After a devastating twister blitzed a small Nebraska town and its only bank branch, recovery took coordination, cooperation, and, at times, confrontation

 

May 22, 2004, around 8:30 PM.
It was a crowded Saturday night at The Hitching Post, a popular restaurant in Hallam, Neb. It had been raining hard, the power was out in many spots in the county due to storms, and native Nebraskans know that such weather can presage tornadoes, one of the banes of the Midwest.

What the 80 or so diners and staff in the restaurant were not aware of was that tornado warning sirens were not working.

And so, when some latter-day Paul Reveres began banging on doors in town to warn that a tornado was approaching, there were only minutes to find a safe place underground.

Then someone realized that The Hitching Post lacked the one thing you really need in a tornado: a basement.
No time to go home. No hope of outrunning the danger in cars.

And then someone had a solution.

The Hallam branch of Saline State Bank across the street had a basement, indeed, one big enough to hold the dining crowd.

But the bank was closed.

Desperate men do desperate things, the saying goes. The bank branch had glass doors, and someone realized that a battering ram would open the path to safety.

But where to find one? That was easy. The carbon dioxide tank for the restaurant’s soda dispenser was disconnected, and put into service. Torpedo-like, it smashed through the bank’s portal, and the crowd reached shelter in time.

The town’s Main Street was decimated, and the bank building itself was nearly a total loss. (Or so the bank’s management believed, but that’s part of the ensuing story.)

Indeed, Main Street was only one of the areas damaged in the community of 400, in southeastern Nebraska about 40 miles south of Lincoln. The Hallam Farmers Cooperative grain elevator, for instance, was destroyed. A train of hopper cars was knocked off the tracks of the BNSF Railway just west of town, some of the steel “trucks” actually separated from their cars. Homes were ripped off their foundations.

A banker ducks, covers, and digs out
Ten miles away, Harley Bergmeyer, chairman and CEO of the bank, had bigger worries on his hands than some citizens saving themselves at the expense of a front door. He didn’t mind that at all when he heard about it later. His concerns were closer to home at the moment. His 6- and 7-year-old grandchildren were visiting, and his wife was away. The electricity had gone out, as thunder, lightning, and pouring rain battered his home.

Then Bergmeyer heard a telltale sound.

“If you’ve ever stood right next to a freight train, and heard the roaring it makes, then you can imagine a tornado approaching,” Bergmeyer explains.

Bergmeyer yelled to the children to get to the basement, while he grabbed up some necessities, and then joined them. The tornado was growing closer.

“It felt like the house was a rocket, and that it was going to take off from the ground.”

In all, 18 tornadoes hit this part of Nebraska that night. The one that hit Hallam was two-and-a-half miles wide. Bergmeyer was fortunate, in that his home was not significantly affected. A neighbor, only a quarter-mile away, had his house leveled.

Many people had horrible damage, or lost just about everything, and there was one known fatality. The Bergmeyer family farm of about 640 acres—where Harley was born and raised—was significantly damaged.

“We’re not pulling out”

Saline State Bank, $98 million-assets, is based in Wilber about 18 miles from Hallam. The tornado clipped the area just south of the town, but the greatest impact was in Hallam. Not only was the bank’s branch significantly damaged—the roof caved in, among other things—but the branch president’s home was completely destroyed.

“Hallam was a total war zone,” says Bergmeyer.

But Bergmeyer was determined that the bank, a presence in Hallam since 1898, was not going to pull out of the town. With the approval of the bank’s board, the decision was made early on that the bank would honor all checks from customers and noncustomers alike, so folks who urgently needed cash could get it.

“I felt that as a community bank we needed to do that,” says Bergmeyer, and, to show that the bank’s efforts were reciprocated, he says, Saline State didn’t lose a dime because of this decision.

Bergmeyer assumed the post of key public spokesman for the bank. This was essential to maintain a consistent message to the public and the media. Meanwhile, board member Andrew C. “Skip” Hove, former FDIC Vice-Chairman and veteran Nebraska banker himself, agreed to be the bank’s liaison to its regulators.

The Nebraska Bankers Association staff helped get a press release written and distributed to appropriate parties, so the bank could let folks know that the bank wasn’t pulling out.

“Despite the destruction, customers of the Saline State Bank can feel reassured that their dollars and all financial records remain intact,” Bergmeyer said in a statement issued the first business day after the disaster.

Signs were also posted on and near the battered branch. Hallam customers were told where they could obtain service from other Saline State branches.

“Operation Box Lift”
The only apparently sound element of the bank, post tornado, was the vault. While the town was under the protection of civil authorities right after the disaster, management knew that the cash and the safety deposit boxes couldn’t stay there. For two days, a private security firm hired by the bank maintained a 24-hour guard on the bank.

Getting the boxes and cash secure meant moving them to the bank’s branch in Dorchester. The bank called in professionals from Lincoln, who transported the heavy boxes to that location.

That was just one part of the challenge. The other was the matter of the traditional dual key system. The bank found that many customers’ keys had disappeared in the damage to homes and businesses. Thus, most boxes wound up having to be drilled by locksmiths so the customers could gain access to their contents. The bank absorbed these costs.

“You can’t know how happy people were to know that the items in these boxes were safe,” says Bergmeyer. For many, family photos and similar items in the boxes were the only such personal effects they had left.

Nebraskans bearing aid
Meanwhile, staff members of the Nebraska Bankers Association, which is headquartered in Lincoln, came to help the bank, moving files and other bank materials that hadn’t been destroyed to alternate locations.

Initially, the Hallam loan files and similar documentation was put in the board room of the bank’s Wilber headquarters. A horse trailer was drafted into service for the move.

However, soon after the disaster Bergmeyer received a call from a fellow CEO, Matthew H. Williams, chairman and president of The Gothenburg (Neb.,) State Bank & Trust Co., the first of many bankers offering aid.

“Harley, what do you need?” was all Williams asked. He said he could dispatch a van of tellers if it would help.
“A bank,” Bergmeyer told him wishfully, and Williams stunned him by saying he could help with that.

“I can have a bank building there in 72 hours,” said Williams, who explained that he had a Texas supplier (MPA Systems, Inc., Sanger) under contract.

Sure enough, within that time frame Saline State had a modular bank building, including security and necessary connections, set up in the parking lot of one of its other facilities, in Cortland, the nearest location. It wasn’t practical to set it up in Hallam. 

Battling over coverage
One of the surprises, along the way, was the attitude of the bank’s insurance company. Area damage was so severe and so widespread that carriers had to bring out-of-territory adjusters in to bolster the local teams. While locals were often pretty decent about their findings, Bergmeyer says, the bank found its adjuster to be—plain and simple—a hardnose.

Bergmeyer was on the back of a “Cat,” helping his brother dig things out on the family farm, when Tom Damkroger, president of the bank’s holding company, called him from the bank’s branch. He told Bergmeyer that he had some bad news.

Bergmeyer told him to go ahead.

The adjuster, said Damkroger, had just told him the following: “You have to have a team of people come out here to pull up all of these carpets. Otherwise, we’re going to have a problem with mold in this building.”

It took a moment to register on Bergmeyer what this meant. Then it dawned on him: They want to try to avoid declaring a total loss on the building. They think this mess can be salvaged.

This was so far from what he had expected that Bergmeyer momentarily thought his president was joking, and told him to stop kidding around. Damkroger settled that quickly, by adding that the adjuster did not consider the damage so severe that a total loss needed to be declared.

It was the beginning of a long road.“They fought us on everything,” says Bergmeyer. In the end, the bank had to ask its law firm to step in. The firm handled the day-to-day head-butting with the insurance company, giving management regular updates.

Eventually, after much legal wrangling, the bank got all the coverage it felt it was entitled to, settling in December 2005. The legal expenses, however, took away from the recovery. Bergmeyer says he’s glad at least that the bank opted to maintain replacement coverage. That provision helped reduce spending.

Lessons learned
Bergmeyer was generally pleased with the bank’s business continuity plan. In considering it in hindsight, he makes the following suggestions:

1. Be as specific as you can be. Overall, Bergmeyer recommends detailing things in your plan, not being general. And, wherever possible, plan for redundancy in services so there is a backup if the bank’s preferred provider is unavailable.

2. Plan for cell phone redundancy. Bergmeyer has two cell phones, each tied to a different service, and he says it is essential for key players on the bank’s recovery team to have a pair of phones. It was common for service to be available on one system in a given area, and yet not on another system.

3. Remember safe deposit boxes. As the bank’s experience shows, this is a critical factor for folks who have lost everything else. The boxes need to be protected, and there should be plans in place for moving them, if necessary.

4. Secure everything that is confidential or personal. “Anything that was not in our vault or in our large fireproof filing cabinets was gone,” says Bergmeyer. “The tornado just sucked things right out of the building.” (Bergmeyer says that some area residents learned that photos that had been vacuumed out of their homes by the tornado had been found by people in other towns—in Iowa. Receipt books from the grain elevator were found as far away as Minnesota.)

5. Don’t forget your state bankers association, and fellow bankers. Bergmeyer says he can’t say enough about the indispensable aid he received from the staff of the Nebraska Bankers Association and banker friends from unaffected areas. There were many decisions to make, and being able to delegate some things to volunteer helpers was a godsend.

A mostly happy ending
After all the heartache for customers and for bank families, Hallam is coming back.

“There was nothing left,” says Bergmeyer. “No water tower, no fire house.” But things are returning to something like normal. Bergmeyer says 100% of the businesses have returned, in some fashion, including the grain elevator. As for the bank’s branch, portions of the walls were salvaged, but it was substantially a matter of rebuilding. It reopened on Dec. 25, 2005, 19 months after the storm.

Here and there, little touches restored some humanity to Hallam. Bergmeyer calls himself “a tree guy,” put in three evergreens, one each of three varieties, from his own tree farm, to put a down payment on re-beautifying Main Street.

 

The bank and area officials are working with the Arbor Day Foundation in an effort to get more trees back into town.

Some sticky points remain. Bergmeyer says the Federal Emergency Management Agency distinguished itself in the Hallam disaster, but he and area residents are frustrated with a quasi-federal agency: the U.S. Postal Service.

Before the tornado, there was a post office right in town. It was destroyed, and, thus far, unlike the bank and Hallam’s business community, the service has rejected requests to come back to town. BJ