The Sixth Ward: From ISF to GN Bank - name change

I posted this yesterday to The Sixth Ward. The Illinois Service Federal branch on 87th & King Drive you could say is technically in Chicago's 9th Ward. And if you patronize this location soon it will have a new name!

From ISF to GN Bank - name change https://t.co/RRqfHuiPFg

— The Sixth Ward (@TheSixthWard) July 25, 2018

Seaway Bank Farmer's Market Aug. 2nd to Sept. 20th, 2017

Seaway Bank as a division of Self-Help FCU is hosting a farmer's market every Wednesday from Aug. 2 to Sept. 20, 2017 from 9 AM to 2 PM. at the main branch located at 645 E. 87th Street. Refer to flyer below for more details or click this link for a printable flyer.

Crain's: Seaway Bank buyer rolls dice on African-American acceptance

Seaway Bank which has a branch located near 111th/Michigan failed on January 27, 2017. The assets of the bank were purchased by the Indian-American owned State Bank of Texas. Most of anything written about this shocking development was posted to sixthward.us. The below post is crossposted to sixthward.us!

www.seawaybank.us

It's almost been two weeks since the formerly Black-owned Seaway Bank was purchased by the Dallas, TX based State Bank of Texas which is owned by an Indian-American family. We already know that the Seaway name will be retained primarily in an effort to maintain some of the predominantly Black customers.

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.

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."

We learn for the first time one of the other bidders of Seaway:

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.

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.

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.

In recognition that this is a business we're talking about my hope is that in the next few years State Bank could possibly set up Seaway for a sale to a Black-ownership group. This is their business for now as you see in the screencap above so it's ultimately up to them whether or not they want to eventually sell.

In the meanwhile, we see that in this article Illinois Service Federal is setting themselves up as the only locally Black-owned bank here in Chicago. Also we see in this article actions taken by the community whenever a Black-owned financial institution is taken over by someone outside of the community - for example the former Community Bank of Lawndale.

What many of us should be concerned about particularly customers are the status of the many jobs that could be at stake during the course of this transition. State Bank doesn't have as many branches as Seaway so it's possible there will be some layoffs.

I suggest you read the whole thing.

Should there be links for local businesses here?

I had this idea for this blog. While it's not exactly heavily trafficked, it just hits me that this blog could be as much a neighborhood blog as it is for the school that partially made me who I am. So the idea here is whether or not neighborhood businesses should have links on this blog.

I could include many nearby businesses on this blog. I could include two local banks with a neighborhood presence mainly Seaway Bank & Trust and Urban Partnership Bank (they have a branch in the Pullman Walmart store). Over the years I have shared events that involve Seaway Bank especially with their Kidsfest program held every July. Also should I limit links only to neighborhood banks why not include such major banks as Chase or US Bank who also have branches in the area?

Also, is it OK to include the Chatham 14 Theaters - soon to become a Studio Movie Grill in the near future in the links? It would be included because it's the only movie theaters located nearby in the city. Over the years many events that go on there have been posted here even when they were under the black-owned ICE Theaters chain.

Walmart recently opened in the nearby Pullman neighborhood is a national retail chain and therefore the question is should a national chain be included? If Walmart is listed, then why not Walgreen's or Target (another business located much further north in Chatham and is the only store nearby in the city). Of course there are several Walgreen's located nearby the neighborhoods where Bennett/Shedd are located.

BTW, I almost forgot the add that Target did a makeover in the library of a neighborhood school in Chatham back in October 2012.

Of course the possibilities are endless as to what businesses with a internet presence should have links here. The next question to ask is what do I hope to accomplish by compiling such a listing here?

2012 Seaway Bank Kidsfest

 

It's coming this Saturday at the main branch of Seaway Bank & Trust located at 645 E. 87th Street. Refer to the flyer above. Expect special appearances from Elmo and Big Bird during the course of the day. Also there will be book bags, food, school supplies and prizes available while supplies last. Admissions & activities are open to the public and free. Also attendees will have the opportunity to open a Young Savers account for children with only a $5 deposit.

Most of the information is provided by a press release from Seaway Bank's marketing department.