Banking

Blackouts, deep freeze force Texas banks to shutter branches

Faced with severe winter weather and rolling power outages expected to last through the week, banks across Texas have been forced to close branches or run them at reduced capacity or on power generators to help ease the strain on the state’s overwhelmed power grid.

Frost Bank in San Antonio closed most of its 155 branches statewide on Wednesday, except for seven locations in the Corpus Christi and Rio Grande regions. The $42.4 billion-asset unit of Cullen/Frost Bankers also chose to run its operations and technology centers on generator power to help ease pressure on the state’s grid.

“The good news about all those locations being closed is that it removes some demand for electricity from the grid,” spokesman Bill Day said. “We have also taken our big operations center and technology center in San Antonio off the grid and are running them on generators.”

Pump jacks operate in the snow in the Permian Basin in Midland, Texas. The arctic freeze has forced the state’s utility operator to implement rolling blackouts to prevent the electric grid from being overwhelmed.

Bloomberg

While much of the country has dealt with icy winter weather this week, Texas has also had the added challenge of rolling power outages. Freezing temperatures locked up many of the state’s power plants while a surge in demand for electricity stressed the state’s power supply. The Electric Reliability Council of Texas, which runs the grid, implemented rolling power outages to save the grid from becoming overwhelmed.

While some banks were able to run branches on generator power, many opted to close branches entirely rather than ask employees to risk the icy roads.

“They really have no choice but to just close down branches and open up where they’re able to support business,” said Christopher Williston, President and CEO of the Independent Bankers Association of Texas. “Almost every area that isn’t affected by extended blackouts is at least subject to some rolling blackouts, so they’re getting power for an hour at a time, but it’s really unpredictable.”

On Tuesday the Office of the Comptroller of the Currency issued a proclamation allowing banks under its supervision to close “at their discretion.” The agency also said, “Those offices should make every effort to reopen as quickly as possible to address the banking needs of their customers.”

In some cases, banks kept branches open on generator power. Mikel Williamson, the president of Happy State Bank and Trust in Amarillo, said it was important to stay open where possible, especially for small business customers who need cash because they may be unable to process transactions electronically when the power is down.

“A lot of our customer needs right now are small business owners coming in for change and making their deposits,” he said. “Our customers and the residents of Texas, they just want to get on with business and keep going with their daily lives.”

He added that municipal services in the Texas Panhandle were better equipped to deal with snow and ice than many other parts of the state and that the bank opened later than normal to give its employees more time to travel safely.

Still, the $5.4 billion-asset Happy State Bank and Trust in Amarillo did close three of its 60 locations, in Austin, Abilene and Kerrville, largely due to icy roads in those areas, Williamson said.

The $147 billion-asset Regions Financial in Birmingham, Ala., closed most of its 99 branches across Texas on Tuesday and Wednesday, largely because the winter weather made travel too risky, a spokesman said.

“Our business bankers in Texas have also made the most of technology to stay connected with clients virtually while delivering the same levels of service we provide when the weather is sunny and warm,” he added in an email to American Banker.

The $88 billion-asset Comerica closed all of its 123 Texas locations, citing both the winter weather and continued power outages. A spokeswoman said the company also worked with its landlord to turn off the sign and exterior lights on its corporate headquarters in Dallas.

Texas bankers encouraged their customers to use remote banking channels whenever possible. Many said that their customers had become more comfortable with online and mobile banking during the pandemic.

Meanwhile, many bank employees are working remotely, though the ongoing power outages have left many with spotty internet coverage at best.

“We do believe that our move to remote work because of COVID-19 has helped us deal with normal weather issues that limit or relate to travel,” a Comerica spokeswoman said in an email. “However, power outages across the grid make this an unusual situation and impact the remote population as well.



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