandatory shutdown of the system. And so we understood that the stakes were so much higher and that the impact could be so much more severe if we didn't do our part. We've got a long history of understanding that when your community is severely impacted by disaster, it can have huge consequences for your organization.”

To date, Hancock Whitney has donated $250,000 to Tampa Bay area nonprofits that are helping to feed and house residents who’ve been negatively affected by the pandemic. Other financial institutions in the region that have supported myriad causes during the crisis include Suncoast Credit Union, which donated $1 million to provide relief to Tampa area residents, first responders, health care workers, small business owners and education providers, in addition to contributing 500,000 meals to the Feeding Tampa Bay food bank and Bank of America, which pledged at least $100 million in pandemic-focused aid in all the communities it serves.  

FOLLOW THE NEED

Coop, a 31-year veteran of the Tampa Bay banking sector, says much thought went into deciding what causes to support, but it was easy to zero in on the problems he and his team wanted to tackle. “I had a pretty good feel for which organizations I had on my short list, certainly,” he says. 

A pair of those stood out as having the greatest potential to help the most vulnerable people: Bay Area Legal Services and Metropolitan Ministries. 

Courtesy. Tim Coop, Hancock Whitney Bank’s Tampa Bay regional president.

Hancock Whitney donated $50,000 to each organization. Bay Area Legal Services provides legal assistance and advice to people who face eviction, as well as payments to landlords for tenants who are behind in their rent. Metropolitan Ministries, meanwhile, is using the bank’s donation to provide $500 rent assistance payment to 100 families in Hillsborough, Pinellas, Pasco and Polk counties. The payments are made directly to landlords on renters’ behalf, allowing them to stay in their homes. 

For a bank like Hancock Whitney that boasts $32 billion in total assets, $50,000 might not seem like a huge amount of money, but when put to use in the right way, it can have an enormous impact on a person’s life and even lead to new business for the bank.

“An eviction complaint can stay on your record for a long time,” Coop says, “and affect your ability to buy a house. So it's also about helping people maintain good credit histories, so that they can become good clients of the bank down the road.” 

Food insecurity was the other major need Hancock Whitney wanted to address, and it allocated $110,000 to that cause, divided among the St. Petersburg Free Clinic, Meals on Wheels Plus of Manatee County, All Faiths Food Bank of Sarasota and kidsPack of Lakeland, as well as an additional donation to Metropolitan Ministries earmarked for its food bank. 

Coop says the bank was already facing a difficult second quarter, earnings-wise, so it decided to go “above and beyond” its normal charitable giving and share in the pain its customers were feeling. “We looked at the communities we were doing business in and felt like it was time that we needed to step forward and make a commitment,” he says. “We felt like it was the right thing to do.”

CLASS ACT

Although Hancock Whitney Bank tackled big picture, macro-level problems facing a wide swath of the community, Dunedin-based Achieva Credit Union, with some $1.5 billion in assets, took a highly targeted approach to its charitable giving, setting up a loan program for a group that’s close to its heart: teachers. 

Courtesy. Chelsey Wilson is Achieva Credit Union's director of marketing and events.

Achieva, founded in 1937 by a group of Pinellas County teachers, now has 160,000 members and 26 branches in 15 Florida counties. With the pandemic squeezing the education system and putting many teachers and school employees temporarily out of work, the credit union’s leadership created a bridge loan program designed to help cover missed paychecks. “Being so tightly tied to the education community,” Achieva Chief Marketing Officer David Oak says, “we are able to quickly collaborate and provide support when needed."

The average loan amount was around $1,500, says Chelsey Wilson, Achieva’s marketing and events manager.

“We made it very easy to qualify, with a low, locked interest rate,” Wilson says. “We worked with the school administrations to conduct employment verification and set up automatic deduction from recipients’ payroll for repayment over the next 12 months. We very quickly put together this program and had a huge response as soon as we launched it.” 

Courtesy. Achieva Credit Union Chief Marketing Officer David Oak.

Achieva also took money earmarked for philanthropic events, such as its annual Box Car Rally — no longer possible because of the pandemic — and reallocated it to other causes. Wilson says the credit union ran a food bank fundraiser and then matched the total raised, with the end result being $275,000 given to six food banks across the Tampa Bay region.

The donation, she adds, was “earmarked specifically for those families in our communities that were experiencing food insecurity as a result of COVID-19. It’s something that the community really got on board with. And our staff was proud to have the opportunity to give back.” 

Achieva’s bridge loan program also had a practical benefit in that it added many new customers. “Through the process of taking the loan, they become a member," Wilson says. "So now they get to experience all the good things that Achieva has to offer, moving forward.”

(This story has been updated to note that Hancock Whitney Bank's total assets are $32 billion and Tim Coop's title is Tampa Bay regional president.) 

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