Boston-based OneUnited Bank is building a new branch office in the Grove Hall section of Dorchester. The bank already operates a branch (pictured above) in the city’s Roxbury neighborhood.
Over the years, Boston-based OneUnited Bank has created its branch network mostly by acquiring institutions in Boston, Florida and California. As it begins construction on its newest branch, OneUnited is partnering with the city of Boston for several initiatives. Although supporting its local base, the bank also has plans to expand nationally.
OneUnited Bank, which has its headquarters at 133 Federal St. in downtown Boston and is the first interstate and largest black-owned and -managed bank in the country, last month announced that it is building a branch in the Grove Hall section of Dorchester and has recently begun construction on the facility. OneUnited has signed a lease with Long Bay Management to open the branch in the long-vacant Silva Building at the corner of Warren Street and Blue Hill Avenue. The bank will provide $4 million in financing to Long Bay to redevelop the building, which originally was built in 1898.
“The location at Grove Hall is significant,” said Robert Patrick Cooper, senior counsel at OneUnited.
Cooper said the branch location is in a major quarter of Blue Hill Avenue, which has “fantastic” visibility. Bank officials said they spent a considerable amount of time analyzing the best locations for a new branch.
“There are central nodes in an urban quarter,” Cooper said, referring to places like Roxbury, Grove Hall and Mattapan.
Grove Hall also is familiar to the bank because it has financed projects in the area, such as a nearby mosque.
The Grove Hall area of Dorchester has been a focus for not only the bank, but the city of Boston, as well. In 1993, Mayor Thomas Menino launched the Blue Hill Avenue Initiative. Since then, the city and its Department of Neighborhood Development have worked closely with the Blue Hill Avenue Initiative Task Force to revitalize the area by encouraging housing and commercial development. The effort has brought in an estimated $100 million in public and private investment to Grove Hall and the Blue Hill Avenue corridor.
The branch currently is under construction and is expected to open in the second or third quarter of 2006. The location will be a full-service branch offering online banking, an affordable home mortgage program and community-based financial literacy workshops.
“This branch and the entire mission of the bank is to harness spending power of African-Americans,” said Cooper.
The bank began almost 50 years ago with Unity Bank & Trust in Boston. According to the bank’s Web site, OneUnited Bank was created by combining black-owned banks across the country with the same mission – Founders National Bank of Commerce and Family Savings Bank in Los Angeles, Peoples National Bank of Commerce in Miami and Boston Bank of Commerce. OneUnited said it will continue to expand its branch network by acquiring financial services companies that “share its mission” and opening de novo branches and ATM locations in urban communities.
National Interest
With its Grove Hall branch, the institution hopes to address issues such as wealth creation and savings.
“Savings for college education [and] rainy day [savings] are critically important,” said Cooper.
Financial literacy workshops will be hosted at the bank, where issues such as budgeting, credit awareness and home buying will be discussed.
“There is power behind owning one’s home,” Cooper said.
The bank’s goal is to build up the communities where its branches are located and give people an opportunity to have a vested interest in their neighborhood.
Another workshop, “In Trouble,” will identify behavior that can lead to financial struggles and ways to avoid fiscal pitfalls.
“We are really excited about the financial education and literacy aspect and then the application,” said Cooper.
As the bank prepares to open a new branch in Boston and introduce several workshops to the local community, OneUnited also is contemplating a larger initiative – a plan to expand into other urban communities across the nation.
“We are looking at other urban markets,” Cooper said. The national expansion plan does not mean OneUnited will be standing pat in its existing markets, however. Cooper said the bank also plans to identify more potential branch locations in Boston, Los Angeles and Miami areas.
Cooper noted that Roxbury shares some of the same issues as communities in southern Florida, such as economic stagnation and high unemployment.
The bank’s executives hope to offer financial products and advice to other urban areas of the country by expanding, Cooper said.
“There is the notion to garner spending power of African-Americans,” he said.
While there may already be banks in these communities, Cooper said some consumers are likely underserved because the some community banks lack the necessary resources to offer some of the targeted products that OneUnited does.
Cooper said bank leaders feel that certain acquisitions of smaller banks by OneUnited might better serve the black community.
“By combining these institutions [OneUnited and a community bank], we’re both able to increase capital into all the communities,” Cooper said.
There are banks that “look like OneUnited” in places like Washington, D.C., Chicago and Atlanta, Cooper said.
“We believe by combining these institutions, you make all these communities stronger,” he said.
Creating Unity
While the banking industry has been active over the last few years with expansion and mergers, OneUnited has kept a relatively low profile. In 2002, however, OneUnited acquired Family Savings Bank, a thrift institution in Los Angeles. Cooper said over the last three years, OneUnited has spent time integrating the two banks into one and bringing some of the expertise from the California bank to Boston and Miami.
Back in the Hub, OneUnited has partnered with Boston’s Department of Neighborhood Development to create an affordable homeownership program. The program will include financial literacy training and mortgage programs targeted to first-time homebuyers and current homeowners.
Unity Advantage is a loan program designed for first-time buyers and offers low or no down payments for those in the low- to moderate-income bracket.
“This is a product existing bank customers and those who live close to OneUnited will really [find useful],” Cooper said.
Unity Smart is geared toward borrowers with less-than-perfect credit and Unity One is intended for prime borrowers with loan amounts up to $4 million.
“We are trying to cover the spectrum of homebuyers,” Cooper said.
The bank is working with the city of Boston to roll these loan programs out and Cooper said he expects it will help the bank gain some more visibility.
OneUnited also has embarked on a new ad campaign with celebrities such as singer Patti LaBelle endorsing the institution.
Stanley Ragalevsky, attorney at the Boston-based law firm Kirkpatrick &Lockhart Nicholson Graham, said the bank’s ability to publicize its name and product offerings will be crucial to its success.
“Their success will depend on their marketing effort,” said Ragalevsky.
Calling OneUnited a “solid operation,” Ragalevsky said the Grove Hall branch is likely a good move for the bank.
“They would do an analysis consistent with the usual factors banks look at [when identifying a branch location],” Ragalevsky said.
He said the bank would review the likelihood of households that could provide core deposits, for example. “There is a greater opportunity for profitability [in areas where many depositors are likely]” he said.
Most banks, Ragalevsky said, want to break even three years after building a branch, which generally means having $15 million in deposits.
