Months of work paid off when Albina Community Bank, the first community development bank in the West, opened its doors last week in Portland, Ore.
Shortly before it opened, Albina, serving the low- and moderate-income communities of Portland and North Portland, completed a yearlong drive to raise $4.75 million in capital
The money came from 77 investors, including 56 from the Portland area. Some big investors were Fannie Mae and athletic-shoe company Nike, which is based in nearby Beaverton.
"The reception we've gotten has exceeded all expectations," said Leon C. Smith, president and chief executive officer of Albina. "Almost everyone who originally pledged us money ended up investing."
Mr. Smith said Albina, based in North Portland, should play a key role in the Portland area.
"I think this bank is extremely important," Mr. Smith said. "We will focus primarily on lending to the low- and middle-income population in the community. Given Portland's overall buoyant economy, we think we have a wonderful opportunity to, by focusing on that population, benefit everyone.
Cecil R. Monroe, administrator of Oregon's Division of Finance and Corporate Securities, said Albina will be welcome in Portland.
"I think there's always a need for somebody who's going to go in with the focus on trying to provide credit for worthy endeavors in communities that might have been left behind," Mr. Monroe said. "They're definitely filling a niche, but how they'll do will depend on how well their operation is run."
Albina, which will start with 14 employees, will specifically serve northeast Portland, where 70% of the city's black population resides. With an eye on revitalizing a struggling area, the bank will follow the examples of such community development institutions as South Shore Bank of Chicago; Community Capital Bank, in Brooklyn, N.Y.; and Elk Horn Bank and Trust Co., of Arkadelphia, Ark.
Albina's roots can be traced to a rate dispute filed against Portland utility Pacificorp. Charges that Pacificorp had overcharged Northern Portland residents to recoup the costs of a nuclear power plant resulted in a 1991 settlement in which the utility agreed to pay $1.7 million that would serve as seed money for an institution dedicated to low- and middle- income neighborhoods.
Mr. Smith, a former executive of First National Bank of Chicago, said Albina got no financial support from existing local banks in its funding drive, but he conceded that he didn't ask for any. South Shore, for instance, got the lion's share of its capital from such large institutions as BankAmerica.
Mr. Smith cited lack of familiarity with the community development bank concept in the local banking community and fear of competition as possible factors.
Two other community development banks are slated to open in the West soon. Community Bank of the Bay, in Oakland, Calif., has commitments to cover more than half its $6 million capitalization requirement and expects to begin operating by March.
Neighborhood Development Bank, San Diego, has its eye on a second- quarter opening date and is also raising its capitalization.
