Just when you thought that Wall Street only cared about themselves, along they come to bailout a down and out small Chicago bank.
The WSJ reports that there’s considerable firepower behind the effort to save Shore Bank:
Goldman Sachs Group Inc. has jumped into an effort to save a Chicago bank whose efforts to expand lending in poor communities have high-profile supporters in Washington and Chicago.
Goldman Chief Executive Lloyd Blankfein has discussed the Wall Street bank making an investment in ShoreBank Corp. with Federal Deposit Insurance Corp. Chairman Sheila Bair, according to people familiar with the situation. He has also telephoned other bank executives as ShoreBank tries to raise $125 million it needs to forestall a possible takeover by the FDIC, people familiar with the discussions say.
Regulators have told the bank it must have investor commitments by Friday. As of Thursday evening, people familiar with the fund-raising effort said it appeared to be close to its goal. They warned late Thursday that the effort could still unravel.
People familiar with the situation said Goldman initially declined to invest in ShoreBank. Within the past week, people familiar with the effort to save ShoreBank say Goldman agreed to commit about $20 million to the bank. That would make it one of the largest investors, according to people familiar with the talks. Goldman Sachs declined to comment on its involvement in the rescue effort.
If Goldman invests, it will join a group that tentatively includes Bank of America Corp., Citigroup Inc. and J.P. Morgan Chase & Co., among others, people familiar with the discussions say. BofA, Citigroup and J.P. Morgan all declined to comment. ShoreBank spokesman Brian Berg said the bank is “expeditiously engaged in capital-raising efforts.”
If you’re scratching your head over this one, then maybe this from the article will explain a thing or two:
“There’s been a lot of very determined voices about doing it because it’s the right thing to do,” a person familiar with the effort to save the bank said. “It’s an important institution, an icon, and we don’t want to see this one fail.”
President Obama drew attention to the bank’s micro-lending efforts while traveling in Nairobi as a senator. ShoreBank co-founder and now president Mary Houghton offered guidance on small-business lending to Mr. Obama’s mother, who worked on similar issues in Asia. Officers and employees of ShoreBank gave Mr. Obama’s 2008 presidential campaign a total of $12,150, according to data from Center for Responsive Politics.
Well, I won’t begrudge them their good fortune. After all, this is kind of the way that business goes in America these days. I suspect, though, that there are quite a few community bankers that won’t be quite as charitable as I.