This article was originally posted at Realized Worth and written by Heidi Massey.
OK, I’ll admit it. I’m more of a socialist than a capitalist. However, recently I learned of a story about the actions of a bank (yes, a bank!) in the Gulf Coast following Katrina, and I began to wonder if perhaps businesses really could be doing things differently and still be profitable.
The Crazy Things Hancock Bank Did Following Katrina (And How That Led to Unprecedented Growth)
Hancock Bank was hit hard by Katrina. Approximately 90 of the bank’s 103 branches along the Gulf Coast near New Orleans and along the Mississippi River suffered some damage. Electricity and phones were out in the area for weeks. And many of the bank’s branches lost connections to the main data center. People had no access to their money, but were desperate for cash for simple things like ice and gasoline. What happened next was quite extraordinary.
Laundering Cash for Good
The day after the storm, Hancock Bank set up banking stations with whatever was available. Sometimes it was just card tables and chairs. And they went about getting cash into the hands of the people. They kept the cash flow going by using money from ATM’s, vaults, and night deposits. Hancock employees were literally “laundering” the money, putting it in a washing machine to clean it from the sewage that had flooded the area. Bank employees, many of whom were also affected by Katrina, worked extended hours to accommodate everyone. Busloads of employees made 250 mile round trips daily in order to keep the bank running.
Risk and Reward
All of this was quite admirable, but not completely shocking for a bank or any business during a crisis. However, Hancock Bank went far beyond what the community might have expected. They loaned out millions of dollars during the days immediately after Katrina. Without electricity or other modern technology, they went old school, tracking these loans with post it notes. And they didn’t just give the money to bank customers. They gave out cash to anyone who needed it, and trusted that it would be paid back. This included $3.5 million to people who were not even customers. It was a gamble, but they were proven right. All but $300,000 of those millions of dollars in loans were paid back.
In the words of George Schloegel, Bank Chairman at the time, “Basically, people are honest and want to do the right thing and they’ll stand by you if you do the right thing by them.” And the best part of the story is that people did stand by Hancock Bank. Not only did they repay the millions in loans that Hancock so trustingly handed out. In the four months following Katrina, Hancock grew by $1.6 billion, more than they had grown in their previous 95 years because thousands and thousands of new customers opened up accounts with the bank. And George Schoegel was rewarded for his trust by being elected Mayor of Gulfport, Mississippi in 2009 with nearly 90% of the vote.
Is Hancock Bank the Only One?
Clearly, businesses can experience not only profits, but substantial growth, by being good corporate citizens. Perhaps Hancock Bank is showing us the way and others, particularly those in the banking industry, will take notice and start moving down that same path.
What are some of the businesses you know of that stand out for their willingness to take risks in the name of being good corporate citizens?
Heidi Massey is part of the team at Realized Worth as the Nonprofit and Digital Media Specialist, and the Outreach Manager for Sparked. She is passionate about nonprofit organizations and helping them leverage technology to further their missions.