Minority bank efforts to get financing from majority-owned banks

Minority bank efforts to get financing from majority-owned banks

Summary of an article appearing in the The Wall Street Journal. Wednesday, December 16, 1992.

Wednesday, December 16, 1992. Page C2. Copyright, 1992 by Dow Jones & Company. Posted for research purposes only. Article by JOHN R. EMSHWILLER, Staff Reporter of THE WALL STREET JOURNAL - LOS ANGELES

The article discusses minority banks and their efforts to get financing from majority-owned banks. One bank, Founders National, a $72 million dollar, Black owned bank in Los Angeles, approached BankAmerica Corp. seeking financing. The larger, majority-owned bank responded positively, if shallowly.

The article cites Creative Investment Research. We noted an increase in interest. The number of phone calls we received from majority owned banks seeking information on minority banks dramatically increased in 1992. But most of these information requests did not lead to minority bank investments.

The article points out that minority-owned banks around the county have been the beneficiaries of a new type of assistance.This assistance comes in the form of investments from majority-owned banks.

The dark side of this assistance is that many investing banks saw it as a form of welfare. One New Jersey bank with $33 billion in assets, First Fidelity, bought about $200,000 in stock from a Black-owned bank, City National Bank, and gave the stock away to charities.