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(MARQUETTE, MI.)—August 25, 2003–– ShoreBank Corporation, America’s foremost community development and environmental bank, today celebrates its 30th year of investing billions into traditionally disenfranchised communities.
ShoreBank Capital (formerly known as ShoreBank BIDCO) and Northern Initiatives (NI) are ShoreBank’s Upper Peninsula affiliates. Northern Initiatives not-for-profit got its start as an academic department at Northern Michigan University in 1985. It merged with ShoreBank in 1992 at which time it also developed its relationship with the then new ShoreBank Capital, a relationship that strengthened Northern Initiatives’ ability to supplement business development information with real capital investments. Today Northern Initiatives continues to provide commercial lending services to start-ups and expanding businesses and provides research/consulting services primarily in three industry sectors including manufacturing, secondary wood processing, and nature-based tourism. While ShoreBank Capital continues to work with businesses in the Upper Peninsula, it has expanded its market area to serve the entire state. The company specializes in providing loans in manufacturing and the healthcare sectors. ShoreBank Capital provides subordinated debt/equity financing to businesses owned by ethnic minorities or businesses located in emerging communities.
ShoreBank Corporation started in August of 1973, when it purchased South Shore Bank on Chicago’s South Side to demonstrate that federally insured banks could be effective catalysts for positive community change.
The prior bank owners had intended to move the institution to downtown Chicago, based on their perceptions––shared by most banks at the time––that business opportunities were declining as African American families moved into the neighborhood. Neighborhood residents protested the intended move and, for the first time in U.S. banking history, federal regulators denied an application to relocate a bank for reasons of changing neighborhood demographics.
The owners put the bank up for sale, and ShoreBank’s founders Milton Davis, James Fletcher, Ronald Grzywinski, and Mary Houghton raised capital, incorporated, and purchased the bank.
“Using a bank as an instrument for positive community change was a very radical idea in those days, but it is a model that we have duplicated numerous times over the past 30 years. We have proven that by investing in people and communities traditionally ignored by financial institutions, we have been able to help create economic equity, and build strong communities,“ explains Ron Grzywinski, Chairman of ShoreBank Corporation.
Today, 30 years later, ShoreBank Corporation is a bank holding company with $1.4 billion in assets and bank locations and affiliated non-profits in Chicago, Detroit, Cleveland, Ilwaco, Washington, and Portland, Oregon. Additionally, it provides business development services in Michigan’s Upper Peninsula and consulting services around the world.
In the 1990s, ShoreBank became the first bank in the United States to also adopt an environmental mission, and has made over $111 million in conservation loans in the last three years alone. Just recently, it launched ShoreCap International, a $25 million company that will invest capital in and advise local regulated financial institutions that make small and microbusiness loans in developing and transitional economies in Asia, Africa, and Central and Eastern Europe.
ShoreBank is committed to revitalizing communities and creating healthier environments by making loans to acquire and renovate apartment buildings and single-family homes, and by providing financial and information services to businesses, non-profit organizations, and faith-based institutions, especially to those who want to reduce their environmental impact. By focusing its lending and information services in designated communities, the bank works in partnership with individuals and organizations to build stronger communities.
A “triple bottom line” success story
Despite the challenging national economy over the past year, ShoreBank’s net income in 2002 soared to $6.7 million, more than twice the previous years’ earnings. In fact, its largest bank (the original South Shore Bank) had the 17th highest return on equity of all the United States’ banks with assets greater than $1 billion.
But as a triple bottom line company, ShoreBank evaluates its performance not only on earnings, but also on investments it makes to revitalize communities and create a healthier environment. ShoreBank has proven its ability to achieve financial and social bottom line objectives. In the United States, it has invested $1.46 billion in underserved communities, contributed to the rehabilitation of more than 38,000 units of affordable housing, and has invested $305 million in small businesses. In 2002 alone, it invested $207 million in its priority communities.
In the area of environmental banking, ShoreBank supports businesses interested in minimizing their environmental impact, such as companies working to remove toxic waste from abandoned commercial properties, manufacture products made from recycled materials, adopt practices to reduce energy consumption or use of toxic chemicals, or to substantially renovate existing structures. In 2002, ShoreBank made $56 million in “conservation loans.”
Internationally, ShoreBank Advisory Services has overseen $203 million of lending to small enterprises by 45 banks in nine emerging market countries and has helped more than 20 microfinance institutions increase their capacity.
“From the South Side of Chicago across the ocean to Romania, we’ve proven that investing in people and their communities brings tremendous financial and social returns,” said Mary Houghton, President of ShoreBank Corporation.
About the company:
ShoreBank is America’s first and leading community development and environmental banking corporation. It is committed to building vibrant communities by providing financial services and information to create economic equity and a healthy environment. Headquartered in Chicago, ShoreBank has banks and affiliated nonprofits in Chicago; Cleveland; Detroit; Ilwaco, Washington; and Portland, Oregon; business development services in Michigan’s Upper Peninsula, and consulting services around the world. For more information, visit www.shorebank-online.com..
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