insolvency successor urban partnership bank founded 1973 defunct 2010 headquarters chicago illinois key people ron grzywinski mary houghton george surgeon products financial services microfinance total assets 2.6 b usd 2008 parent shorebank corporation website sbk.com shorebank was a community development bank founded and headquartered in chicago . at the time of its closing it was the oldest and largest such institution and in 2008 had 2.6 billion in assets . 1 it was owned by shorebank corporation a regulated bank holding company . shorebank had branches in chicago s south and west sides cleveland and detroit . between 2000 and 2006 shorebank issued nearly 900 million in loans to citizens in chicago detroit and cleveland . 2 shorebank and its affiliated companies have projects in 30 countries . 3 shorebank incorporated environmental conservation into its mission during the 1990s helping develop a triple bottom line approach to banking equally prioritizing profits impact on people and the impact of a project on the environment . 4 shorebank accepted mission based deposits from across the country through its development deposits program launched in 1982 and its online savings account shorebank direct launched in 2007 . 5 although mission based the bank s financial performance historically matched or exceeded that of its peer banks . 6 however the bank faced significant losses in 2009 7 and as of may 2010 was seeking 200 million in additional capital from major investors and the u.s. government . the bank s losses were related to the recession though it was not engaged in subprime lending . 8 shorebank corporation was the first bank holding company to combine commercial banking real estate development nonprofit loan funds and international advisory services aimed at community development . originally developed as a neighborhood development bank for low income african american communities shorebank eventually expanded nationally and internationally . it exceeded its goal of private capital commitments but did not receive requested government support a condition of the private investors . in august 2010 the bank faced possible insolvency and risked having its deposits taken over by the federal deposit insurance corporation which insured its deposits . 9 on august 20 2010 the bank was declared insolvent closed by regulators and most its assets were acquired by urban partnership bank . 10 some of the more recent management hirees of shorebank in an unprecedented move by the fdic have been allowed to continue to run the restructured bank now a part of urban partnership bank . 11 according to the fdic the recent hirees did not contribute to the bank s problems . 12 13 sheila bair head of the u.s. federal deposit insurance corporation devoted several pages to the lack of federal support in her 2012 book and commented that the fdic sought approval of the injection of federal funds several times to no avail . 14 contents 1 origin 2 structure 3 recognition 4 scandal 5 references 6 further reading 7 external links origin edit this section needs expansion . you can help by adding to it . may 2010 a shorebank branch in chicago s bronzeville neighborhood in 1973 the south shore bank attempted to relocate from 71st street and jeffery boulevard in the economically declining south shore to the loop . at the time one third of all apartment buildings in south shore were tax delinquent and in danger of abandonment by landlords . angered by the bank s racist lending practices community banker activists milton davis james fletcher mary houghton and ron grzywinski purchased the bank after successfully petitioning the federal comptroller of the currency to stop the move after creating the illinois neighborhood development corporation . 15 urban planner stanley hallett was a founding board member and was vice president of the bank s holding company its first five years . renamed shorebank in 2000 it was the nation s first community development bank . during its 37 years of operation shorebank played a critical role in stabilizing and rebuilding many of chicago s low income neighborhoods and eventually expanded globally setting the standard for the development finance industry . as its range of financial products grew so did its geographic reach and influence in the banking industry . shorebank expanded into low income communities in detroit cleveland michigan s upper peninsula arkansas and the pacific northwest . its influence in arkansas influenced bill clinton then governor to propose the community development financial institutions act which he signed in 1994 . in addition shorebank executives assisted in the development of the international microfinance industry . after the collapse of the berlin wall the corporation s international affiliate shorebank advisory services assisted banks in central europe with small business lending . structure edit a shorebank branch on mack avenue in detroit shorebank corporation is the holding company for and with shorebank . its other subsidiaries provided banking equity investing consulting and environmental banking services shorebank pacific in oregon and washington state . on august 21 2010 it was announced that shorebank corporation had entered into an agreement to sell shorebank pacific to onecalifornia bank of oakland ca . the acquisition completed in december 2011 and the resulting entity was rebranded one pacific coast bank . 16 shorebank international with offices in chicago washington d.c. and london shorecap management shorebank established a number of affiliated nonprofits to provide related financing technical assistance and consulting services center for financial services innovation national community investment fund ncif northern initiatives in michigan s upper peninsula . on august 20 2010 northern initiatives announced that it had amended its by laws to end appointment of board members by shorebank and that it would continue its operations independently of the chicago based bank . 17 shorebank enterprise cascadia in oregon and washington state announced it would change its name to enterprise cascadia on august 20 2010 and would continue its operations independently of the chicago based bank . 18 in 2013 enterprise cascadia rebranded as craft3 . their new name reflects their focus on the three bottom lines of economic environmental and social equity . 19 shorebank enterprise cleveland . on august 20 2010 it was announced that shorebank enterprise cleveland was changing its name to enterprise cleveland ec and would continue its operations independently of the chicago based bank . 20 shorebank enterprise detroit . it was announced that shorebank enterprise detroit would be changing its name to enterprise detroit and would continue its operations independently of the chicago based bank . 21 shorebank neighborhood institute shorecap exchange recognition edit state senator barack obama and others celebrate the naming of a street in chicago after shorebank co founder milton davis in 1998 . shorebank its co founders and its affiliates have received numerous awards and honors including from the magazines fast company 22 business ethics 23 and u.s. news & world report 24 university of notre dame s mendoza college of business the independent community bankers of america 25 mayor richard m. daley of chicago 26 the chicagoland chamber of commerce 27 and governor ted kulongoski of oregon . former president and arkansas governor bill clinton is a prominent supporter of the bank . in 1985 shorebank worked closely with clinton to set up the southern development bancorporation a community development bank serving rural arkansans . clinton described shorebank as the most important bank in america 28 and credited shorebank s success with inspiring a movement of community development financial institutions cdfis . 29 under a grant from the ford foundation in the 1980s shorebank worked with muhammad yunus to help him incorporate grameen bank in bangladesh . yunus and grameen bank were awarded the nobel peace prize in 2006 . 30 later it worked with brac a second large bangladeshi organization . 31 scandal edit in 2010 shorebank had a troubled asset ratio of 300 % compared to a national average for all banks of 15 % . the scandal revolves around the banks close ties to president obama and the unusual circumstances surrounding its rescue effort . in which the bank was recapitalized through loss share guarantees from the fdic and a 367.7 million loss taken by the fdic insurance fund and nearly 140 million was invested by goldman sachs citigroup jp morgan chase morgan stanley and bank of america in the failing bank there were no other cases in which large banks have lined up to recapitalize a failing bank . 32 the bank faced continued scandal due to the highly unusual nature of the fdic lawsuit against the bank in which no co founders top executives or board members were named . 33 the management team of the former shorebank was then allowed by the fdic to remain in place and maintain ownership of shorebank by allowing them to purchase shorebank through the newly chartered urban partnership bank . although shorebank s president william farrow was brought on after regulators ordered shorebank to raise additional capital it is not standard practice for the fdic to resell a bank to the managers who ran the failed bank . 34 references edit annual reports . shorebank . rafter dan . uncommon vision motto . retrieved on january 9 2007 developing international economies . shorebank corporation . iowa state university . investing for triple bottom line returns 2006 6 1 . retrieved on january 8 2007 carpenter dave . bank with a heart thrives despite predictions of failure . savannah morning news . 11 june 2007 . marshall katherine . shorebank gauges success by profit and community impact medill news service northwestern university may 17 2005 retrieved september 19 2007 daniels steve april 2 2010 shorebank sees another 101m loss just ahead crain s chicago business williamson elizabeth & john d. mckinnon may 15 2010 bank rescue down to wire the wall street journal roeder david 2010 08 06 . shorebank on the brink . chicago sun times . retrieved 2010 08 06 . selyukh alina 2010 08 20 . regulators close chicago s shorebank . abc news . retrieved 2010 08 20 . guy sandra august 21 2010 . feds seize shorebank new management named . chicago sun times . archived from the original on august 22 2010 . gordon marcy august 20 2010 . regulators shut down big chicago bank 7 others . yahoo news . the associated press . archived from the original on august 22 2010 . retrieved 21 august 2010 . j.e. post and fiona wilson too good to fail stanford social innovation review fall 2011 1 bull by the horns fighting to save main street from wall street and wall street from itself by sheila bair free press 2012 . douthwaite richard . how a bank can transform a neighborhood short circuit . retrieved on january 8 2007 our history one pacific coast bank news about shorebank message from the president about craft3 news on shorebank henderson tom august 23 2010 shorebank enterprise detroit unaffected by namesake bank s closure will get new name crain s detroit business retrieved on september 6 2010 . profits with purpose shorebank . fast company . first sustainable . business ethics announces six social investment award winners sri news 2000 4 2 . retrieved on january 8 2007 schulte bret . ron grzywinski and mary houghton community bankers . u.s. news & world report . 12 november 2007 . cook tim . icba announces national community bank service award winners icba 2005 4 29 . retrieved on january 8 2007 clutter charles . mayor daley awards local companies employee development achievements pdf workforcechicago2 .0 2004 6 2 . retrieved on january 8 2007 chicagoland chamber of commerce . four chicagoland businesses recognized for workplace innovations www.chicagolandchamber.org . retrieved on january 8 2007 douthwaite richard . how a bank can transform a neighbourhood . short circuit . retrieved on january 8 2007 clinton william . remarks by the president in announcement of community lending initiative . white house south lawn 1993 7 15 . retrieved on january 8 2007