ASI_Katrina_6-10-06 by wanghonghx

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									Katrina
It is August 26th, 2005
ASI Federal Credit Union
is feeling so good about
its operations!
$200M in assets – a new
high!
9% capital – also a new
high!
250 employees
14 branch locations
Involved in a year
long strategic
planning process
Holding focus groups
Analyzing members’
surveys to improve
products and services
Involved in many civic
and charitable
organizations
The force and dollars
behind an initiative to
bring the Manchester
Craftsman’s Guild
replication to New
Orleans (Bill
Strickland)
Involved with both
Local and State
Governments to make
this happen
Awaiting CDFI
certification
Awaiting IRS
determination on non-
profit
WE WERE GOOD
AND WE WERE
PROUD OF THE
WORK WE WERE
DOING!
And then…….
All weather reports
indicate that we could
be in the path of a
deadly hurricane!
On the afternoon of
August 26th the MT
meets
We begin to
implement our
disaster recovery plan
We make a decision
to keep our system up
as long as it is
practical to do so
We raise our off line
limits for ATM
customers
We get in touch with our disaster recovery site in
California
We will send our employee with back-up tapes
there once we have to close down
We check to make sure we have correct contact
information
We leave expecting to be back in 2 or 3 days to
resume operations
We spend the week-
end in cities and
states far from our
homes watching
weather reports
On Monday, August
29th, it hits!
By that night, we
realize no one is
going back to our
office for a long time.
By August 31st, most of the MT has found each other
We are in Baton Rouge, Louisiana – 80 miles from our
main office
The MT convenes at DOW Federal Credit Union
Our database has been restored at our disaster recovery
site in California
We open our Ville Platte Office in South Central
Louisiana
It is now August 31st and we
are up and running from DOW
Credit Union
ACH transactions including
members’ pay are posting
Checks are clearing
Audio response is working
Our web site is up and
members can access their
balances
Credit and debit cards are
working
 We are meeting our members’
needs, right?
The 100 phone lines that we
had prior to the hurricane are
now reduced to 6
We have 12 people trying to
answer the phones, update the
web site, wire money for 100-
150 members per day, look for
a more permanent location,
bring other branches on line,
work with other credit unions to
serve our members, handle off
line postings, review reports,
etc.
On September 2nd we
get our first indication
that the switch and the
disaster site are not
communicating
Members are calling
looking for the free
money that ASI is
providing - $300 a day!
We realize that they are
referring to our off line
limits!
We are working
frantically to get
communication
established
AND IN COMES NCUA!
Pressure is applied to join the
shared branch network
Although all credit unions that
we have contacted are
cooperating, NCUA wants a
commitment to get shared
branching up and running
NCUA wants us to obtain
additional lines to answer our
members’ calls
And so do we but as you can
imagine the phone companies
are inundated with similar
requests
September 3rd – we
find a larger location
to move our
operations to
We will get additional
phone lines – up to
12- by September 6th
We have reduced off
line limits for ATM
transactions
Switch is slow to
implement change
All this time, members
are overdrawing their
accounts
September 4th – NCUA
Special Actions arrive
I’m summoned to their hotel
to explain how we will
improve service to our
members
Meanwhile we are promised
that the connectivity problem
will be solved over the Labor
Day week-end
The switch will be
authorizing from a live data
base
September 7th – we
are now a part of
Credit Union Shared
Service Centers
We open our branch
in Thibodaux, in
South West Louisiana
We open our
Causeway Branch in
Mandeville Louisiana
September 8th – our
members have
overdrawn their
accounts to the tune
of $3 million dollars
We have hundreds of
off line transactions to
be posted
This will overdraw the
accounts even more
We don’t have the
manpower to get this
done
September 9th – NCUA wants to
know how overdrawn the
accounts are
What are we doing to stop the out
flow of money from accounts that
are negative?
We are continuing to get
assurances that connectivity is
going to happen – SOON!
We are getting branches on line
The service centers are doing off
line transactions – burying us!
September 10th – 2 more offices open – off line
Transactions are being authorized by personnel
at the 4 locations that are on line
Shared branching still not on line
September 11th – worked all day and evening to move
our command headquarters to a new, larger location with
more phone lines and more employees
September 12th – NCUA is at the new location
How many phone lines do you have now?
When will you stop the overdrafts?
We do our best to answer questions that have no
answers.
September 14th – The
shared service centers
are live! No more off line
transactions!
All open branches are on
line – able to authorize
withdrawals!
Employees have been
coming back to branch
offices!
We have almost stopped
the flow of shares from
overdrawn accounts –
except for the ATM
transactions.
September 19th – we
are back home!
We are now switching
our own ATM
transactions!
It has been 24 days
since an ATM
transaction was done
against a live file.
We have finally
completely stopped
the ability to overdraw
What’s left is to
assess the damage
and work on recovery
What has happened
since returning home?
Assets grew $110M –
from $200M to $310M
as members deposited
FEMA checks and
Insurance checks
Overdrawn accounts
which reached over $6
million are now at $2.8
million
Loan charge offs
reached nearly $2
million
4 branches are
destroyed
1 branch is damaged
50 employees are not
coming back
Our bank statement
contains so many
transactions that our
treasurer, responsible
for balancing, retires
We begin to look for ways to trim our
operations
Things that we thought necessary before
Katrina are now luxuries
We implement cost cuts –no year end
bonus – raises for some key personnel
eliminated – some take pay cuts
We look for ways to build capital quickly
We sell one branch
We look for secondary capital
We write grants
We explore selling our Visa portfolio
We look for and receive help from the
Credit Union community
We hire additional collectors
Our capital, though growing again, is below 6%!
Red flags go up in the financial arena and
companies that we have done business with for
many years are questioning our viability.
Visa is requiring a compensating balance
account of $3.5M although we have been a
member in good standing for over 25 years
Corporates are reviewing our line of credit
agreements
NCUA is requiring that we fund the NCUSIF an
additional $1 million to cover the shares that
both they and we know are temporary
Good News?
Our friends have
come to our aid!
Cliff is getting our
story out to the
financial world.
He’s opening doors
for us in Washington
so that we can plead
our case.
With his help, people
begin to listen.
Our work is paying off too and our capital is
growing.
On July 31st 2005, the last month end before
the hurricane this was our capital ratio:
Capital Ratio = 8.75%
On December 31, 2005 our capital ratio was:
Capital Ratio= 4.58%
Now, 5 months later, May 31, 2006
Capital Ratio= 5.25%
WE ‘re coming on strong!
We are now certified as a CDFI!
Our Non-Profit is recognized by IRS!
We are determined to be part of the
rebuilding!
We look for property to purchase and
rebuild.
We look for community partners.
We renew contact with Bill Strickland and
his project.
This is our city!
These are our people!
WE WILL MAKE A
DIFFERENCE!
¡SÍ SE PUEDE!

								
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