ShoreBank in Chicago has set an ambitious goal of quintupling its annual community development lending over the next six years, and it is bringing in big-bank experience to help steer it through its next phase of growth.
Its $2 billion-asset parent company, ShoreBank Corp., was expected to announce today that it has hired Joseph E. Hasten, 55, to be the president and chief executive of the unit, the nation's largest community development bank. Mr. Hasten has been an independent bank consultant for the last year and a half. Before that he had been the vice chairman of corporate banking for the $222 billion-asset U.S. Bancorp.
Ronald Grzywinski, ShoreBank Corp.'s chairman, said that as it searched for candidates to succeed Anne L. Arvia, who left last summer to run Nationwide Financial Services Inc.'s fledgling bank, it wanted someone first and foremost who was on board with the mission of making community development loans that are environmentally responsible and profitable.
ShoreBank would get significantly larger if it reached its goal of making $2 billion of loans a year by 2013, and Mr. Grzywinski said its board also wanted someone who is accustomed to running larger, more complex organizations.
"We wanted to make sure that we had a fully experienced banker as the business has become more highly competitive and more highly regulated," he said. "The whole business is becoming more sophisticated. We think there are things that other people have learned that we haven't learned yet."
Mr. Hasten started his banking career in 1975 in the commercial bank training program at American National Bank and Trust Co. of Chicago. He went to First National Bank of Chicago in 1979. Five years later he became the Midwest region manager for Standard Chartered Bank of Jersey City, and later he headed its U.S. banking operations before taking a lead role in its Korea and Indonesian banks.
In 1995 he became the president of Mercantile Bank of St. Louis and stayed on after Firstar Corp. acquired it in 2000, running its St. Louis operations and eventually rising to vice chairman. (Firstar acquired U.S. Bancorp of Minneapolis in 2001 and took its name.)
Mr. Hasten said ShoreBank is different from the businesses he has run in the past, because it is not primarily profit-driven. It was founded in 1973 to make development loans in Chicago's inner city, and even though it has grown substantially since then and moved into new markets, community development remains its prime focus.
In recent years ShoreBank also has embraced conservation. It offers discounted rates to construction borrowers for using "green" building materials and installing such things as energy-efficient windows and appliances.
"If you could make more money at ShoreBank in terms of bottom-line earnings" but had to "drift away from the missions, I think the company would sacrifice that profit," Mr. Hasten said. However, he does not think ShoreBank is sacrificing any profit; development objectives and profit motives are "joined at the hip."
He said that during the interview process he was impressed with how ShoreBank employees view community development lending as something they want to do, not something they have to do to comply with regulations or appease special-interest groups. (Mr. Grzywinski, one of ShoreBank's founders, was the only banker to testify in favor of the Community Reinvestment Act when Congress was debating it in the 1970s.)
"Everyone I have talked to in the company has a very good sense of what this mission is and why they are there and how they should contribute to it," Mr. Hasten said.
Late last year ShoreBank Corp. talked about going public to help fund its growth, but Brian Berg, a spokesman for the company, said the proposal was taken off the table at a recent board meeting.
The company is still planning a private placement this year and is seeking to raise between $25 million and $40 million from foundations, other institutions, nonprofits, and individual investors.
Mr. Hasten will assume his new duties on May 30.
Despite his cosmopolitan resume, he said he is a Chicagoan at heart. He grew up there, earned his master's degree at Northwestern University, and started his banking career there. Also, he has a son who works for Bank of America and a daughter who works for LaSalle Bank — both in Chicago.
