Category Archives: Business

Not Just Deposits But Shares: Buying A Stake In African America’s Publicly Traded Banks

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Editor’s Correction: Broadway Federal Bank located in Los Angeles, California is also publicly traded and information added below (July 19, 2016)

“But not only that, we’ve got to strengthen black institutions. I call upon you to take your money out of the banks downtown and deposit your money in Tri-State Bank. We want a “bank-in” movement in Memphis. Go by the savings and loan association. I’m not asking you something that we don’t do ourselves at SCLC.”- Martin Luther King, Jr.

It has been noted here at HBCU Money that after every tragic death of an African American by a police officer our site spikes. The primary cause for that spike has been a search for African American owned banks and credit unions and it usually last for a few days, then there are marches, pacification, and all returns to normal as does our site’s traffic. After the recent deaths of Alton Sterling and Philando Castile though something changed and the current numbers say it may finally be the groundswell needed for a permanent paradigm shift in African America’s thought process of self-dependence and empowerment. Banks are the foundation of allowing a community, city, state, nation to control its money and circulate their dollars within the aforementioned entities. This has been at the root of African America’s problem with getting dollars to circulate within its community – simply put a lack of dollars within the financial institutions in the community. Deposits turn into loans and those loans turn into mortgages to increase African American home ownership, reduces predatory lending, and helps launch small businesses which translates into jobs and wealth in the community usually of the bank or credit union entity.

The shift has been profound as banks like Unity National Bank and Citizens Trust (featured here) are overwhelmed by the number of new accounts to the point that their staff simply can not process the volume. Lobbies are jam packed with African Americans moving their money. The seed is planted, but it can not stop there. Another leg of this has to be investing in these institutions from an ownership perspective. More demand for their shares will cause the institutions share prices to increase and increase the value of the company. This allows the company to expand, open new offices, hire more people, and eventually buy other banks. As it buys other banks, it can scale up and drive down cost, which it can then pass that savings on to customers. All of this is investment in our institutions leads to a cycle of economic independence and empowerment that begins to grow and feed on itself like a snowball rolling down hill.

Lastly, America has roughly 3,700 publicly traded companies, but there are only four African American owned public companies (0.1% of all American public companies) and three of them are banks. Below are their profiles. If you want to buy shares in these companies, visit our link on Opening A Brokerage Account.

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CITIZENS BANCSHARES CORPORATION

CEO: Ms. Cynthia N. Day, CPA (Above Right)

Ticker Symbol: CZBS

Citizens Bancshares Corporation operates as the holding company for Citizens Trust Bank that provides various commercial banking products and services. The company accepts commercial and consumer deposit accounts, such as non-interest bearing checking accounts, money market checking accounts, negotiable order of withdrawal accounts, individual retirement accounts, time certificates of deposit, sweep accounts, and regular savings accounts. Its loan products include consumer/installment loans, mortgage loans, home equity lines of credit, construction loans, commercial loans, and small business loans. The company operates seven full-service financial centers in metropolitan Atlanta, Georgia; one full-service branch in Columbus, Georgia; one full-service branch in Birmingham, Alabama; and one full-service branch in Eutaw, Alabama. Citizens Bancshares Corporation was founded in 1921 and is based in Atlanta, Georgia.

M&F BANCORP

CEO: Mr. James H. Sills, III (Above Left)

Ticker Symbol: MFBP

M&F Bancorp, Inc. operates as the bank holding company for Mechanics and Farmers Bank that provides consumer and commercial banking products and services in North Carolina. The company offers deposit products, including checking, savings, negotiable order of withdrawal, money market, and individual retirement accounts, as well as certificates of deposit. It also provides loans for real estate, construction, businesses, personal use, home improvement, and automobiles; and equity lines of credit, credit lines, consumer loans, and credit cards. In addition, the company offers safe deposit boxes, Internet and mobile banking services, traveler’s checks, notary services, and automated teller machine services, as well as electronic funds transfer services, such as wire transfers. It operates seven branch offices in Durham, Raleigh, Charlotte, Greensboro, and Winston-Salem, North Carolina. The company was founded in 1907 and is headquartered in Durham, North Carolina.

BROADWAY FEDERAL BANK

CEO: Wayne-Kent A. Bradshaw

Ticker Symbol: BYFC

Broadway Financial Corporation operates as the holding company for Broadway Federal Bank, f.s.b. that provides savings and loan business services for low to moderate income communities in Southern California. The company accepts various deposit products, such as passbook savings accounts, checking accounts, NOW accounts, money market accounts, and fixed-term certificates of deposits. It also provides loan products, including multi-family mortgage, commercial real estate, single family mortgage, church, construction, commercial, and consumer loans. It operates three full service branches comprising two in the city of Los Angeles and one in the city of Inglewood, California. The company was founded in 1946 and is headquartered in Los Angeles, California.

Source: Company profiles provided by Yahoo Finance.

The HBCUpreneur Corner – Howard University’s Michiel Perry & Black Southern Belle

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Name: Michiel Perry

Alma Mater: Howard University

Business Name & Description:  Black Southern Belle, Lifestyle Brand Focused on Showcasing Weddings, Fashion, Home Decor, Food and all things Southern!

What year did you found your company? 2015

What has been the most exciting and/or fearful moment during your HBCUpreneur career?  Deciding to do Black Southern Belle full time versus part time. I knew this was something that needed a full time role, but I also had a mortgage and a husband. It all worked out, but not without some serious scary days.

What made you want to start your own company? I was planning my wedding in Charleston, SC where I am from and decorating my home in Maryland and looking for lifestyle inspiration that was both African American and Southern. After looking with little success I realized this needed to exist and started Black Southern Belle.

Who was the most influential person/people for you during your time in college? I had a constitutional law professor who went above and beyond. He let me miss classes for internship interviews and even passed along my information to senior level executives. From him I learned the value of helping people who aren’t even asking.

How do you handle complex problems? As I am a hot head, I often handle complex problems by first relaxing and then reaching out to my mom or husband who are much more calm than I am and often view something very differently than I would.

What is something you wish you had known prior to starting your company? To reach out to my personal contacts more. I built a large network from my past careers but was afraid to reach out as to seem like an opportunist, but so many people I reach out to want to help even more than I ever thought they would. If you are genuine about your business and really want to make the relationship mutual most people want to help you row.

Some would say that today’s playing field is more leveled with media companies like yours not having to focus on print and being able to be exclusively digital. Do you think that is true and do you have any plans to do anything with print? I would agree. You can grow your brand digitally pretty quickly, you don’t even need a website at this stage, just a large Facebook or Instagram following can help you grow. Just build an audience and the business will come. I have a tech/digital background. The main print I deal with is stationery. If I did something print it would be a partnership, not just myself. I love paper but not enough to launch a magazine but I appreciate those who fulfill that goal as I have more subscriptions than I like to tell my husband.

Pinterest has had a significant impact on lifestyle sharing and your company is very active there. What do you think has allowed that platform to set itself apart from all others in that respect? I think it grabs your attention and is beautiful. It’s first focus was the beauty and then technology which is rare to see.  Often times tech comes first then aesthetics but Pinterest took a different approach.

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We often talk about the need for African Americans to manufacture more products. Being a lifestyle company affords you all to potentially engage a myriad of products with your own brand attached. Do you think this is something your company will pursue? Or are there other avenues of opportunity that you feel are unexplored by lifestyle companies? I love products and I love supporting small businesses. I currently have a signature product line of select items and would love to grow that business more with partners. I think there are so many opportunities and I am all about partnering to help not only myself but other brands grow.

What do you believe HBCUs can do to spur more innovation and entrepreneurship while their students are in school either as undergraduate or graduate students? I would say they can develop mentoring programs for students who want to be entrepreneurs. Like develop an alum system for entrepreneurs like myself to help current students. I also think adding it to the curriculum is an important thing. We already have the network, just need to utilize it more.

How do you deal with rejection? I have always had roles building partnerships and relationships. Most of the time you hear no. I am very used to it. Often times no is temporary and not because of you but because of other factors. I say no is just for now, not permanent so there is really no true rejection in my opinion just bad timing.

When you have down time how do you like to spend it? Antique shopping and watching historical documentaries. I am a serious history buff.

What was your most memorable HBCU memory? Having a Howard Alum find me on the first day of my internship on Capitol Hill. Howard Alum are crazy and will always find you. I do that now and I hope it makes the students feel as special as I did that day.

In leaving is there any advice you have for budding HBCUpreneurs? Take the risk and do full time if you can. If you can’t, don’t be afraid to outsource some work to keep your business growing. Just because you can’t do it full time doesn’t mean it can’t be done but you should find the resources to move forward.

 

African American Banks Reduced To 21 – North Milwaukee State Bank Closes

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The state of Wisconsin has lost one of its two African American owned banks. North Milwaukee State Bank, which was almost three times the size of Wisconsin’s other African American owned bank, Columbia Savings & Loan Association, officially had its doors shutdown on March 11, 2016. It is one of only two American bank failures in 2016 thus far.

Per the FDIC, “To protect the depositors, the FDIC entered into a purchase and assumption agreement with First-Citizens Bank & Trust Company, Raleigh, North Carolina, to assume all of the deposits of North Milwaukee State Bank.” First-Citizens Bank & Trust is controlled by a bank holding company, First Citizens Bancshares, which is publicly traded on the NASDAQ. Its primary shareholders are the Holding family and Fidelity Investments.

For the entire FDIC official release click here.

The closure takes $67.1 million in assets and $61.5 million in deposits off the books of African American owned banks as a collective.

The HBCUpreneur Corner™ – Texas Southern and Prairie View A&M University’s Johari Mills & FlowerChild’s Studio Salon

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NameJohari Mills

Alma Mater: I attended Texas Southern University for my undergraduate degree and graduate school at Prairie View. I like to claim both to piss people off, but I’m a Tiger at heart.

Business Name & Description: FlowerChild’s Studio Salon. Houston’s premier & most unique boutique coiffure salon. Flowerchild’s stylists are skilled to set the trends. It is a privatized haven for clients to feel secure, relaxed & confidently rejuvenated to conquer the world with stress free hair.

What year did you found your company? I’ve been a stylist for eighteen years and a salon owner for five years. I opened FlowerChild’s Studio Salon in 2011.

What has been the most exciting and/or fearful moment during your HBCUpreneur career? The day I decided to quit my career as an educator, along with teacher benefits and a consistent paycheck, to invest all my money and time into building and opening a salon was the scariest moment ever. I wanted to see if that movie Field of Dreams was correct: “If you build it, they will come.” So I built it – and they came. I’m grateful.

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What made you want to start your own company? Two reasons. Honestly, I was juggling a lot at the time. I just had a baby, teaching and doing hair at a salon after I left the schoolhouse. I wanted time to spend with my baby boy and I wanted to call the shots. The moment finally came where I felt I had to choose, so I figured I had to give something up and since giving up being a mother would make me a dead beat (joking-calm down), I gave up teaching. Giving up being a stylist was never an option. The other reason was because I knew there was something bigger in store for me. My mother was a teacher and it’s an honorable profession, but it wasn’t enough for me. I was raised under a spiritual system that helps practitioners follow their destiny and through divinations as a child I was told I was to be a boss and carry on the legacy of many entrepreneurs in my ancestral lineage.

Who was the most influential person/people for you during your time in college? I will narrow it down to one professor I had. Her name was Professor Oates. Forgive me because I think she became Dr. Oates, but this was a lady who saw who I was and saw what I was doing to hide who I was from others. She dropped a book down in my face one day called the Isis Papers by Francis Cress Welsing and told  me to write her a paper on it. By pen and paper, my upbringing was unleashed. I knew I was different but she made that okay for me and as she would put it, “They just gonna have to understand.”

How do you handle complex problems? I have not mastered this at all. As I mature though I notice the first thing I do is consult a close friend or my YeYe (mom) to make sure I’m not turning something simple into something complex. Often times people do that without noticing just how simple it could all be. Once deemed complex, I become introverted. I like to say I try to find resolve immediately by thought first and then action, but I’m not perfect. I like to fix things as soon as the problem arises because my grandmother made it apparent that you don’t put things off for tomorrow because tomorrow has its own set of tasks. However, depending on the matter I feel it best to consult spirit for a solution. After all, I am only a spiritual being in a physical vessel. This is key to me in all things and it proves to be beneficial to remember that when problems arise.

What is something you wish you had known prior to starting your company? How strong and capable I am. Every loss cannot be prevented. Eventually we have to experience downfall in order to know what it feels like on the upside. I know I cannot prepare for everything – there just isn’t enough preparation in the world for what is predetermined to happen. That being said, I wish I would have known that while I was worrying, crying, and sweating, that this too shall pass and I’ll land on both feet soon. I wish I had known that going in because then I believe I would have had tougher skin. Then again, those experiences, that blood, sweat and tears are what gave me a thick coat – a catch 22.

Operation Blossom, which your site talks about as a day for underprivileged young girls to experience pampering and luxury they might not otherwise have an opportunity too, seems especially near and dear to your heart. What prompted this project? How do you see it evolving in the coming years? My YeYe taught us that giving is the ultimate way to receive. I like to think I have a talent, so I plan on using my talent if nothing else to be of service to others. I really haven’t thought of where it’s going as much as I want to make sure it continues to keep going. For the foreseeable future, I just want to focus on being consistent and Que Sera, Sera (whatever will be will be).

The African-American hair care industry, especially as it relates to women, has become something of a battleground over the past few decades with African-American ownership within the industry on what has been a precipitous decline. The move toward more natural hair seems to have potentially stemmed that tide. Is there an ownership renaissance happening in African-American hair care and can the natural hair care movement take credit for it? No, because there really hasn’t been an increase in ownership. However, there has been an increase in nonprofessionals profiting off of the movement. Like anything else that’s hot and popular everyone saw a trend and saw dollar signs. Now you have more people making products, starting blogs, posting Youtube videos that have never even been active in the industry. But because the focus is on natural hair now – everyone is trying to get a piece of the pie cause they figure, “Well my hair is curly – I guess I have some experience enough to talk about it.”

Very rarely do we see African-American owned hair salons grow into multi-city chains, but with natural hair care appearing to be a trend on a continued rise across the country it seems as if the opportunity is there. Do you believe this national scale could happen or are African-American salons not interested in this type of size? I actually have never met a salon owner that says they want a chain of salons. You know why? It’s work! And I don’t mean just work. I mean work work. It’s enough to try to juggle your clients, your stylists, your stylists clients, and the upkeep of one building. To add multiple locations to that dynamic? Whew! I find the reason it’s difficult is because it’s hard to find people (managers and stylists) who are like-minded in terms of how you see the businesses’ vision and as honest as you. You get the feeling that if you want it done correctly, then you have to do it yourself and that’s challenging. Luckily, after years I have found a professional group of ladies who respect this profession just as much as I do. So most salon owners I know are proud to say they are keeping one salon a float. That’s a huge accomplishment in these times.

Outside of the obvious (money) is there anything else you believe is holding back more African-American ownership or growth in natural hair care industry? The industry is no longer professional and those who get into the industry don’t treat this industry as a serious career. Hairstylist use to be looked up to and stylist conducted business like they were CEOs of Fortune 500 companies. This generation can’t even show up to work on time, are unorganized and don’t feel like they have to work hard, which is why there is not a growth in ownership. However, “Keke” can hook you up in her kitchen sometime on Saturday, when she puts her kids to bed or she will post a how to video on Youtube for you to do it yourself.

What do you believe HBCUs can do to spur more innovation and entrepreneurship while their students are in school either as undergraduate or graduate students? I always believed schools are too caught up on books. It’s been proven that black children learn best when they can move around, touch and experience things. That’s why our boys struggle with being still in classrooms, but that’s a whole other story too. I believe every major needs a requirement to go out into the field and witness the work under an owners tutelage. The worst thing they could have done (but by design) was take learning a skill out of high schools. Classes like sewing, cooking, auto shop, and wood shop took away the chance for kids to explore and discover what they are good at. If you throw an aspiring journalist into an office from the start, they may find out it’s not for them.

How do you deal with rejection? I take it and move on. Lesson learned.

When you have down time, how do you like to spend it? What is down time? Where does that exist? Just kidding. I try to travel, I try to make efforts to dance, and I have a non-profit called JLS Events that promotes African dance and drum in Houston and surrounding areas. Lastly, I love to catch up with friends to re-energize my spirit.

What was your most memorable HBCU memory? First thing that comes to mind, non- academically, is pledging Alpha Kappa Alpha Sorority Incorporated. And taking over the line after mine.

In leaving is there any advice you have for budding HBCUpreneurs? Be true to yourself and be willing to walk your own path even when others may not understand.

XULA FCU Growing, Virginia State University FCU In Crisis, And 2016 HBCU-Based Credit Unions Overall – Stagnant

Even if I knew that tomorrow the world would go to pieces, I would still plant my apple tree. – Martin Luther

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2016’s HBCU-based credit unions are stuck in neutral. Eleven HBCU-based credit unions assets are unchanged from 2015 and still stand at $87 million. Membership saw a decline from just over 17 000 in 2015 to 16 546 in 2016. For comparison, Navy Federal Credit Union, America’s largest credit union has $73.3 billion in assets and 5.9 million members.

  1. Southern Teachers & Parents (LA) – $28.3 million ($28 million)
  2. Florida A&M University (FL) – $20.1 million ($19.6 million)
  3. Howard University Employees (DC) – $10.8 million ($11.3 million)
  4. Virginia State University (VA) – $8.6 million ($9.6 million)
  5. Prairie View (TX) – $4.8 million ($4.8 million)
  6. Savastate Teachers (GA) – $3.7 million ($3.6 million)
  7. Councill (AL) – $3.4 million ($3.4 million)
  8. Xavier University (LA) – $2.6 million ($2.4 million)
  9. Arkansas A&M College (AR) – $2.4 million ($2.3 million)
  10. Tennessee State University (TN) – $1.6 million ($1.4 million)
  11. Shaw University (NC) – $0.6 million ($0.5 million)

HBCU-based credit unions while having almost $90 million in assets are too top heavy as a collective. The top four HBCU-based credit unions have almost 80 percent of the group’s combined assets. Unfortunately, the fourth member of the group, Virginia State University Federal Credit Union, is dragging down the collective. Over the past two years VSU FCU has seen its assets decline almost 20 percent. VSU FCU is in the process of a transition in leadership after the long-term CEO Peggy Custis stepped down after a multi-decade run. In her place, Katrina Peerman, is serving as interim CEO while the board looks to make a long-term decision. That long-term decision, whether it remains Ms. Peerman or an outside choice could have a rippling effect that impacts the group as a whole. Can HBCU-based credit unions come into the 21st century? It remains to be seen whether they possess the leadership or aggressive vision required to facilitate

HBCU Money’s 2015 review and analysis of HBCU-based credit unions remain unchanged:

Unfortunately, there also seems to be no urgency by these credit unions to do the things necessary to increase their membership and assets. Students entering into HBCUs today may be more financially illiterate than a generation ago, but they have more complex financial needs thanks in large part to student loans playing such a large role into today’s higher education finance. Not to mention the reduced role that social security will play in their long-term retirement planning. An issue that should be prompting more HBCU-based credit unions to find ways to help students reduce student loan debt and start retirement planning while in college. A hard task to give this group given the limited financial products and services they offer leave HBCU-based credit unions minute opportunity to serve the needs of students, faculty, campus organizations, or even the HBCUs themselves. These limited products and services are largely an issue of lacking scale. Instead of a credit union with at least $87 million in assets, the median is $3.6 million amongst eleven with declining assets and membership. Instead of students, faculty, and institutions who travel more today than ever to conferences, tournaments, etc. being able to access their money at one of the eleven branches or through mobile app banking along the way, they are limited to just one insular branch with technology that at best reminds you of AOL dial-up. Holding onto students is even more difficult with most returning to their hometowns or nearest major city upon graduation and only returning to the campus at most once a year for homecoming. Incentive to keep banking beyond graduation? None.

Lauryn Hill has a wonderful song called the Ex-Factor that I think often describes African America institutional strategic behavior and with HBCU-based credit unions it seems no different. “It could all be so simple, but you’d rather make it hard. Loving you is like a battle and we both end up with scars.” I still believe with the right vision, an HBCU credit union could rival the Navy Federal Credit Union and give African America a place of financial safety instead of the scars we constantly end up with from predatory financial services that come into communities because we are left with such meager choices from our own financial institutions. It really all could be so simple, but more than likely we will continue to make it hard.