Banker

Earlier this month, Eastern Bank grabbed headlines for opening its first branch in Roxbury, which also happens to be the neighborhood’s first new bank branch in about two decades.

Only the sixth branch in Roxbury, Eastern’s CEO Bob Rivers has made it clear that the move is part of the bank’s core mission – putting up branches in areas that have less access to banking.

But Rivers also said he thinks the move is a smart one from a business perspective.

“We are opening branches in places where our competition is not,” Rivers told Banker & Tradesman. “It’s clearly an ascending community, so we think it’s going to be an increasingly attractive market to be in.”

While the move to Roxbury is a long-term play, Rivers is bullish on the new branch; it’s a tactic the bank has used before in Chelsea. When the bank set up shop, Chelsea hadn’t seen a branch in about 20 years either but, similar to the current situation in Roxbury, Eastern had a lot of established connections within the community. The Chelsea branch ended up doing well enough that the bank decided to open a second branch in the area.

“The strategy is we don’t enter a market that we don’t know,” said Rivers. “We are located right across from the T (Roxbury Crossing) in a high-visibility and high-traffic area. It’s a strong commercial district and a growing residential area.”

The Roxbury Economy

While it hasn’t flourished in the same way that other parts of Boston have, Roxbury has made gains amid a healthy economic climate.

The median sale price of a single-family home in Roxbury in 2013 was $237,000, according to analysis from The Warren Group, publisher of Banker & Tradesman. The median was just over $400,000 in 2015, then rose to over $470,000 in 2016 before dropping down to $435,000 last year.

“The community is striving, albeit the overall unemployment rate still remains a challenge,” said Alan Gentle, director of the Roxbury Center for Financial Empowerment. “It’s a thriving business district.”

Developers have moved on formerly vacant parcels in Dudley Square in recent years.

The Bruce C. Bolling municipal building was completed in 2015, bringing a neighborhood innovation lab and retail space. Construction began last year on the Melnea Hotel and Residences, a $38 million project that will be a 108-room Marriot hotel, a 50-unit residential rental apartment and 8,000 square feet of retail.

And across from the Bruce C. Bolling Municipal Building, there is a proposal to construct a 25-story tower featuring 236 residences and over 28,000 square feet of commercial space.

Roxbury could do a lot worse, said Mimi Turchinetz, assistant deputy director of Boston’s OFE; 10 percent of households in Boston are unbanked and 20 percent underbanked, she said. But the Roxbury, Dorchester and East Boston neighborhoods have 57 percent of the city’s check-cashing locations and only 12 percent of the city’s commercial bank branches.

“The numbers are challenging,” she said. “But I think Boston is not too bad compared to other parts of the country.”

Boston Mayor Martin Walsh and the rest of the city are also committed to improving the banking scene in Roxbury. The city has launched initiatives such as Bank On Boston, aimed at connecting Boston residents with reliable financial products and services, and Boston Builds Credit, a pilot program launched in Roxbury in 2017 that provides free workshops at neighborhood locations to help residents learn the rules of credit building. The overall goal of the program is to help at least 25,000 Boston residents get a credit score of at least 660 out of 850 by the year 2025.

The Roxbury OFE has also recently partnered with the Dorchester Bay Economic Development Corporation to offer financial assistance and guidance to existing business owners, and seed money to local entrepreneurs.

A Fine Line

Turchinetz and Gentle are glad to see Eastern coming into the area, but concerned that economic strength and gentrification may force out residents who have lived in the neighborhood for decades.

That battle can be seen in recent statistics.

The average asking price in Roxbury was $351 per square foot as of April 2018, according to NeighborhoodX. Demonstrating the variety in the market, the range includes houses for $119 per square foot to two-bedroom condos for close to $1,100 per square foot (over $1.2 million asking price).

While housing prices have ticked up, income has not. The median household income in Roxbury in 2015 was $25,937, compared to $55,777 in Boston overall.

Total deposits at the two Santander branches, one Bank of America branch and one Citizens Bank branch in Roxbury are just over $100 million, according to the FDIC, but only increased by a little over $2 million between 2014 and 2017.

“The biggest challenge is displacement and gentrification,” said Turchinetz. “As the economy heats up, incomes can’t stay ahead of property values.”

Still, both Turchinetz and Gentle think the emergence of banks such as Eastern can only help ween residents off check cashing companies, especially if the banks can offer innovative retail products that members of the community can take advantage of.

Rivers said Eastern plans to push financial literacy outreach, work with consumers, small businesses and scale minority businesses with the bank’s business equity initiative. This potential leads Gentle to think that other financial institutions are not far off.

“I am very hopeful that yes, we will see another branch in a lot less time,” he said. “The growth of credit unions presents another opportunity and hopefully in the short term, they may be the next kid on the block.”