Seaway National Bank of Chicago, the country's largest black-owned bank, has taken up a position uncommon among community banks - loan syndicator for some of the biggest companies in America.
Since last fall, the bank has led a group of 75 minority- and women- owned banks that has opened credit facility relationships totaling $205 million with six giant corporations.
The biggest commitment - $65 million to GE Capital Services - is the largest ever by a consortium of minority-owned banks, said Emma Taylor, Seaway's senior vice president and director of marketing and business development.
The banks' goal is to funnel revenues from the credit relationships into their community lending efforts, Seaway officials said.
"This allows us to do more in our neighborhoods," Ms. Taylor said.
Seaway, with assets of $253.7 million , has led consortiums for a decade, said chief executive Walter Grady. The bank's biggest prior deal involved about 40 institutions and $40 million.
"Minority banks have been putting together consortiums for years," Mr. Grady said. "No one minority-owned bank could obligate itself to $40 million, $50 million, $60 million loans, so it comes out of necessity."
Seaway stepped up its efforts last year after hiring Ms. Taylor.
She helped to set up minority bank lending consortiums for Indecorp Inc. in Chicago, which was acquired by Shorebank Corp. in December. Ms. Taylor had been involved with minority-owned banks for 10 years.
"We decided we would go out after some of the national companies," Mr. Grady said. "She's done an excellent job of that."
Besides the GE deal, the consortium established relationships from last fall through this July with Colgate-Palmolive, for $30 million; McDonald's Corp., $25 million; Philip Morris Companies, $25 million; Sara Lee Corp., $20 million; and Sears, Roebuck and Co., $40 million.
"That's good business development," Mr. Grady said.
Ms. Taylor had managed relationships with the six corporations during her stint at Indecorp.
"These are companies that actually have made sure they can find a way to do business with minority-owned banks," Ms. Taylor said. "There are too many companies out there that don't do business with minority banks."
Not all the banks were in on every deal, Mr. Grady said. Some companies requested specific amounts from certain banks.
Los Angeles National Bank had participated in loans to Sears for several years when Indecorp led the syndication effort. Henry Chen, chief executive of $115 million-asset Los Angeles bank, said the arrangement was good business and that he would look for other deals.
"It depends on the company," he said. 'If any participation comes to us we will look at the package."
Commonwealth National Bank, a $20 million-asset institution in inner- city Mobile, Ala., has participated in credit facilities since the 1980s. Bank president Al Johnson said the relatively risk-free earnings are a boon.
"It assists our earnings so we can provide our community with a wider range of services," he said.
Ms. Taylor said the size of the commitments augurs well for minority-owned businesses seeking corporate relationships.
Syndicated credits "were running like $5 million going back to 1985," Ms. Taylor said. "Now we're becoming significant players in the market."