Black Money Business Jobs : Ties to community keep minority-owned banks thriving

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The Diaspora
In these lean economic times, minority-owned banks and thrifts are holding their own - good news for their primary customers, the many mom-and-pop businesses that dot the central city.

"The fact that those banks are located in an area that traditionally has been underserved provides them a competitive advantage," says Harry Argue, executive vice president and chief executive officer of the Wisconsin Bankers Association.

Minority-owned financial institutions have been part of the American scene for almost a century. Today, about 150 minority-owned banks and thrifts have more than 800 offices across the U.S. with combined assets of $46 billion.

Many of them have close ties to the communities they serve and are reminiscent of the old-fashioned neighborhood bank, where customers knew the president and senior officers by name.

Minority-owned banks have been a lifeline for African-American entrepreneurs like Lorraine Carter, president and chief executive officer of V.E. Carter Child Development Group. Her company, which runs five child-care centers in Milwaukee, serves 475 children and employs 160 people.

Carter and her late husband, Veledis, were among the first customers of North Milwaukee State Bank when it opened 30 years ago.

"So much of Carter's continued existence and viability is because we had the bank (North Milwaukee) as a partner," Lorraine Carter says. "It's rather frightening when you think in terms of our survival without the support of small, community banks like North Milwaukee."

Locally, North Milwaukee State Bank, at 5630 W. Fond du Lac Ave.; Legacy Bancorp, at 2102 W. Fond du Lac Ave.; and Columbia Savings & Loan Association, 2000 W. Fond du Lac Ave., are successes.

Legacy and North Milwaukee are among only three minority-owned banks in Wisconsin. Of the state's 365 banks, they are the only ones controlled and run by African-Americans. Bay Bank in the Green Bay area is owned by the Oneida Tribe of Indians of Wisconsin.

Columbia Savings is the state's only black-owned savings and loan. Ardie and Wilbur Halyard started Columbia in 1924 to help blacks obtain quality housing.

"While we have remained true to our mission, we're planning to become a full-service financial institution within the next year," says Columbia's president, George E. Gary. "People want to see stable African-American institutions. There's a niche that all of us can fill."

North Milwaukee, the oldest minority-owned bank, had second-quarter assets of $48 million. Legacy, established in 1999 and run by four women, had assets of $30.1 million. Columbia reported assets of $16 million.

Future looks bright
While major financial institutions are beginning to move in on their turf, "the future looks bright for minority-owned banks," says Norma Hart, president of the National Bankers Association, a trade group for the nation's 100 minority and women-owned banks.

"Even with the economy the way it is, they seem to be holding strong. And those that have suffered are coming back," Hart says.

The National Bankers Association will hold its 74th annual convention in Milwaukee Oct. 9 to 12. More than 200 minority and women bankers are expected to attend the event, which is sponsored by North Milwaukee and Legacy banks and the state Department of Financial Institutions.

"It took us seven years to bring this conference to Milwaukee," says R.T. Myricks, president and chief executive officer of North Milwaukee State Bank. "Milwaukee will see more black bankers than it has seen in the history of this city."

Like any business these days, minority-owned banks face their share of adversity and have to evaluate their loan portfolios and adjust accordingly. But they also face challenges uniquely their own, as they are more likely to serve communities that are poor, urban and underserved by larger financial institutions.

"Generally, our customers are the ones who get laid off first, so it creates stress on us in terms of higher volumes of past-due home loans and installment loans and bankruptcies," Myricks says. "We've had to tighten down on our credit. Our first obligation is to keep the bank going."

Over the years, small businesses and churches became the bread-and-butter of many black-owned financial institutions. By building such relationships, Columbia Savings and North Milwaukee bailed themselves out of tough times in the past.

Now, minority-owned banks must continue to emphasize what they know best: relationship banking.

They also must revitalize their business, expand into new areas and develop the critical mass to compete with mainstream financial institutions.

"We have to continue to look for the opportunities," says Deloris Sims, president of Legacy Bank. "When the economy is down, there is going to be a ripple effect. This is a good time for us (minority-owned banks) to take a look at ourselves."

http://www.jsonline.com/bym/biz2biz/oct01/newjohncol100101.asp?format=print
 

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