Category Archives: Banking & Credit Unions

Industrial Bank Acquires City NB of New Jersey Strengthening One Black Bank And Closing Another


Industrial Bank, based in Washington D.C., becomes the undisputed third largest African American owned bank by assets after securing City NB of New Jersey, based in Newark, New Jersey, at the end of 2019 after City NB of New Jersey went under receivership by the FDIC as a failed bank. Previously, Industrial was competing with Broadway Bank in California and Citizens Trust Bank in Georgia for third position. However, with the acquisition of City’s $120 million in assets that spot is now comfortably secured. This makes what was going to be an otherwise paltry year for Industrial being able to increase their assets into a blowout one. Prior to the acquisition, Industrial was on pace to increase its assets by just over 1 percent in fiscal 2019, but this gives them a gain of 26.1 percent instead.

It also pushes the geographic reach of the D.C. based bank into multi-state territory. A claim that only three other African American banks, OneUnited, Liberty Bank & Trust, and Unity National Bank of Houston have. The first two being the largest two African American owned banks, respectively. New Jersey is home to almost 1.4 million African Americans, the 14th largest African American population in the United States so if Industrial can get right what City was getting wrong, there is immense opportunity there.

The FDIC Press Release: “City National Bank of New Jersey (“City National”) in Newark was closed today by the Office of the Comptroller of the Currency, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect depositors, the FDIC entered into a purchase and assumption agreement with Industrial Bank in Washington, D.C. to assume all of the deposits of City National.

The three branches of City National will reopen as branches of Industrial Bank during normal business hours. Depositors of City National will automatically become depositors of Industrial Bank.  Because deposits will continue to be insured by the FDIC up to applicable limits, customers do not need to change their banking relationship in order to retain their deposit insurance coverage.

Customers of City National should continue to use their existing branch until they receive notice from Industrial Bank that it has completed systems changes to allow other Industrial Bank branches to process their accounts as well.

This evening and over the weekend, depositors of City National can access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual.

As of September 30, 2019, City National had approximately $120.6 million in total assets and $111.2 million in total deposits. In addition to assuming all of the deposits of the failed bank, Industrial Bank agreed to purchase essentially all of its assets.”

Morehouse Alumnus Kevin Perry Investment Brings African American Owned Banking Back To Oklahoma


As one of the places with a storied African American economic history, Oklahoma holds a certain lore among African American economic historians. The home of Greendwood, Oklahoma, better known to many as Black Wall Street, its symbolic significance can never be overstated. It is also home to Langston University, a quiet but premier HBCU whose goat research is legendary in HBCU research circles and has considerable commercial value. However, Oklahoma has been without an African American owned bank for quite sometime but no more. Enter Kevin Perry, president and CEO of Perry Publishing & Broadcasting, a second-generation family owned company based in Oklahoma City, Oklahoma, and director at First Security Bank & Trust has helped usher in a new era of African American owned banking in Oklahoma.

According to S&P Global, “Kevin Perry, owner of 71,240 shares of FSB Bancshares Inc. stock, is proposing to acquire an additional 23,800 shares, according to a change in control notice filed in late March (2018). Perry already owns a 22.44% stake in the Oklahoma City-based company. The sale would increase his ownership in FSB to 29.948% — and in turn give him and other African American shareholders an aggregate 51% stake.”

The addition of First Security Bank & Trust to the African American Owned Banks banking landscape has stopped the proverbial bleeding the group has been experiencing over the past decade. Since 2010, African American Owned Banks have seen almost 50 percent of the institutions disappear. It is also worth noting that there have been no new AAOBs started in almost two decades and although First Security Bank & Trust is not new per se (founded in 1951), its acquisition by African American investors does make it new to our banking infrastructure and expands the financial geography of African American owned financial institutions. It is a vital addition and hopefully will build momentum for a new expansion that will help strengthen AAOBs in HBCU states and territories for the future.

 

Is African America’s Financial System Collapsing? The Sale of First State Bank Reduces Black Banks To 19


“First we need a savings bank. Let us put our moneys together; let us use our moneys; let us put our money out at usury among ourselves, and reap the benefit ourselves. Let us have a bank that will take the nickels and turn them into dollars.” -Maggie L. Walker

The #BankBlack movement maybe moving, but quite simply it is not moving fast enough. After almost 100 years in business, First State Bank, the last African American owned bank in Virginia, has sold the majority of its ownership to Casey Crawford, CEO & Founder of Movement Mortgage (pictured above). The sell reduces the number of African American owned banks to 19 and represents an almost 20 percent decrease in the number of African American owned banks lost in the past two and half years.

It has been seen that with the absence of African American owned banks and credit unions comes much predatory behavior to the community. Banks like Wells Fargo and Citigroup have paid hundreds of millions for their behavior and payday loans are as rampant as ants at a picnic within the community. Since desegregation, African American institutions from neighborhoods to businesses and even schools that were inherent to the interest of African America have been in a struggle to stem the tide of a collapsing institutional fabric.

As recently as the early 1990s there were over 50 African American owned banks in the United States. First State Bank’s sale removes $32.9 million in assets from African America’s financial hold. Key states absent of an African American owned bank were already Florida, Mississippi, New York, and Ohio all of which have major African American populations. Now, add Virginia to that list which is a key state down the I-95 corridor and proximity to the nation’s capital. The loss of First State Bank truly echoes tears of frustration as Virginia was the home of Madam C.J. Walker’s St. Luke Penny Savings Bank, which she chartered in 1901 making her the first African American woman to charter and preside over a bank. Now, there are none in the state 116 years later. Is this what we call progress?

There has not been a new African American owned bank opened in seventeen years since Alamerica Bank was opened in Alabama. The #BankBlack movement is simply not enough if African American institutions like HBCUs, businesses, fraternal organizations, and the like are not willing to move their deposits into them. A harsh reality is that lending to the African American community is risky. We have lower median incomes, less assets, and more volatile working lives. The chance that we could become unemployed is a much higher probability than other Americans, therefore our banks are always at more risk for loan default from us. They need even more reserves than banks like JP Morgan and company who are being required to hold more because of their systemic importance. Our banks must look at themselves in the same light, they are systemic to our community’s financial health. If not, the candlelight of opportunity is going to quickly fade away into darkness when African America truly has no place to turn for its own financial well being.

First State Bank closing is more than just 100 years of financial stability to southeast Virginia’s African American community, it is another nail in the coffin of African American institutionalism which we so desperately need to revive.

 

From HBCU To Bank CEO: 4 HBCU Alums Help Lead America’s Black Bank Revival


“If your actions inspire others to dream more, learn more, do more and become more, you are a leader.” – John Quincy Adams

What good is a pipeline if it is not used, promoted, strengthened? Going to an HBCU or graduating from is not the beginning or ending of the African American ecosystem, but it is a key part of it. Unfortunately, the data shows that African American intellect and labor (even HBCU graduates) are primarily being used to build up firms owned by other communities. Recent data from the US Census shows that it is likely that less than one percent of African Americans work for an African American owned firm. It stands to reason that the subdata for HBCU graduates working for an African American firm is likely to parallel.

If HBCU business schools are not being trained to run African American firms and the unique path that they face, then what is the point of having them? Goldman Sachs, J.P. Morgan Chase, Bank of America, and Citigroup all have CEOs that attended PWIs (shocker) and even more to the point, attended Ivy League colleges. It would be fair to say that of the almost 7,000 banking institutions in the United States, if you were to subtract out the African American owned banks, that 75 percent of those banks would not be being run by those who went to HBCUs. However, that is exactly what is happening in the African American banking and private sector in general. The vast majority of our institutions operating in isolation, not in conjunction with each other. HBCUs are not banking with, training for, or encouraging their graduates in choir with African American banks and private sector so therefore the institutional leadership at most of our financial institutions and private firms is using a playbook not tailored to our needs.

However, there does appear to some change on the horizon. OneUnited Bank, headquartered in Boston, Massachusetts, and headed by one of the most powerful women in banking Teri Williams, although not an HBCU alum herself is showing herself to be a strong HBCU advocate, and the bank has two HBCUs banking with them in Roxbury Community College (MA) and Florida Memorial University (FL). Something that should lead to many future opportunities for graduates of the two institutions in the future both through internships and employment creating a future pipeline for more HBCU graduates to head up African American owned  firms. So who are the HBCU graduates sitting in African American owned banks c-suites helping lead the current #BankBlack revival that has seen millions of dollars in deposits over the past year?

Dr. Deborah A. Cole; Tennessee State University

As the president of Citizens Bank, headquartered in Nashville, Tennessee and noted as the oldest African American bank still in operation, Dr. Cole has led an impressive increase in the bank’s balance sheet with assets increasing 5.6 percent over 2016, third among the 20 AAOBs.

Ms. Jacquitta Powell Green; Alabama A&M University

A dual role, Ms. Green as she heads up Mobile, Alabama’s Commonwealth National Bank as CEO and Chairwoman of CNB Bancorp, the bank’s holding company. “Mrs. Green is the Vice President of Northside Exchange, which has offered financial services to the unbanked and underserved of the Mobile area for more than 30 years. In 2001, a national tax preparation franchise extended her an offer, and she established Envision Enterprises to offer unbiased and honest tax preparation services.”

Mr. James A. Sills, III; Morehouse College

Mr. Sills heads up one of the most prominent and well known brands among African American owned banks, Mechanics & Farmers’ Bank in North Carolina. The bank has changed its name to M&F Bank a few years ago in an effort to rebrand and attract a young demographic. “Prior to starting his own company in 2007, Mr. Sills was an Executive Vice President of MBNA America Bank (now Bank of America), the largest credit card institution in the world. In this capacity, he served as the Director of Corporate Technology Solutions for the $80 billion US Card Division.”

Ms. Evelyn F. Smalls; North Carolina Central University

Lastly, Ms. Smalls is the President and CEO of United Bank of Philadelphia. The only HBCU graduate heading up a bank outside of the South. “With over 30 years experience in banking and community development, Mrs. Smalls is responsible for the leadership and management of the Bank including setting the direction of the organization, communicating its vision and adapting the culture and operations to achieve success. Her leadership helped transform the Bank’s strategic focus into a “Business Bank” to ensure small businesses have access to affordable loans through the SBA 7A program.”

 

State Bank of Texas Acquires Seaway Bank & Trust: Black-Owned Banks Reduced To 20 Nationwide


The beginning of the year has not proven kind to African American owned banks in the past three years. To begin 2015, two African American owned banks closed their doors, followed by 2016 where North Milwaukee closed, and now Seaway Bank & Trust will exist in name only. Its deposits and assets were acquired in January 2017 by Sushil Patel, the president of the State Bank of Texas and part of the family that owns the acquiring bank. In an interview, Mr. Patel states on the potential dynamic of their ownership in the midst of the #BankBlack movement, “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.”

This means that within the last seven months as of January, $420 million in assets have been wiped from African American owned bank balance sheets. An amount that is equal to ten percent of all remaining African American owned bank assets. For perspective, US banks in total have approximately $15.3 trillion in assets. The loss of $1.5 trillion is an amount twice the initial size of the US bank bailout from the Great Recession. In other words, this hurts and it hurts bad.

For the full FDIC press release on Seaway Bank & Trust’s closure, click here.