Crain's: Why Urban Partnership Bank is downscaling
|Photo by reallyboring/flickr|
Speaking of South Shore, I've already heard about Urban Partnership Bank putting their HQ on 71st/Jeffrey on sale within the last two years or so. It appears they're even more serious about it.
In a jarring and starkly symbolic move, UPB is selling the old converted movie theater in Chicago's South Shore neighborhood that served for decades as home to South Shore Bank, later renamed ShoreBank. Beginning March 22, UPB won't have a physical presence in South Shore, where ShoreBank co-founders Ronald Grzywinski and Mary Houghton won renown as the only bankers willing to lend to housing rehabbers during the era of white flight that decimated once-thriving South Shore.Urban Partnership bought the assets of the old Shore Bank that failed in 2010. The new bank is still suffering for some of the old banks losses:
“Buildings have useful lives,” UPB CEO William Farrow says. “We determined that building is past its useful life.”
Mr. Farrow says he hopes to re-establish a retail presence in South Shore as part of the redevelopment of UPB-owned lots on 71st Street. That project will be led by Chicago-based Monroe Investment Partners, which is buying the former theater and two other sites. Monroe was responsible for the development that brought Wal-Mart to the Chatham neighborhood on the South Side.
But Mr. Farrow acknowledges that UPB may not have a location in South Shore—where retail development has suffered as unemployment and crime have increased—for some time. In the meantime, customers of the South Shore branch will be offered tutorials on using UPB's new mobile banking app.
There are risks tied to planning a retail redevelopment in such a hard-hit area, but retaining UPB's nearly empty office building wasn't going to help South Shore recover, Mr. Farrow argues.
“Either you are going to take some shots and try to build those communities (like South Shore), or they're going to die,” he says.
Despite the positive signs, managing ShoreBank's legacy of bad loans surprisingly is growing more expensive with the passage of time. The net ShoreBank-related cost to UPB was at least $12.5 million through Sept. 30, compared with about $12 million in the same period the year before, the bank says. UPB posted an overall loss of $11 million in the first three quarters of 2013. A year ago, Mr. Farrow had hoped to become profitable by the fourth quarter of 2013. Now he won't promise UPB will be back in the black in 2014.Speaking of Walmart, if you paid a visit to the new Walmart in Pullman you might see a bank branch in there:
UPB also will offer a check cashing service to noncustomers that will undercut the prices typically charged by currency exchanges—a potentially significant initiative that could give the many South Siders without a bank a reasonably priced alternative. That will be rolled out first in UPB's branch within the new Wal-Mart superstore in the Pullman neighborhood on the far South Side. That branch, open just two months, already has attracted more than 200 deposit customers who weren't using a bank before.The article is certainly making a case that Urban Partnership is seeking to truly differentiate itself from the old Shore Bank.