The once-towering stature of the Black bank has diminished. After almost 125 years of serving the underserved, the Black banking community has been brought to a new low by a shrinking clientele, questions of relevance, competition from big banks and the fluctuating fortunes of its traditional client base—churches, small businesses and lower- and middle-income Blacks, who have borne the brunt of the economic recession.
“The state of Black banks is bleak,” said Paul O’Connor, founder of Angkor Strategic Advisors, a Chicago-based investment firm that works with Black banks, speaking about conditions within the minority banking community in that city.
In the past few years, several Black-owned banks, including the $2 billion-asset ShoreBank, one of the most active lenders on Chicago’s South Side, Covenant Bank and Highland Community Bank have closed or been absorbed into another institution.
And the city’s statistics mirror those nationwide. The number of Black banks has been steadily dwindling since the 1960s. As of March 2011, the FDIC counted 28 Black-owned banks in the United States, down from 54 in 1994. And there are several others teetering on the brink of extinction. (New Pittsburgh Courier)