Crain's Chicago Business: The CEO speaks on the future of Urban Partnership Bank




Urban Partnership Bank thinks this is the year it finally will emerge from the long shadow of the demise of its forebear, ShoreBank.

The South Side lender in economically distressed South and West Side neighborhoods has to navigate two challenging barriers to truly get to the other side of ShoreBank's 2010 failure—Illinois' second priciest since the financial crisis, costing the Federal Deposit Insurance Corp. $512 million as of the end of last year.

For UPB, the first crucial goal is to negotiate an end to a costly agreement with the FDIC to share in loan losses on the ShoreBank portfolio. UPB CEO William Farrow in an interview expresses confidence that will occur in the second quarter.

But after that comes a tougher hurdle: persuading investors to plow what a source says will be $20 million to $30 million more into a bank that hasn't once turned a profit since its inception and has lost more than $100 million of previous investor capital to date. (UPB allows it will seek capital but won't say how much.)

The likely targets to invest will be some of the same institutions—banks and locally based insurance companies—that already back UPB and did so six years ago under pressure from the FDIC. Key to winning more money will be assuring them UPB now is stable, won't need more rescue cash and is making a difference in the neighborhoods it serves.

To continuing reading the full article, click here.