During 1997 flood, Grand Forks bank went above and beyond for customers, employees

By Lisa Gibson

GRAND FORKS — Randy Newman, CEO of Alerus, refers to the events of 1997 as “the flood and fire of Grand Forks. … Grand Forks had the flood, Alerus had the fire,” he says. Alerus, which at the time was First National Bank North Dakota, lost three buildings — 100,000 square feet — to the fire that ravaged 11 downtown structures during the flood.

Customer files were lost, buildings that had flood damage but still stood weren’t even accessible for at least a week, he says. All the bank’s business had been conducted in downtown Grand Forks — accounting, legal and banking. “It had a significant effect on our customer base,” Newman says.

For Customers

As floodwaters entered Grand Forks on April 19, 1997, First National Bank North Dakota was rerouting its main operational systems to Fargo, Newman says. The bank rented out a hotel in Fargo where its employees stayed and maintained operations. “We didn’t really portray the damaged company that we were,” he says. The bank ordered cash from the Federal Reserve and had it delivered to Fargo to ensure it wouldn’t run out.

And the bank’s leadership took extra steps to ensure its customers were taken care of in their time of need. “We were dealing with this disaster,” Newman says. “Ours customers were dealing with this disaster and our community was dealing with this disaster.”

Many of the bank’s customers were kept from their workplaces as the flood closed multiple businesses, but that didn’t mean they had a break in their loan payments, Newman says. “Immediately, everyone got loan extensions.” The bank also increased lines of credit for its customers and offered expert help to any customers who needed to refinance in the midst of the disaster, lowering loan interest rates and prolonging payback periods to lower payments. “It wasn’t a handout, but it was a hand up,” Newman says.

All the measures implemented to ease financial burdens on its customers during the flood lowered the bank’s revenue by 25 percent, he says. “But it was the right thing to do for our customers.”

FNBND also set up a mobile home as a bank and drove it around the area, offering banking services to its customers who had relocated to other communities. “I like to give us credit for inventing mobile banking,” Newman says.

The bank would put ads in weekly papers in the area to let its customers know when it would be in certain towns, says Jon Handy, who was the bank’s marketing director at the time. “Customers’ reactions to that were just absolutely fantastic,” he says.

“I can’t say enough about how our company and leadership went out of its way to take care of customers and employees,” he adds.

For Employees

While FNBND struggled with its problems, its employees were struggling with their own. Homes were damaged and families were displaced. Handy says he was one of the employees who worked from Fargo, and he did so for about a month, while his wife lived in Fosston, Minnesota, so she could get to her job as a public defender in Crookston, Minnesota. The couple had a 1-year-old child at the time, too. “It was really an unusual time,” Handy says.

Handy and his wife were selling a home while building another when the flood hit. Both sustained damage. Luckily, the contractor on the home the Handys were selling did some repair work, as did a family member. For employees without those connections, though, FNBND secured contractors, scheduled appointments and arranged for the repairs to be made. The bank even ensured payment to the contractors until insurance payments came through.

“Your relationship with your employees is so important,” Newman says, adding they were crucial in operations and recovery. “We needed our employees to serve the customers, but they had their own problems to deal with.” With FNBND taking care of the home repairs, the employees didn’t have to worry about them, he says.

Words of Wisdom

Communication is crucial for a business handling a disaster, Newman and Handy agree. “We reacted very quickly,” Newman says. “I can’t stress enough the importance of communication. I look back and I think our marketing and communication people did an outstanding job.”

A disaster recovery plan also is essential, outlining procedures, pinpointing responsibilities and measures to take. Small businesses also should make sure they have business interruption insurance to account for lost revenue, Newman says.

The bank was renamed Alerus in 2000, to reflect the fact that it does business outside of North Dakota. The name comes from the Latin word Alera, which means to give wings or take flight, as the bank did during and after the crisis, Newman says.

“I don’t know if you can ever be fully prepared for what we experienced 20 years ago,” Handy says. “But the company and our company’s leadership took extraordinary measures for its customers and employees.” PB