Kentucky Tornadoes: Farm Banks Provide More Than Financial Resources

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ohn December 10-11, 2021, a violent line of tornadoes moved through several states, including Kentucky, Tennessee, Arkansas, Illinois and part of Missouri, leaving a 250 mile path of devastation in their wake. The storms destroyed homes and businesses, killing more than 75 people. Western Kentucky suffered the brunt of the damage. Too often, rural and farming communities are disproportionately affected by natural disasters like the Kentucky tornadoes this month. And while the response to such disasters is national in scope, they also prove the resilience of communities – individuals and local businesses, such as community banks – who are stepping up to help their friends, family and neighbors thrive. get back on track.

ABA recently spoke with Josh Bailey, vice president of agriculture and commercial loans at the First Community Bank of the Heartland in Fancy Farm, Ky., Just west of Mayfield, which was heavily damaged by the storm.

ABA: How can banks provide specialized services to agricultural and rural clients, who are so often disproportionately affected by natural disasters?

Bailey: I am not sure that the services offered by rural community banks in general can be considered specialized. We offer the same types of products and services as urban banks and large national banks. However, I admit that the focus of our activities on agriculture and rural economies is more of a specialization. On the contrary, it looks like we could specialize more in the human element of the banking model. We pride ourselves on knowing our client. We know where they live; we know where they go to church; we know their children and their hobbies. We strive to create a personal relationship and not just a business relationship. I believe these efforts pay dividends both to the bank and to the communities we serve in the event of a disaster.

ABA: How can banks prepare in advance for disaster response needs in their communities?

Bailey: The most important piece of this puzzle for banks is developing and testing their disaster recovery plans to ensure that even in the event of a total loss, we can continue to serve. As a vital service, we have found that the Federal Emergency Management Agency and other government departments in our communities have been more than willing to help with the development, review and update. testing plans and providing information and access during and immediately after the event to ensure we can be operational. Additionally, establishing multiple lines of communication with employees and our community as a whole has been invaluable. Whether it’s a ‘one-call’ arrangement or a group messaging app with employees on social media with the community, keeping everyone in the know has proven to be beneficial. .

ABA: What types of services do agricultural customers most often seek from banks after an unexpected event such as a tornado, hurricane, or other natural disaster?

Bailey: Over the past decade, our region has suffered at least two devastating national disasters, both of which have caused loss of life and property. While the recent tornado outbreak in Arkansas, Tennessee and Kentucky spared our physical banking facilities, we directly serve three separate communities that have been affected. The needs of our clients immediately after the event have remained the same: access to cash. This problem was that our branch offices were without power or connectivity to our main processor. Setting up a contingency plan that considered the balance between providing the customer with their money, when we had no idea how much they had in accounts with risks the bank was willing to take , has helped to build confidence in the institution, management and employees. Continuously, as expected, there has been a need for short-term capital in the form of financing to fill gaps between insurance payments. Lastly, and perhaps most importantly, they need someone who understands their functioning and family dynamics and who can provide them with a listening ear to help them overcome the challenges ahead as they rebuild.

Listening to the needs of the community we serve over the long term is where a community bank will strive.– Josh Bailey, Vice President of Agriculture and Commercial Lending at the First Community Bank of the Heartland in Fancy Farm, Kentucky

ABA: How has your institution specifically responded to the needs of communities affected by natural disasters?

Bailey: The actions we have taken in the past and in the aftermath of the most recent disaster have been similar. In both situations, after ensuring the health and safety of the employees, we started to cast wider nets to see where we can help. Our actions are fluid and change according to the needs within the community. To date, following the tornadoes, we have attempted to contact all customers by text, phone call or visit that we know were on the way to the storm. We have continuously committed financial resources to organizations at the forefront of recovery efforts, enabled employees to participate in on-the-clock volunteer opportunities, and provided meals to affected communities. We are continuously working on an education campaign to educate our customers and our communities about the potential scams that could result from the devastation, including construction scams, disaster relief scams and identity theft. . From an agriculture perspective, we will be monitoring actions taken by FEMA, the United States Department of Agriculture, and the USDA Farm Service Agency regarding programs that may provide assistance. The public response immediately after a disaster of this magnitude is phenomenal, if not overwhelming, however, the process of rebuilding lives and communities will potentially take years. Listening to the needs of the community we serve over the long term is where a community bank will strive.

ABA: In general, what do you think are the biggest challenges and opportunities for banks serving agricultural and rural clients?

Bailey: The challenges of serving agricultural and rural customers are not much different from those of a typical urban environment. Mitigating risks of all types is at the forefront of the minds of all agricultural and rural bankers. Creating efficient markets, especially for retail type businesses, is always a concern. Perhaps the vastness of a rural market, however, could be the most difficult aspect. Communication becomes the key, unfortunately there are limiting factors such as inadequate high speed internet access and poor cellular infrastructure in some areas. Either way, the opportunities are limitless. Rural farmers and entrepreneurs invest extraordinary amounts of capital in their businesses and communities every year. The key to seizing these opportunities is being able to see the vision and create funding that can balance the needs of the client with the risk tolerance of the bank. I don’t think anyone does this job better than community bankers.

Josh Bailey is from Hickman County, Kentucky. He graduated from Murray State University in 2003 with a bachelor’s degree in agriculture. Upon graduation, Bailey joined the First Community Bank of the Heartland, where he is currently vice president of agriculture and commercial loans, working with producers and rural businesses in western Kentucky and the north. -western Tennessee.


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