CHICAGO - A walk near Devon Bank's headquarters on Chicago's North Side is like taking a trip around the world.
There's an Indian grocery, a Russian deli, a Korean restaurant, and a kosher Dunkin' Donuts.
Richard A. Loundy, Devon's chairman and chief executive, is wowed by what he sees.
"I'm fascinated by it," said the bespectacled Mr. Loundy, who has pulled his red Jaguar to the curb to take in the scene. "I get a real charge out of meeting people."
Although dozens of nationalities are represented here, the North Side is Mr. Loundy's turf. He thrives on financing businesses run by people who are far different from himself. And despite language and cultural barriers, Mr. Loundy has led the $235 million-asset bank to two consecutive "outstanding" ratings for compliance with the Community Reinvestment Act.
"We need more banks like this, especially in Chicago," said Kenneth Thomas, a Miami-based CRA expert, who noted that the Windy City market has the nation's second-worst CRA performance record, behind Los Angeles.
Many urban banks have seen their markets change, but Devon Bank's is notable for its diversity.
"You've got whole groups of people on the move." Mr. Loundy said. "The thing that's unique is the many ethnic groups that are coming into one community."
When the bank opened its doors 50 years ago - six years before the Loundy family acquired it - the area was heavily German and Jewish. Since people from India began opening businesses in the neighborhood about 15 years ago, it has developed into the nation's largest Indian shopping area, Mr. Loundy said.
Other ethnic groups gaining numbers in recent years include Koreans, Assyrians, and Russians. Another part of the market has become more African-American and Hispanic. And many Orthodox Jews remain in the area.
The diversity brings opportunity to Devon and other banks in the area, but also presents challenges.
You have to be prepared to lend to people who have somewhat different ideas about how loans work, regarding loan agreements, Mr. Loundy said.
For instance, he said, a complication arose when members of an Indian group sought a loan for a community project. It was hard to get individuals to sign for the loan, Mr. Loundy said, since the group felt it would be made to the community as a whole.
Mr. Loundy said he had also learned that it's bad form to show a Korean the sole of your foot.
Marketing to such a diverse audience means advertising in foreign language and ethnic publications, such as Korean and Indian newspapers, in addition to the neighborhood paper. For many years, Devon Bank has produced calendars listing the holidays of the groups it serves. To date there are more than 160 on Devon's calendar.
And today, bank employees speak more than 30 languages, from Russian to Hindi.
But Devon has run into some problems. The bank has been hurt by souring business and real estate loans in recent years. Nonperforming loans were a steep 5.44% of gross loans last year, according to Sheshunoff Information Services.
The classified assets prompted examiners to have the bank beef up loan loss reserves, which reduced return on assets to 0.45% last year. Earnings also have been hurt by expenses related to the 1992 acquisitions of a failed thrift in Glenview and a failed bank in Deerfield, which became the bank's first branches.
Mr. Loundy hopes to have it back above 1% by the end of 1996.
He said the bank's problems have had "little or nothing to do" with its ethnic customers.
Irving Loundy, the bank's first vice president and Richard's cousin, said newer immigrants in particular want to keep their records clean.
"Many started on a shoestring and are very successful," he said. "They have a lot of pride. It's important to keep a good record."
Mr. Loundy said he hopes to open additional offices in the city or suburbs.
Mr. Loundy, who just marked his 25th anniversary at Devon and whose son came aboard two years ago, said he intends to keep the bank independent.
In fact, the family name itself has officially become a part of the area. The street by Devon has been renamed for Mason A. Loundy, Richard's late father, who spent 42 years at the bank.
He's in good, albeit diverse, company: Among others whose names adorn street signs in the area are Golda Meir and Gandhi.