Pointing out the window from the Northern Trust Co. branch he manages, Bertrand W. Ellis said, "See that white building over there? That used to be a bank.

"All over the inner city of Chicago, that's the case. You say, 'That used to be a bank.'"

The flagship bank of Northern Trust Corp., which caters to some of the wealthiest people in the country, is a newcomer to the inner city. But it is serious about making money there. And it is not alone.

Banks in Chicago have joined the search for ways to earn profits in blighted areas, to do well by complying with community reinvestment principles.

Northern Trust's $4.5 million, red-brick office with a tall clock tower looks out of place in the aging south-side Chicago neighborhood of Chatham. Opened last September, the branch was a result of an agreement with the Justice Department, which three years ago accused the bank of discriminating against minority mortgage applicants.

Chatham is 99% African-American, with a median household income of $24,000, according to 1990 Census data.

Mr. Ellis' challenge is making this branch of Northern Trust, which he admits is perceived as a "rich person's bank," a financial success. He is supposed to do that in five years, but he is confident it will happen "long before that."

Mr. Ellis and his competitors in other Chicago banks seem to be united on one thing: Lending in poor neighborhoods is not just charity work any longer.

"We don't make below-market-rate loans," said Frances R. Grossman, senior vice president for community affairs at BankAmerica Corp.'s Illinois unit. "If we wanted to do that, we would write a grant."

While the banks declined to release specific data, they all contended their reinvestment programs are profitable, and some indicated they are on the verge of becoming very profitable.

"We run that part of the business like any other part of the bank," said Edward J. Williams, executive vice president of community affairs at Harris Bank, the Chicago affiliate of Bank of Montreal. "We have annual target goals. This is not just a program but an important part of our business."

Another foreign-owned bank, ABN Amro subsidiary LaSalle National, has a similar attitude, said senior vice president Gary Washington.

Chicago banks may be a little more accustomed than banks elsewhere to the 20-year-old Community Reinvestment Act. Because of local community activism, the city is widely considered the cradle of the reinvestment law. Even the most ardent critics of banks say Chicago has come to represent what the law was supposed to stand for.

"Chicago is so far advanced, (activists) don't even need to file protests," said Matthew Lee, executive director of Inner City Press in New York. Mr. Lee said Chicago bankers seem to be more amenable to agreements and commitments than their counterparts in New York or California.

The banks "are not kicking and screaming any more," said Gale Cincotta, a Chicago woman who has been closely identified with CRA activism. "It's just business now."

Ms. Cincotta said it took a while for banks to get past the "you want us to make bad loans?" attitude. She believes quarterly reviews of banks' lending have helped the process.

Just before First Chicago Corp. merged with NBD Bancorp of Detroit in November 1995, it signed a six-year, $2 billion agreement with about a dozen local community groups. There were no local protests against the merger application.

First Chicago, Harris, and Northern were the first Chicago banks to make CRA agreements, in 1983. They renew at least every five years.

First Chicago has made loans in some of the poorest of the poor neighborhoods. In Grand Boulevard, for instance, where the median household income was $7,900 in 1990, it is lending on new single-family homes.

Mary Decker, senior vice president for community affairs at First Chicago, said the trick is to target certain neighborhoods and focus almost exclusively on them. For First Chicago, that means primarily three southern and western areas of the city.

"We try to pick a few things and do them well," Ms. Decker said. "You have to take it in bites and be focused."

First Chicago's commitments include a loan production office, another that it plans to open in the inner city, an equity investment in a movie theater and shopping center, and partnerships with a number of nonprofit and development groups.

In addition, Ms. Decker sits on several boards, including that of Accion, a group that promotes loans to Latino small businesses. First Chicago, the city's biggest bank, has nine branches in low- to moderate- income neighborhoods.

But opening such a branch is more complex than running a conventional office. Shelley Hoyt Anderson, president of a First Chicago branch in the south-side Woodlawn neighborhood, said the facility must do more than offer banking services. Last year, she held a private reception in the branch's community room for 17 pregnant graduating high school seniors.

Community rooms have become something of a standard for inner-city Chicago banks. Northern Trust and Harris have them too.

How does that pay off? Ms. Anderson said Woodlawn, with 1990 median household income of $13,700, is one of the busiest and fastest-growing branches in terms of new business in the First Chicago network.

Ms. Decker said opening a branch on the South Side means supporting nonprofit groups, providing community space, entering partnerships, offering education about personal and business finance, and adopting area schools for support programs.

"At first there was a sense if banks loaned money everywhere, the city's problems would be solved," Ms. Decker said. "No matter how you feel about banks, the provision of credit is not the single issue."

The concept of "adopting" a community is one that bank regulators will take into consideration when giving CRA ratings, said Malcom Bush, president of the community advocacy group Woodstock Institute.

It is part of the new regulations that went into effect for all banks July 1. While the adoption idea can earn a bank extra CRA points, it won't substitute for a lack of lending, Mr. Bush said.

He generally agreed with Ms. Decker's assessment that banks should focus on neighborhoods in which they can make the most impact, and he believes they have to be creative.

Another major change in the reinvestment law encourages regulators to take a closer look at the amount of lending to small businesses and to community projects. Equity investments in low-income neighborhoods through community development corporations are particularly encouraged.

Accordingly, these areas are likely to get more attention from community groups-especially as mortgage lending in low-income areas has picked up, Mr. Bush said. Overall mortgage volume was up 50% in Chicago from 1990 to 1994, but the loans to low- and moderate-income individuals jumped 85% during the same period, according to Woodstock.

The banks say they are looking beyond mortgage lending and identifying inner-city markets for trust, small-business, and other services.

"All of them are opening branches," Ms. Cincotta said. The difference in attitude, she said, "is like night and day."

"What we also see is competitiveness, and that's good," Ms. Cincotta said. "They want to make sure they get the numbers."

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