Newspaper Page Text
Business
‘Bank with a heart’ thrives despite early predictions of failure
%DAVE CARPENTER
Business Write
CHICAGO (AP) - Open
ing a bank aimed at improv
ing the quality of life in poor
urban areas was supposed to
be a grand notion doomed for
failure.
The demise of Shoreßank,
which promotes everything
from redevelopment to
minority businesses to envi
ronmentally responsible lend
ing, was so predictable that a
university professor came run
ning to document its begin
nings for a case study on busi
ness failure.
“Well, think about it,”
lau.gxs Mary Houghton, one
of tour co-founders of Shore-
Bank Corp. and currently its
president. “Two black guys, a
white Polish guy and a white
female going into a black
neighborhood to buy a failing
bank. I mean, we heard stories
Give yourself a mid-year financial checkup
Adanta, Ga. - If you're one
of the many people who set
Foals and madgcf?nancial reso
utions for 2007, it's time for a
reality check. With half of the
year gone, where do you
stand? According to the Geor
gia Society of CPAs, a mid
year financial review will pro
vide you with the insight you
need. Here's what to consider.
GET A GRIP ON YOUR
GOALS
Whether you're saving for a
down payment on a house, a
new car, or a college educa
tion, it’s important to monitor
your progress. If your goals
arent specific, youll fin§ it’s
difficult to judge how you're
doing. If you set a vague goal
like resolving to “save more in
the New Year,” put a more
definitive plan in place now,
for cxampfc, to save $250 a
month in a 529 College Sav
ings Plan. To improve your
chances of meeting your goal,
set up automatic transfers
from your paycheck or check
ing account to a savings or
Low Tech skills cost women and black
owned businesses S2OO billion a Year
mflmm FAISON
A Correspondent
As entrepreneurs commonly
invamua?;dmfingyolsfi
boost profits, a study
Urbanp;:fisdtutc has revealed
that many minority and female
business owners are missing out
on maximized profits because
they are behind the technology
curve.
The Urban Institute reported
that underutilizing Internet
wols is costing these businesses
S2OO billion in eamning poten
tal each year.
In rdcstponsc to the 20(?{
U.S. Department
Col Minority Business
ent Agency and
Microsoft has created a task
mwh‘fypo?:ifid\ Con
nect, a W developed
especially for women and
minority entrepreneurs. The
task force is admunistered by the
Information Technology Asso
cation of America (ITAA).
growing companies in “
in all sectors of our economy,”
about it.”
Thirty-four years later, the
stories are about its trailblaz
ing success. Shoreßank is alive
and flourishing with a global
reputation far out of propor
tion to its comparatively mod
est $2.1 billion in assets. The
nation’s first community
development and environ
mental bank has branched out
from its Chicago roots to
Cleveland, Detroit, the Pacific
Northwest and abroad, where
its consulting arm Shorebank
International Ltd. provides
loans to budding entrepre
neurs and mortgages to
homeowners in Agiag. Asia
and East Europe.
Despite its altruistic slogan
_ “Let’s change the world” _
this is no charity organization.
The Chicago-based banking
company reported net income
of $5.3 million last year even
after tending to its varied mis
sions.
investment account,
TALLY YOUR TAXES
Did you get a big refund or
owe a big chunk of money
this past April? Now is a good
time to make sure the same
thing doesn’t happen next
year. Project your taxes for
2007 and make a mid-year
correction by changing how
much is withheld lgom your
paycheck. To reduce the size
of your refund, increase the
number of allowances you
claim on your W 4 Form.
Reverse the strategy if you
owed a large sum to the IRS.
Self-employed workers can
adjust the amount they pay in
estimated taxes to meet their
projected tax bill.
BATTLE YOUR BUD
GET
If you followed through on
your resolution to better track
where your money goes, take
a look at your
spending over the last six
months to see where you
should make adjustments.
Check your household
says Reed Overfelt, general
manager of Microsofts mid-
Adantic small and medium
business division. “However,
many of these companies are
not fully utlizing technology
and are unaware of the poten
tdal impact it could have on
their business success.”
The website features business
and training courses hosted by
business experts and articles on
financial management, market
ing and advm'l‘hc free
service which in May
also gives users around the
Small Business TV provided
AT&T.
Ovwerfelt says that The Tech
nology Partnership for Small
Business Task Force hopes this
online resource will make
women and minority business
more profitable and give busi
ness owners a balanced playing
field. “Having a Web presence
and bungvfli to take advan
tage of the strength of the
worldwide Web enables me to
be able to compete with larger
corporations,” said Ginger
AUGUSTA FOCUS
But its biggest impact has
been in what it calls
community-minded invest
ing, not profitability.
“They're a bank with a
heart,” said Andres Scheolnik,
and he should know. The
Chicago architect and devel
oper saved the landmark
Grand Ballroom from the
wrecking ball thanks w 0 a
Shoreßank loan. Its subse
quent rehabilitation into a
rare architectural jewel on the
hardscrabble ~ South Side
makes it a showpiece for the
bank’s work.
Once frequented by such
stars as Cab Calloway, Dizy
Gillespie, Count Basie and
The Temprations, the 84-
year-old building was a sham
bles when Scheolnik acquired
it four years ago and began a
$3 million renovation. Today
it hosts everything from
gospel to bar mitzvahs, boast
ing the facility’s fully restored
budget as well to determine
whether you need to revise
your categories or adjust your
numbers.
REVISIT YOUR
RETIREMENT SAVINGS
PLAN
Many 401(k) retirement
plans give employees the
oFtion to chanfc their deferral
election at mid-year. If you're
not contributing the maxi
mum - or at least enough
get the full company match -
take a look at your budget and
see whether you can increase
your contribution. For exam
ple, if you recently received a
raise or expect one soon, that
moriey can be used to increase
your contribution level.
EXAMINE * YOUR
EMERGENCY FUND
Did you twp into your
emergency fund during the
first rE:cilf of the year? II? you
havent replaced the money
you spent, put a savings plan
in place today to bring your
emergency fund back to its
original level. Most CPAs sug
Johnson, owner of New York
based Ginger Luxe.
“Women-owned businesses
have a lot to offer, and I think
there’s still a stigma that we can't
do the job as well as a man. It’s
a challenge to be taken serious
ly — which is important if
youre passionate about your
work and love it”
When Johnson started market
ing her line of beauty products
she did not have a website and
took order mainly by phone.
Frustrated by limited growth,
Johnson created a website for
her New York-based business
which receives 4,000-5,000 vis
its per month and is her pri
;:2' source of marketing and
L
Faye Lone, an award-win
ning artist in Washington,
leg,whosquuiltsandsdd\
work to collectors and muse
ums, says Biz-tech Connect
en access
P 8 eo)
as my business
by just bemn;yabk to m
other people and not have w
orchestra shell and 60-foot
wooden bar, chandeliers from
the Lyric Opera and a cherry
wood floor fit for a Chicago
mayor to dance on.
“This would have been
impossible to finance any
where else,” he said. “At other
banks, they package things so
there’s no risk for the bank
whatsoever.”
Shoreßank was founded on
the ‘6os-era idealism of Ron
Grzywinski, Houghton, Mil
ton Davis and James Fletcher
(the latter two now deceased),
who together ran one of the
nation’s first minority small
business loan programs.
Intent on finding ways to
reverse the decline of inner
city Chicago neighborhoods,
they zeroed in on redlining _
banks™ then-routine denial of
credit and services to cus
tomers in poorer areas.
The four young bankers
raised SBOO,OOO in capital and
gest that you have enough
money in your emergency
fund to cover six months of
living expenses.
INVESTIGATE YOUR
INVESTMENT PLAN
Allocating your investments
across the three major asset
classes - stocks, bonds, and
cash equivalents is the key to
successful investing. Look at
your asset allocation and do a
mid-year rebalancing if
one class in your portfolio per
formed very well or very poor
ly.
FINE TUNE YOUR
FRINGE BENEFITS
Many companies hold open
enrollment sessions for bene
fis in the fall. This makes
summer a good time to start
thinking about your needs. If
the information is available
from your employer, research
and review your choices now
so you dont need to rush
through the exercise when the
enrollment window opens.
HONE IN ON THE HOL
IDAYS
rely on commercial reviews, but
get real validation from real
people and be able to trust the
information I'm getting,”
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ThegOTHERSIDE" of the Story
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R 42
obtained a $2.4 million loan
to buy the failing South Shore
National Bank in 1973, using
it as a model for their then
novel idea that private bank
capital could be used to
achieve social purposes.
Underscoring Shoreßank’s
defiance of big-bank practices,
Grzywinski _ still the chair
man today _ was the only
banker to testify in favor of
the Community Reinvest
ment Act which Congress
passed in 1977, banning
redlining,
Richard Taub, the Universi
ty of Chicago sociology pro
fessor who thought he was
chronicling Shoreßank’s fail
ure, says the bankers were
courageous for putting their
money and careers at risk and
investing years before their
experiment started paying off.
VAI the smart people said
you could not invest in the
inner city,” said Taub, author
If you don't plan ahead,
expenses associated with the
holiday season can wreak
havoc on your finances.
Come up with a holiday
budget now, and use the next
six months to save what you'll
need.
SEE A CPA
With the tax season over
Serving the
investment needs of
the community.
%" : "\if:,.,.u, i
P R~
- e g - grs
s3s S 0
L Bed
o .
Constance L. Woods
Financial Planning Specialist
Financial Consultant
Investment Management Specialist
Retirement Plan Consultant
One Tenth Street, Suite 600
Augusta Ga 30901
(706) 823-8144
www fc smithbarney comiwoods
THIS IS WHO WE ARE. THIS IS HOW WE EARN IT."
SMITH BARPEYv
© 2904 Citigrowp Gioba! Markets inc. AS rights ressrved Member SIPC —auo”l—m.‘d*
I 4 sarvics moae loy o s SRBSS 4 s 5000 2 el St B S
June 21, 2007
of “Community Capitalism”
about Shoreßank and later an
adviser to the company.
“Banks were applying to get
out of the inner city, the areas
were redlined, and here was a
small group of people who
said “We think we can buy a
bank, lend in these areas and
make money doing it.”
Aided by several dozen
institutional backers and the
popularity of its “development
deposits,” in which small con
sumers assist community
development by setting up
checking or savings accounts
or buying certificates of
deposit, Shoreßank gradually
began to make an impact.
While acknowledging
mixed results in its financial
backing of minority-owned
businesses, its impact on help
ing to rehabilitate impover
ished neighborhoods on the
Sec Bank, page 8A
and year-end tax planning a
ways off, now is a great time to
seek the help of a CPA in com
pleting your mid-year review.
The changes you make now
can make the difference in
achieving a successful 2007.
‘Financial Planning
‘Money Management
‘Estate Planning
‘IRAs and Pension Plans
‘Government Securities
‘Tax-Free Bonds
Corporate Bonds
*Stocks and Bonds
*Mutual Funds
‘Annuities
7A