Tuesday, August 03, 2010

Comment with regards to my post about Covenant Bank

I'm very surprised at times when old posts get comments. I wrote a post about the news that the old Community Bank of Lawndale was bought out a few years ago by Covenant Bancshares and became Covenant Bank. They may have taken issue with some remarks I made in discussing it close to three years ago:
Sooo..... I'm looking for an ending, a resolution, a point/moral to the story. The author suggests that CBL did not prosper because it served a poor neighborhood. Is it the assumption, or resolution, that it is unlikely that bank under Covenant Bancshares ownership will not be able to prosper because the surrounding conditions have not changed?
You know I'm not sure there was a resolution/point/moral to this post. It was only to inform. It isn't unknown that Lawndale has been a depressed neighborhood over the years. Also I'm not certain that Covenant Bancshares either will succeed or won't succeed because of surrounding conditions.

To be sure I would be interested because I want to see another Black-owned bank succeed and certainly being in a depressed community would be an impediment. At the same time it is providing a necessary service to a community that can use it.

Also I understand certain parts of the city's west side is experiencing some growth lately. Even if it has been hampered by current economic conditions. Let's sincerely hope that Covenant Bancshares will remain in business for the day that Lawndale finally does turn around.

Let's also note that Covenant Bank also has a loan office in Forest Park, IL if you look at their locations page. Seaway Bank & Trust started off with one branch itself and now it has branched oustide of Chatham in Bronzeville, Roseland, and in north suburban Waukegan, IL. The Waukegan branch also started off as a loan office as well.

Only time will tell I suppose.

Oh yeah, this is the kind of story I wish Crain's could do. But the story of how Covenant Bancshares is faring in their home neighborhood would be one I would like to see.

2 comments:

bankalchemist said...

deja vu anyway the movie was release staring Steve Martin several years ago entitled Leap of Faith. It's actually one of those sleeper films good to rent on a bad weather day. This Sunday Rev Winston will be preaching on "Fleecing The Flock" as the Bank was failing along with quotes from "When is my Willie Slick" a definitive work from his doctorate thesis. All of this should lead to an episode on American Greed CNBC TV.

bankalchemist said...

follow up...a bad business model in changing economic times. A Bank in any community can work if its business model is adaptive to the immediate market and it adds as all others are having to do fee income. This was not a NIM (net interest margin value proposition) if you have 20,000 members of any church as in this case you bank that market by seeing they use your institution for everything financial...NOT JUST A REAL ESTATE LOAN. Many have mortgages, car notes, rental payments, debit cards, college loans, all type or merchant payments from the businesses they own or use. There is no risk in FEE INCOME. This BANK which was greatly needed by the marketplace could have survived with a different model.

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