As we speak, another black-owned bank in Chicago may be slipping away. Currently, the Seaway Bank & Trust is in the final stages of a capital-rising campaign that could threaten its status as the largest black-owned bank in the Midwest. The bank has suffered $16 million in losses over the last five consecutive quarters, and its capital is below the minimum needed for a bank to be considered “adequately capitalized.”
This bank seems to be doing fine, even though the CEO, Darrell Jackson, left Seaway after only a year.
As of right now, the two options for Seaway are that they become a corporate owned bank by a larger entity or they go out of business because of the poor shape that they have been in.
It seems like Chi-Town has been losing many black-owned banks in the past few years, especially since two have failed more recently, although one bank – Illinois Service Federal which was formed during the Great Migration when blacks moved from the south to Chicago – was recently saved with $9 million from a Ghanaian-American family.
“It’s been an important institution for the South Side of Chicago,” says Saurabh Narain, CEO of the Chicago-based National Community Investment Fund, which invests in banks focused on low-income urban areas. He thinks the potential loss of black ownership isn’t as important as preserving Seaway’s activity in its neighborhoods. “Black-focused is probably as important as black-owned,” he says.
Seaway Bank and Trust is another example of how hard it is for low-income urban communities to recover from the financial crisis and recessions that have hit these communities the hardest.
Hopefully, the bank can find the money to 1) stay open and 2) stay black-owned, but at this point, its history may be more worth it to sustain than its past.
(Photo Credit: Chicago Business)