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MOD SQUAD – Temporary branches become burgeoning bank trend

As appeared in New Orleans City Business
Posted with permission of New Orleans City Business

Trina Jeffery, manager of the Chase branch on Carrollton Avenue, works from a modular building while a permanent site down the street is being repaired. “Victims of Hurricane Katrina still relying on temporary trailers for housing can’t rehab their homes soon enough. Prefabricated modular buildings are the way to go, however, for bankers returning to pre-storm locations and expanding in the metro area.

Customers regularly line the ramp outside Chase’s modular building on Carrollton Avenue near Earhart Boulevard — the bank’s temporary home while offices at Carrollton and Claiborne Avenue are being rebuilt. Michael Lulich, senior vice president and retail market manager in New Orleans, said the brick-and-mortar branch will reopen by year’s end.

Chase operated seven temporary facilities after the storm and has moved back into four pre-Katrina branches. The West Judge Perez branch is temporarily sited in a shopping center near the original office now being refurbished, and modular buildings are open at two locations — Carrollton and Lake Forest — while Chase determines what to do at its former Lakefront location.

Lulich said modular buildings allowed Chase to assess areas it served pre-Katrina and decide the scale of rebuilding plans. The concept could be applied to Chase expansions in other areas, he said.

“It’s something that’s worked here and we don’t see any reason it wouldn’t work in a non-hurricane area.” Lulich said……..

Earline Boisedore, First NBC senior vice president of retail operations, said it costs roughly $1 million to construct a new bank branch.

“It would take me six to nine months to build a branch,” said First NBC President and CEO Ashton Ryan. “(Modular buildings) are a tremendous resource for dealing with the customer early rather than waiting for six to nine months for the branch to be built.”

The state Office of Financial Institutions does not track how many modular buildings are being used since a bank must commit to building a brick-and-mortar branch to obtain a permit for a temporary site.

Sid Seymour, OFI chief examiner, said the state allows banks 18 months to build a permanent branch where a temporary facility is being used, but some leeway is being granted because of Katrina and overwhelming construction demands. He said most banks exit modular buildings within a year.

J.D. Fields, deputy chief examiner, said more modular branches are going into New Orleans and the North Shore as banks move to areas where the population has shifted.

“The sooner they can get into operation, the sooner they can get their name out and start to turn a profit,” Fields said.

First Bank and Trust will use modular buildings to implement its growth plan, said Mickey Brown, FBT president. Of the 48 branches it plans to open over the next five years, most will be preceded by temporary branches.

Brown said the modular sites “allow us to get a head start and get that business flowing into the bank before the completion of the branch.”

Since banks have to replace temporary offices with permanent ones, the modular buildings are not considered test sites, Seymour said. In most instances, banks will open loan production offices that do not accept deposits or conduct cash transaction, to determine a market’s viability.

Seymour said there is some uncertainty while a temporary location is in use.

“It’s hard for (banks) to tell how accepted that particular branch is going to be until they actually get the brick-and-mortar branch built,” he said. “The customers … want some sign of permanency in that area. Until you put the bricks and mortar there, they don’t have the comfort level.”

(c) 2007 New Orleans City Business. All rights reserved. Reprinted with permission by the Modular Building Institute.
No reproduction, transmission or display is permitted without the written permissions of New Orleans City Business.

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