KBRA Financial Intelligence

Mapping Banks’ Exposure to West Coast Wildfires

The 182 disaster declarations reported by the Federal Emergency Management Agency (FEMA) throughout 2024 marked a four-year high. Excluding biological disasters, 2024 recorded more declarations than any other year, except for 2011, in a dataset spanning over seven decades. The leading incident type was fire, with 69 fire-related disasters occurring throughout the year. FEMA’s first disaster declaration of 2025 was also fire related, as five counties in Oregon were placed under a state of major disaster declaration (DR) at the beginning of January.

Just one state away, in Los Angeles County, CA, deadly wildfires fueled by the most severe windstorm in 14 years have caused widespread devastation. The California Department of Forestry and Fire Protection (CAL FIRE) reported that five active wildfires were burning in the county last week, engulfing over 40,000 acres. On January 7, FEMA declared Los Angeles County a disaster area. With winds expected to continue gusting up to 70 mph this week, the two largest fires—still largely uncontained—remain at risk of spreading further.

The two largest wildfires, the Palisades Fire and Eaton Fire, account for the majority of the burned area with 24,000 and 14,000 acres affected, respectively. CAL FIRE estimates that the fires have destroyed at least 12,300 structures. Less than a month into 2025, the year has already become the most destructive for California wildfires since 2018. AccuWeather’s preliminary estimate of damage and economic loss from the wildfires ranges between $250 billion and $275 billion, although these figures could rise if the fires continue to spread.

Using KFI’s platform to generate a customized deposit summary report for the 10 counties in Southern California (SoCal), we find that Los Angeles County was home to 1,429 bank branch offices in 2024, representing 44% of all SoCal branch locations. The $503 billion in deposits held by these offices accounts for more than one-half of all deposits in SoCal. On-the-ground footage posted to social media confirms that at least one Bank of America, N.A. (KFI Score: B) office in the town of Altadena was severely damaged by flames from the Eaton Fire. Bank of America has 208 branches within Los Angeles County, making its physical presence the second-largest behind JPMorgan Chase, N.A. (KFI Score: B), which has 245 branches.

Bank of America and JPMorgan Chase also maintain a combined market share of more than one-third of all deposits in the county. However, in terms of their total business, the two banks’ local deposits represent less than 5% of their total deposits, suggesting that a large portion of their assets are unlikely to be exposed to Los Angeles County. That may not be the case for many other banks operating in the region. KFI data shows that City National Bank (KFI Score: B), the largest Los Angeles-headquartered commercial bank in the U.S. at $92.1 billion in total assets, maintained nearly two-thirds of its deposits in Los Angeles County, as well as 29 of its 65 (45%) total branch office locations. More than one-quarter of 92 banking institutions with offices in Los Angeles County have at least 75% of their total deposits and/or branch locations concentrated within the county.

As noted in KFI’s October 2024 analysis of Hurricane Helene’s impact on the Southeastern U.S., community and regional banks often depend heavily on their local markets, making them more susceptible to financial degradation from natural disasters. KFI’s newly developed Dashboard, which includes upgraded deposit and branch mapping tools, was recently launched in beta and can be used to identify the precise footprint of multiple financial institutions within a specified geographic area. That area can be defined as broadly as a group of states or as granular as a single zip code.

The Palisades Fire, just 13% contained, stretches west to east from Malibu to Pacific Palisades. Evacuations to the south in Santa Monica are now underway. After cutting its way through Altadena, the Eaton Fire, considered to be at 27% containment, has threatened to spread toward Pasadena and Sierra Madre. The layout of 10 banks’ branch locations in the Pacific Palisades-Santa Monica area is demonstrated in our branch and deposit mapping tool below.

Paul Salazar, luxury estates director at the Beverly Hills-based Hilton & Hyland real estate company, told the San Francisco Chronicle that he estimated the Palisades Fire alone had already burned somewhere around $4 billion in homes. It is likely that most of these homes are under mortgage as California’s rate of mortgage-free homeownership was just 18%, the lowest of any state in the U.S. Although lenders typically require homebuyers to attain some form of insurance policy to protect their mortgages, a number of major insurers have pulled back coverage in the state over the past few years, raising concerns about underinsurance of properties and the solvency of California’s state-backed FAIR insurance plan, which now covers $458 billion in property, nearly triple the total insured value in 2020.

Commercial real estate (CRE) loans also face heightened risks emanating from the fires. Physical damage and operational downtime for repairs can disrupt cash flows, complicating borrowers’ repayment abilities. Banks with a significant presence in affected areas may have to manage indefinite operational costs and risks to their lending portfolios. 3Q 2024 call report data indicates several regional-sized depositories (between $10 billion and $100 billion) such as Citizens Business Bank (KFI Score: B) and Bank of Hope (KFI Score: B) are significantly more exposed to non-owner occupied CRE than any other loan category at 75% and 65% of total lending, respectively. Individual banks and credit unions can be sorted by loan composition and delinquency rate impacting those loans, via the Data Wizard in KFI’s Excel add-in, as well as the Loan Category and Delinquency Report template from our Template Library. To access our full library of tables and templates, request a demo with KFI.