EARTHQUAKE: The Long Road Back : Week 2: Rattled, but Reopening : South-Central’s Founders Bank Faces Task of Rebuilding Itself

Reorganized as a bank in 1991 from the ashes of a failed savings and loan, Founders National Bank’s mission has been to help capital-starved South-Central Los Angeles businesses and residents pick themselves up by their bootstraps.

Now it’s the bank that needs a lift.

Last week’s earthquake hammered the bank’s main offices in South-Central Los Angeles, causing severe structural damage and delaying the bank’s expansion and lending plans. Founders President Carlton Jenkins and other employees have been racing to keep the bank running after city inspectors on Wednesday declared the headquarters building unsafe and ordered it evacuated.

Now, virtually everything must be moved--quickly--including the bank’s teller operations, loan department, customer records and a central computer that runs its automated-teller system.

“I just wanted to cry when I saw the damage (Monday morning) because I knew what it would mean to us in terms of a business interruption,” Jenkins said. “It was just so demoralizing to see it.”

Adding insult to injury, the bank last week was slated to celebrate its third anniversary as California’s only black-owned bank. A party Thursday night for hundreds of employees, supporters and community leaders to celebrate the anniversary had to be canceled.

Jenkins sees the calamity as a temporary setback rather than a crippling blow. Aside from the inconvenience to customers of its headquarters and main branch on West Martin Luther King Jr. Boulevard, who will have to travel to another of its three branches, customers shouldn’t notice any disruption of service, Jenkins said.

But the bank’s plans for adding new branches in 1994 and expanding its lending programs will be hampered. The bank had planned to unveil a home lending program this month, but that will be delayed, Jenkins said.

“This bank is a lender of first resort or last resort for many people,” Jenkins said. “For every dollar that doesn’t come in here, it means $15 less in lending we can do for the community.”

On the other hand, Jenkins added, “our employees are safe. Nobody got hurt, and we’re just going to keep going.”

Jenkins estimates that repairs to the two-story headquarters and branch will cost up to $600,000 and will take three to six months. Meanwhile, Jenkins has transferred 40 corporate office employees and lots of equipment to the three other branches.

Like many small- and medium-sized businesses, Founders had opted not to buy earthquake insurance because of the expensive premiums. The bank has the cash to pay for the damage, Jenkins said, but may seek federal or private loan assistance.

The corporate largess that Founders received following the Los Angeles riots of 1992--as businesses sought to aid the city’s rebuilding efforts--could help Founders’ own rebuilding efforts now. Atlantic Richfield, the Automobile Club of California, State Farm Insurance and Bank of America have invested a total of $4 million in Founders. The bank has $92 million in assets and is financially strong, Jenkins said.

The bank got a big scare Wednesday when the Department of Water and Power wanted to shut off power to the building after inspectors deemed it unsafe. That would have forced Founders to completely cease operations, since the bank’s main computer is still there. Founders quickly contacted Los Angeles City Councilman Mark Ridley-Thomas, who persuaded DWP officials to keep the power on until the computer can be moved.

Damage to the building could have been much worse. Two months ago, as part of ongoing renovations to the 1960s-era structure, Founders replaced the building’s glass walls with concrete block. Without that change, engineers told Jenkins, the structure might have collapsed in the temblor.

The recovery process has been a little easier because the bank had an emergency disaster plan, though Jenkins said the plan was designed with riots, not earthquakes, in mind.

Joseph Moss, president of the men’s group at the Bethel African Methodist Episcopal Church in Los Angeles, says the community won’t let Founders founder.

“A black bank in the black community will survive and still meet the needs of the people,” he said. “The community will come to Founders and help them the way they did last time,” after the 1992 riots.