Bankers feel paralyzed in face of wildfires

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Raging fires, billowing plumes of smoke and power outages are throwing the lives of Californians from Los Angeles to San Francisco into disarray.

Dry, windy conditions have people in the state on edge, prepared for the loss of their homes and businesses, bankers say. The Kincade Fire is causing duress along the Sonoma Valley, while the Getty fire is threatening residents near Beverly Hills.

With windy conditions threatening to reemerge this week, it has become difficult for bankers to assess the magnitude of the threat, how long it will last and the ultimate amount of damage.

“The situation is fluid. It’s hard to tell at this point with the fires still moving,” said David Joves, California regional manager for the $1.9 billion-asset Bank of Guam.

“We’re on pins and needles, that’s for sure,” said George Leis, president and chief operating officer of the $1.5 billion-asset Montecito Bank & Trust in Santa Barbara, Calif.

Leis said his sister, like scores of other residents, was evacuated from her home in Pacific Palisades this week.

In addition to fire damage, banks and their customers are dealing with intermittent power outages as utility companies resort to blackouts to avoid the potential of downed power lines triggering brush fires.

Pacific Gas & Electric plans to cut power to more than 600,000 clients in the northern part of the state Tuesday and Wednesday. Southern California Edison said it could shut off power to more than 350,000 customers.

Swaths of Montecito Bank’s service area could face new blackouts, Leis said.

“We’re getting [clients] prepared for that eventuality,” Leis said. The bank is encouraging businesses to get important transactions completed in advance, if possible, and communicate with customers about alternative plans.

Montecito Bank will use backup generators to keep its branches open.

“When the rest of the city is dark, we can still be there to serve,” Leis said.

Banks will assess client needs and tailor solutions wherever they can, said Beth Mills, a spokeswoman for the California Bankers Association.

“Banks are closely monitoring the situation as it evolves and will assess and develop a response to meet the specific needs of our communities,” Mills said.

“We encourage any customer who has been directly impacted and is experiencing a financial hardship due to these events to outreach to their financial institution as soon as they can to specifically discuss their individual financial situation and understand what assistance may be available to them,” she added.

While helping customers withstand the initial blow and manage through blackouts is vital, Kevin Bender, chief operating officer at the $690 million-asset American River Bank in Rancho Cordova, Calif., said the heaviest lifting often comes in the recovery.

“The biggest challenge typically comes in the wake of disasters — when the rebuilding starts,” Bender said.

Once the fires subside, bankers said they will move quickly to account for employees and clients, then fully assess the physical state of the hardest-hit locations. After previous disasters, bankers have often offered grace periods on loan payments and waived fees for displaced clients.

Once clients return to their homes or businesses, bankers will need to help them go about repairing damage or replacing properties. This would involve working with insurers and government agencies to secure rebuilding funds and assess financing needs.

Montecito Bank went door to door offering small businesses low-interest loans after fires and mudslides in California last year, Leis said.

“There were businesses whose revenue just stopped,” Leis said, prompting emergency action from the bank.

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