Academic journal article ABA Banking Journal

Three Chicago Banks Invest in Clinton's Favorite Bank

Academic journal article ABA Banking Journal

Three Chicago Banks Invest in Clinton's Favorite Bank

Article excerpt

South Shore Bank, Chicago, has been cited by President Clinton as an example of a community development bank. In 1992, the $250 million-assets bank made nearly $30 million in loans to rehabilitate 99 apartment buildings and to finance 37 small businesses in low-income neighborhoods.

In March, Shorebank Corp., South Shore's parent, had a private placement that was placed with Chicago businesses. The three biggest investors, as of early April, were Continental Bank, First National Bank of Chicago, and First Chicago's affiliate American National Corp. The three banks' holding companies, Continental Bank Corp. and First Chicago Corp., bought a combined total of $4.5 million in non-voting common shares on their behalf, $2.5 million for Continental Bank, $1.5 million for First National Bank of Chicago, and $500,000 for American National. Goldman Sachs assisted the transaction.

The funds will be used by Shorebank to extend its neighborhood renewal program to several additional Chicago neighborhoods. "Equity participation by Continental, First Chicago, and American is extraordinarily valuable to Shorebank," says Chairman Ronald Grzywinski. "These investments give us the capacity to extend our lending and development activities. They also represent the beginning of a new type of long-term relationship with financial institutions willing to commit their resources and expertise to rebuilding valuable but neglected parts of the city. …

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