October 01, 2001
ShoreBank Surpasses $1 Billion in Community Development Investment
by Mark Thomsen
Nation's oldest and largest community development bank passes milestone in serving distressed
ShoreBank has reached the $1 billion
mark in community development loans, environmental lending, and funding of a variety of locally
focused investments. Over the 28 years since its founding, Chicago-based ShoreBank has expanded to
encompass 17 branches located in five different states.
"ShoreBank is about direct
impact - lending to real people in neighborhoods that were for a long time passed over by the rest
of the commercial banking industry," said Jean Pogge, Senior Vice President of ShoreBank.
ShoreBank's beginnings date back to 1973, when founders Milton Davis, James Fletcher, Ronald
Grzywinski and Mary Houghton established a specially designed, federally regulated bank holding
company that acquired the South Shore Bank of Chicago. It was America's first community bank, and
it has been profitable every year since 1975.
In its infancy South Shore attracted
depositors often by visiting customers in their homes and talking with their neighbors. It proved,
step-by-step, that a strong, independent banking presence in the neighborhood could help get the
community back on its feet again.
With vision and a lot of hard work, South Shore Bank has
grown to become the interstate ShoreBank of today. ShoreBank now operates full-service community
development bank branches in Chicago and Detroit, providing real estate, commercial, and consumer
loans to individuals, businesses, other community organizations as well as a full line of savings
and checking accounts. Its branches in Cleveland focus on real estate and commercial loans, with an
emphasis on loans that benefit lower income neighborhoods on Cleveland's East Side.
ShoreBank has helped facilitate urban redevelopment through people like James Trice. Mr. Trice
learned the rehab business from his father, and while still in his twenties, bought and renovated
his first building in Chicago with a loan from South Shore Bank. Since then, the young
African-American has renovated seven more apartment buildings, all with loans from South Shore
ShoreBank has also expanded to the Northwest, where it has made environmental
sustainability a lending focus. ShoreBank Pacific, with headquarters in Ilwaco, Washington and a
branch in Portland, Oregon, concentrates on environmentally sustainable and community development
investments. Their services include commercial and real estate loans as well as environmental
ShoreBank's lending has seen significant growth over the last half decade.
Between 1996-2000, ShoreBank's small business lending more than doubled, increasing from $22
million to $48 million. Additionally, its real estate and consumer lending both rose about 60
percent over the same time period.
ShoreBank's real estate lending results in the
rehabilitation of 3,500 units of multi-family housing annually. The bank mentors over 100
full-time developers, many whom are considered 'mom and pop' rehabbers. They often started out
small by working part-time on one six-unit apartment house, and through hard work expanded their
business to a full-time operation overseeing a number of buildings.
ShoreBank also helps
single-home buyers, generating about $20 million a year in new mortgages. Since it does not sell
its mortgages, ShoreBank has more flexibility with lending guidelines. Many of their customers
include first-time buyers, and ShoreBank has also arranged loans with people who have been victims
of predatory lending.
To raise awareness among socially responsible investors that its
core activities center on urban development, Shorebank offers what it calls Development Deposits.
Development Deposits accounts are familiar, market-rate, federally insured bank deposits: checking
accounts, certificates of deposit (CDs), money markets, retirement (IRA) and savings accounts.
Shorebank can accommodate customers from around the country, and even offers an online account application that
can be sent by mail.
Looking toward the future, Ms. Pogge says there is still much work to
be done in rebuilding communities. This is a challenge to ShoreBank to grow its deposit base.
"One of the real keys to our success has been the support of socially responsible investors
from around the country," said Ms. Pogge. "My hope is that we can continue to grow that base to
continue to provide the loan dollars that will be needed to meet the demand that we see going