For the first time in its 75-year history, Amalgamated Bank of New York is branching out of its home territory.
Amalgamated, the nation's oldest and largest union-owned bank, opened an office Tuesday in Washington. Taking advantage of federal interstate branching laws, the union-owned bank chose Washington in part because about 75% of the nation's unions are headquartered there.
"The nation's capitol is a prestigious place to be," said Gabriel P. Caprio, president and chief executive officer of $2.2 billion-asset Amalgamated. "This is a step in the right direction."
Mr. Caprio, a former Chase Manhattan executive, said Amalgamated would target unions and their members, nonprofit community groups, small businesses, and institutional investors. He added that Washington would serve as a test for branches in other cities.
Amalgamated, which operates five branches in Manhattan, Queens, and the Bronx, was founded in 1923 for garment workers who could not get credit from traditional banks. It was the first U.S. bank to offer foreign-funds transfer service to Europe; it also provided low-rate loans to the striking National Football League Players Association in the 1980s.
The bank is owned by the the Union of Needletrades, Industrial and Textile Employees, which absorbed the old Amalgamated Clothing and Textile Workers Union in June 1995.
Amalgamated is not the only union-owned bank in the country. The others are $66.6 million-asset United Labor Bank, Oakland, Calif., and $296.1 million-asset Brotherhood Bank and Trust Co., Kansas City, Mo.
Amalgamated's Washington branch is on K Street, a high-rent corridor. The New York bank is the first since 1991 to enter the District that didn't buy an established institution there.
"It is time the District got a labor bank," said Eleanor Holmes Norton, the city's representative in the House. "I wish we had more of them."
Along with planning to expand into other cities, Amalgamated is looking to beef up its trust business over the next five years. It recently acquired an 80.9% stake in Los Angeles-based First Trade Union Trust Co. and will change the name to Amalgamated Trust Co. later this year.
The bank would like to derive 50% of its net earnings from trust services, Mr. Caprio said.
In Washington, Amalgamated will go head to head with credit unions and with community banks such as Abigail Adams National Bancorp and Franklin Bancorp, which is being acquired by BB&T Corp. of Winston-Salem, N.C.
Franklin's chief executive officer, Robert Pincus, said he welcomes Amalgamated.
"If they truly want to be a community bank, competition is healthy here," said Mr. Pincus said. "I think it is a good idea and could help the quality of life if they really get involved."
