Urban Trust Bank’s Foster Scotland, Gibsonton branch manager, tells Wal-Mart customer Abby Valdes and her sons, Isaiah and Ethan Gutierrez, about the bank’s opening and art contest for the kids.

Urban Trust Bank Links Success To Business Lenders

Margie Manning
Senior staff writer
Tampa Bay Business Journal
Friday, November 2, 2007

Urban Trust Bank expects to provide an alternative business lending option with its two new offices in the Tampa Bay area.

The federally chartered savings bank, one of about 225 banks and thrifts in the nation that qualify as minority-owned institutions, opened branches in the Wal-Mart SuperCenters in Gibsonton and Palmetto Oct. 29. They are among the first Urban Trust branches to go in locations owned by Wal-Mart Stores Inc. (NYSE: WMT).

The locations are a great way to enter the market and are convenient for the bank's target customers, both individuals and businesses, said Kathy Boden Holland, senior VP for business development.

"We see ourselves very much as a local community bank in each market we enter. The success of those banks is very much driven by its ability to serve and provide the products needed by the small- and mid-size business community," she said. "We feel in the locations where we are going, there's a wide variety of businesses that might not have physical access to services they would expect from a bank."

First wave of expansion

Washington-based Urban Trust is a portfolio company of The RLJ Cos., which was founded by Robert Johnson, founder of Black Entertainment Television.

In 2006, Johnson bought the former Metro Bank in Orlando and rebranded it as Urban Trust. It's grown from $9.5 million to $31 million in assets.

The bank was purchased with the intention of becoming a larger and more significant bank, and the move into Tampa is the first wave of that expansion, Holland said.

"Tampa is a large metro area with the diverse demographics we expect to see in any urban market. It's also growing. It's an example of where we can be competitive," Holland said.

Holland said the bank also plans to open locations in Jacksonville next year.

Flexibility needed

Minority owned banks in general have struggled with business lending, said William Michael Cunningham, president and CEO of Creative Investment Research Inc., a Washington consulting firm that focuses on minority banking.

CIR's Web site has received a growing number of inquiries from minorities and women looking for business capital.

"We forward them to selected minority banks, and we have been uniformly disappointed by the response. They are not able to provide the capital those folks need," Cunningham said.

Part of the reason, he said, is that the minority banks work with the U.S. Small Business Administration and use underwriting standards that are not flexible enough for some small businesses.

Urban Trust probably stands a better chance of being innovative in small business lending because its infrastructure is newer, Cunningham said, although regulations in the banking industry could make that difficult.

For his part, Johnson has made it clear he wants to boost business lending. In an address to the Black Enterprise Entrepreneurs Conference in Orlando in May, Johnson called small businesses the growth engine of the U.S. economy.

"At the bank, we want to have relationships with small businesses which are out looking for credit, but also advice," he said.

Minority view

Two startup banks in the Tampa Bay area also have strong minority ties.

Central Bank in New Tampa qualifies as a minority depository institution because Asian Americans make up the bulk of its board members, but the bank hasn't taken advantage of any benefits the designation offers, said Marty Gladysz, president and CEO.

NorthStar Bank has not sought the designation, although more than 51 percent of its board is composed of minorities and its downtown Tampa location is considered a predominantly minority community, said Monty Weigel, president and CEO.