A BankAmerica Corp. unit that finances housing and business ventures for minorities and the poor has in the past two years become one of the company's fastest growing and most profitable operations.

The unit, Bank of America Community Development Bank, has more than doubled its loan volume each year since operations started in 1990, to a total of $550 million in 1995. Volume through April totaled $250 million, 70% more than in the same period last year.

Since its inception, the unit has also made $325 million of equity investments in nonprofit developers of affordable housing.

The unit first went into the black in 1994, and profits have grown since then. BankAmerica puts the community development bank's profits last year at $7.5 million, and its return on equity at 19% - well above the company's overall return on equity of 14.6%, and the 14.4% average for the country's 10 biggest banks.

Posting such profits is a remarkable achievement for a unit that specializes in a type of financing that many people think of as welfare.

"We've put a lot of commitment of dollars and time and human resources into developing what today I think is a real top-notch crew," said R. Michael Mantle, president of the development bank.

When it was started, the community development bank was without precedent among the country's largest banks. Its mission was to be handle all financings for minorities and the poor involving a joint effort between the bank and a government agency or nonprofit group.

Other big banks supported such financings within their commercial lending divisions.

The community development bank's initial focus was on providing construction and long-term operating loans for multifamily housing developments - especially for people classified as very poor, with net incomes less than half as large as the median in their area.

The unit later added government-backed lending to small businesses through programs of the Small Business Administration and the Agriculture Department's Rural Housing and Community Development Service, among others, as well as investments backed by tax credits in nonprofit housing developers.

Bank of America Community Development Bank employs 250 people and has 19 offices - in the nine states where San Francisco-based BankAmerica operates plus Denver and Washington, D.C. Another office is now opening in Atlanta.

BankAmerica executives say they believe the community development bank provides more financing for government- and nonprofit-backed multifamily affordable housing than any other private company. Community groups say the bank is clearly a leader in the California market, although Wells Fargo & Co. is also a major player.

Though the unit is clearly aimed at a social need, Mr. Mantle and his boss, development bank chairman Donald A. Mullane, said they also believed from the outset that the business could be very profitable.

A key to success has been relying mostly on nonbankers to structure deals. Most of the community development bank's deal-makers are people with substantial experience in government agencies and nonprofits.

"It was easier for us to teach how to be a banker than for us to understand all the pieces of government," Mr. Mullane said.

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