Ask George Havelka about his concerns for the Cole Taylor Bank in Woodlawn and he lists only one.
“It’s the size of the building,” says the banker. “It’s getting too small.”
It’s a pleasant surprise for Havelka, who admits that when Cole Taylor opened the South Side neighborhood’s first bank office in 20 years in May 1993, officials were not entirely sure what to expect.
“We just didn’t know what is out there-7,000, 8,000 bank customers,” says Havelka, a senior vice president with the Wheeling-based company.
Today Havelka and Woodlawn branch manager Carolyn Blackwell tick off a string of statistics to indicate how business is growing at the compact branch at 824 E. 63rd St.
The bank opened 1,170 checking accounts, 924 savings accounts and 61 time deposit accounts by April 30. Tellers in the postage-stamp-size space are handling 10,000 transactions a month, up from 7,000 in January. And the lone automatic teller machine recorded 6,700 transactions in April, making it one of the three busiest in the Cole Taylor ATM network.
A few blocks away, Shelley Anderson, president of First Chicago’s new branch at 6650 S. Stony Island Ave., tells a similar tale.
Anderson and a small staff worked in a temporary, limited-service office from June 1993 until last week, when they moved next door for the official opening of First Chicago’s $5 million branch, the first bank built in Woodlawn in several decades.
During the months in the temporary facility, which had no teller service, the First Chicago bankers opened 700 savings accounts and more than 600 checking accounts, most from five South Side neighborhoods, including Woodlawn.
The ATM machine in the limited-service space averaged 125 transactions a day, a figure that is expected to be dwarfed after last week’s opening of eight drive-through ATMs in the new permanent branch.
The numbers, while encouraging, are only a start. It takes two to three years for the average bank branch to break even, and operating in Woodlawn offers special challenges.
Once a solid working-class community, Woodlawn slid into urban devastation in the 1960s. As the neighborhood changed racially, many middle-class residents fled, robbing it of needed resources. Financial institutions left in the exodus.
In 1960 Woodlawn had 60,000 inhabitants. Today it has half that number, and more than a third have family income below the poverty line. The neighborhood has acres of vacant land, the result of 30 years of abandonment and demolition.
This open space is a critical element in the latest campaign to rejuvenate the area. Working under an umbrella organization called The Fund for Community Redevelopment and Revitalization, public and private groups aim to build or rehabilitate several thousand housing units over the next 10 to 20 years to lure middle-class residents back to Woodlawn and the similarly blighted North Kenwood-Oakland neighborhood.
Attracting a bank office has been a key community goal for years, and recently it coincided with a growing interest by local banks.
Prodded by increasing federal scrutiny of how well they are serving low- and moderate-income communities and pressed by intense local competition to grab as many customers as possible, Chicago bankers are venturing where they have not been before.
Summit-based Argo Federal Savings Bank is opening a branch near Chicago Stadium on the West Side. Harris Trust and Savings Bank has announced it intends to open 8 of 24 new branches in low- and moderate-income areas, and Northern Trust Co. hopes to open a branch on the South or West Side by year-end.
Skeptics point out there is no guarantee of success either for the banks or the communities. Some contend that requiring banks to put operations in low-income areas imposes an added cost of business with little hope of profit.
“Putting a transactional branch, other than a new building in a neighborhood, is not necessarily going to help development,” insists one banking expert. “You still have to look for credit-worthiness in customers.”
Community activists counter that there are good customers in Woodlawn and other credit-starved areas. The deposits and loans may be smaller, and it may take more of them to make a branch efficient and profitable, but banks can make money if they work for it, they contend.
“We not only survived, but we prospered,” insists George Kyros, proprietor of Daley’s Restaurant in Woodlawn, to debunk the view that this neighborhood has no money and no future.
If Kyros is right, Woodlawn and other ignored neighborhoods could be Chicago banking’s next business opportunity. Already slugging it out in the region’s most prosperous communities, there is much less competition in low- and moderate-income areas. With many residents of such neighborhoods with little or no bank association, the institution finding the right formula could win customers and profits.
Bolstered by deposits from the Illinois Treasurer’s Office and using a community-bank approach, Cole Taylor has worked to win customers in Woodlawn through one-on-one contact, educational seminars and word-of-mouth recommendations.
Branch manager Blackwell wins plaudits from 20th Ward Ald. Arenda Troutman, among others, for reaching out to residents.
“We’re a bank and we want to do loans,” says Havelka, although Cole Taylor by May 1 had made only three mortgages at the branch, with six more in the pipeline.
“The developers are just beginning,” he says. “There hasn’t been an abundance of housing to sell mortgages for.” The community is still “pretty empty,” he notes. It will take time before there is an influx of new residents and the businesses that follow.
“We are convinced it’s going to happen,” he says.
If Cole Taylor competes with the homeyness of a neighborhood shop, Chicago’s biggest bank brings the clout of a financial department store.
Though located in Woodlawn, the modernistic new glass-and-steel building near Stony Island and 67th Street is planned as a hub for five neighborhoods-Woodlawn, Kenwood, Hyde Park, South Shore and Grand Crossing.
When First Chicago decided to put a bank in what is euphemistically called an “underserved” area, it zeroed in on the Southeast Side because of a concentration of current bank customers as well as “several low-income pockets,” says Charles Shoemaker, First Chicago senior vice president and head of its community-banks department.
“The decision was made to find a location to draw from as diverse an area as possible,” he explains.
Working from the limited-service office, Anderson’s staff made $1 million in consumer loans and $9 million in home-mortgage loans.
Although “we’ve made very limited business loans,” says Anderson, the bank expects more activity now that the permanent branch is open.
