Dispatches from Chicago's south side.
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| ISF Bank branch 87th & King Drive |
The last black-owned bank based in Chicago is changing its name https://t.co/TnKmN7rQGp pic.twitter.com/cN2LP4oVYR— Chicago Tribune (@chicagotribune) July 25, 2018
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| New Year's Eve 2007 |
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| @th3melan8dgawd |
Seaway customer Gwen Hicks said she planned to withdraw all her money and close her account. She said she would start banking at Illinois Service Federal.Worlee said on Nextdoor that "If the new owners think just keeping the name is enough they are in for a rude awakening."
“I definitely want to keep our money in our community and not in Texas,” she said. “Texas isn’t going to do anything for our South Side streets, our neighborhood.”
Sushil Patel, president of State Bank of Texas told Crain’s Chicago Business that he understands some depositors want to bank with an institution that’s putting money back into the community. State Bank of Texas declined to be interviewed by WBEZ.
Despite State Bank of Texas being a minority-owned operation, Viveca Ware of Independent Community Bankers of America said there will be cultural differences.
Ware said minority-owned banks don’t necessarily translate from one to the next.
“It’s really amazing to sit there and listen to the cultural difference and how they need to modify their operations to address to provide meaningful services to those communities,” Ware said.
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| www.seawaybank.us |
What does the "bank black" movement stand for? The Indian-American family that just took ownership of Chicago's largest African-American-owned bank is about to find out.We learn for the first time one of the other bidders of Seaway:
Dallas-based State Bank of Texas, a lender mainly known for making loans to Indian-American operators of hotels around the U.S., was tapped Jan. 27 by federal bank regulators to assume the deposits and most of the assets of Seaway Bank & Trust, based on Chicago's South Side.
A large percentage of Seaway's depositors are drawn at least in part by its status as African-American-owned. Seaway's "bank black" campaign last year brought in at least $8 million, with new customers depositing their money at the bank on the basis of its ownership even though its financial condition was rapidly deteriorating.
How many of those depositors will want to stay with a Seaway Bank under Indian-American ownership?
Sushil Patel, president of State Bank of Texas, acknowledges the potential issue.
"I'm not a black bank," he says in an interview. "I'm not a white bank, but I'm definitely not a black bank."
The most important consideration for depositors, he says, is whether their money is safe.
"Banking is still banking," Patel says. "I respect the idea of depositors wanting to put money into a bank that will put money back into that community."
There was competition in the bidding the Federal Deposit Insurance Corp. held for Seaway's assets and deposits. The three other bidders included another black-owned bank, Liberty Bank & Trust of New Orleans, according to an FDIC disclosure.Liberty Bank has a branch on the west side where the former Community Bank of Lawndale/Covenant Bank was headquartered. Seaway won't have their own management team for the time being as you saw in the excerpt.
The agency didn't say how much Liberty bid or even whether its bid met the FDIC's specifications. Other bidders were Republic Bank of Chicago, owned by Greek Americans, and Raleigh, N.C.-based First-Citizens Bank & Trust, a publicly traded, $31 billion-asset lender.
Usually, regulators take pains to try to find a buyer for a failed minority-owned bank with the same ethnicity. That was the case in 2014 when State Bank of Texas took over failed National Republic Bank of Chicago, also an Indian-American-owned lender. Likewise, Seaway was the chosen buyer for Milwaukee's black-owned Legacy Bank in 2011.
In its deal with State Bank of Texas, the FDIC effectively paid the bank more than $40 million to take ownership of most of Seaway, according to the purchase agreement (see the PDF).
That will incentivize State Bank of Texas to work out Seaway's bad loans as efficiently and cost-effectively as possible.
The FDIC contacted 350 banks, including 102 owned by minorities, to bid on Seaway, a spokesman says. The Texas bank's was the lowest cost for the agency, which by law had to accept it, he says.
As with many Indian-American-owned banks, State Bank of Texas' lending expertise is chiefly in the hotel industry, accounting for about 60 percent of its loan portfolio.
Otherwise, it mainly makes commercial real estate loans, so it has little experience in Seaway's bread-and-butter business loans and mortgages.
"At the end of the day, it's still lending," Patel says.
Once Seaway's bad loans are charged off, sold or worked out, the bank will continue making the same kinds of loans it used to, he says. The Patels won't install a new bank president for Seaway. Instead, the three family members—Sushil, his father, Chan Patel, who is chairman and CEO, and his brother Rajan Patel, chief lending officer—will take turns being in Chicago and running the operations, he says.
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| Via Crain's |
Seaway Bank & Trust is in the early stages of a capital-raising campaign that, if successful, could well threaten its status as the largest black-owned bank in the Midwest.Seaway's closest competitor apparently is Urban Partnership Bank:
The South Side lender has suffered $16 million in total losses over the past five quarters ended March 31. Its capital is below the minimum needed for the bank to be deemed “adequately capitalized” by regulators. To prop it up and enable it to lend actively, Seaway is preparing to select an investment banker to raise what one source says would be more than $15 million in fresh capital.
In an email, a spokeswoman acknowledges the need for cash but won't comment on the amount sought. “Seaway is currently engaging investment bankers for a capital raise,” she says. “We remain committed to our mission and our markets.”
The bank also remains without a CEO since the departure in September of Darrell Jackson, who led Seaway for only a year before his exit. Executive Chairman Veranda Dickens, who has been in charge since the 2013 death of her husband, longtime Seaway owner and Chairman Jacoby Dickens, “is managing day-to-day operations of the bank,” the spokeswoman says. The CEO search “is ongoing and progressing well,” she adds.
Those optimistic words notwithstanding, Seaway has suffered quite a reversal of fortune in the 18 months since Dickens declared that the bank wouldn't need financial help. That came after high-priced consultants determined that the previous management team had made material accounting errors not in the bank's favor. After financials were restated for all of 2013 and half of 2014, a substantial loss was changed to a profit for 2014. Since then, however, losses have piled up, leaving Seaway with just $25 million in equity. At the end of 2014, when Dickens made her declaration, the bank's equity stood at $43 million
It's not assured that Seaway will be able to raise the money, especially when another South Side bank catering to African-Americans, Urban Partnership Bank, also is seeking more than $20 million in new equity.I've attached a graphic regarding Seaway courtesy of Crain's.
UPB—already backed by banking giants JPMorgan Chase, Bank of America and Goldman Sachs—is expected to seek the funds from a group of local and national banks. It's ahead of Seaway in terms of holding meetings with prospective investors and other preparations.
If other banks end up bailing out UPB, that could eliminate an important potential source of capital for Seaway.
And if Dickens does find help, the likelihood of keeping the bank in African-American hands may be remote. The amount of money Seaway needs likely will compel her to seek investors interested in preserving an important city lender regardless of their race.
Chicago has been losing black-owned banks, with two failing in recent years. Another on the verge of failure—South Side thrift Illinois Service Federal, formed during the Great Migration of blacks to Chicago from the South—recently was rescued with $9 million from a Ghanaian-American family.
Also a flyer for this event can also be seen at this link!ALDERMAN RODERICK T. SAWYER TO HOST SHRED-A-THON
Sixth Ward Alderman Roderick T. Sawyer will host a Shred-A-Thon on Saturday, November 9 in the parking lot of the 6th Ward Service Office, 8001 S. King Dr. from 10 a.m. to 2 p.m. Alderman Sawyer has dedicated this day for getting rid of your paperwork that is safe for the environment while protecting all your personal information. For more information, call (773) 635-0006.
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| Surveillance pic of the May 2007 robbery released by FBI - Sun-Times |
I wrote about this on my other blog 6 years ago and it was news when I returned from a brief trip to Texas that year. Alas because of many changes two of those links no longer work and one of those links at least contained some news video.A bank robber who murdered a teller during a botched heist on the South Side nearly six years ago has been sentenced to life in prison by a judge who called his case “a horrific tragedy.”But the harshest words for killer David Vance came from the teller’s father, who branded him “vermin” during an emotional sentencing hearing Wednesday.Vance, 34, shot dead 23-year-old Tramaine Gibson, a father of two, when Gibson said he couldn’t open the vault at the Illinois Service Federal Savings and Loan in the Chatham neighborhood on May 22, 2007.
Gibson’s dad, Verton Gibson, has been attending court hearings ever since. On Wednesday, he stood just a few feet away from Vance and loudly asked Federal Judge Joan Gotschall to give “this vermin what he deserves.”
“Do what Tramaine did when he went to work that day — do your job,” he added, urging a life sentence as an impassive Vance looked on.
Gotschall replied that the law gave her no choice but to impose a mandatory life sentence without parole, plus an additional 32 years.
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Two men who robbed the bank with Vance are expected to be sentenced to 20-year terms under a plea deal.
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While to most, this is just another bank failure but if Shorebank fails it will wipe away over 40 years of history and progress of the Chatham community.I thought these comments were very significant.
ShoreBank started as South Shore Bank was started by a multicultural group of individuals to address the lack of capital available to individuals in South Shore as the community changed from being a primarily White Jewish community to African American.
Independence Bank was started at 79th Cottage Grove by a group of African American business men who decided they would control their destiny by creating a bank that would serve African Americans.
In the mid 80's these two banks merged together to create ShoreBank as we know it today.
The combined entities continued to carry out its mission of giving access to capital to those who traditionally were denied access. This access has allowed our community based organizations, social service agencies, churches, real estate investors and homeowners to help build our community.
Although we now have several commercial banking organizations entering the community, the loss of a true "community bank" like ShoreBank which makes decisions based on what is best for its customers and the community, would be a major blow we can ill afford to imagine.
The financial situations of Illinois Service Federal, Seaway and Highland Bank are questionable and the takeover of ShoreBank by an institution with no history in the Chatham community or commitment to serving Chicago ’s urban neighborhoods is sure to lessen the likelihood of an inclusive economic recovery.
