BRONZEVILLE — City Treasurer Kurt Summers announced Monday morning he was depositing $20 million of the city’s funds in Illinois Service Federal Savings and Loan, breathing new life into the last black-owned bank in the city.
Summers reportedly has been working on the deal for over a year to invest city funds into the community bank headquartered at 4619 S. Martin Luther King Drive, which looked headed toward closure and the same fate as the city’s other black-owned banks two years ago.
“Community banks are designed with the purpose of investing and reinvesting in their community,” Summers said at a Monday morning news conference. “Community banks are more capable of evaluating the risks in their communities.”
The investment brings the bank's holdings up to $130 million, according to the bank President Bob Klamp and allows it to invest more in commercial ventures.
The bank traditionally has been a mortgage lender, with 70 percent of its loans going for first-time residential mortgages, Klamp said. The new investment allows the bank to lend more to businesses in Bronzeville and Chatham, where the bank has its only branch.
He said the bank intends to focus on those two communities and will consider adding a location in one to three years.
Phillip Beckham III of Mid-South Business Association and Resource Center, who advises South Side businesses that are trying to get loans to expand or get a foothold, said the demand is there in the community for business loans.
“I think their base is going to be small business startups,” Beckham said. “They need capital.”
He said he was excited to see the bank in a stronger position in the community.
“My grandfather banked here in the '50s,” Beckham said. “For me, it’s great to see it still here and getting stronger.”
The bank has struggled in recent years, but last year the Nduom family, owners of the Groupe Nduom businesses in Ghana, invested $9 million and promised an overhaul of the bank.
Illinois Service in the last year has invested in technical upgrades to allow customers to bank online and begun to reorganize its portfolio.
The $20 million the city invested Monday comes from a pool of more than $400 million that is held by national banks on a rotating basis, Summers said.