The last signs of Chicago’s old St. Paul Federal Bank for Savings will disappear Monday, when they are replaced with the branch signs of Charter One Financial Inc., the Cleveland company that bought St. Paul in 1999.
The name change comes after a year of major shifts at the former Chicago bank, whose poor performance before its sale had caused noisy shareholder unrest.
Since taking the helm, Charter One executives have expanded the bank beyond its investment banking focus to broader retail services. New home equity loans in 2000 totaled $300 million, nearly four times the amount St. Paul used to book, said Tony Sisto, president of Charter One’s Illinois division, which encompasses the Chicago area and soon will include Liberty Federal Bank, which Charter One plans to acquire.
Mortgage lending at the former St. Paul grew by $783 million last year, more than twice its average growth under the former owners.
Chicago-area deposits–a key measure of market share–have been flat since the St. Paul acquisition. Banks typically lose deposits after they are sold. And Charter One did lose some checking and other deposit accounts here, but made up for it with more than 50,000 new checking account customers, Sisto said.
Sisto, a Chicago native who previously ran Charter One’s Michigan division, said he knows how difficult the Chicago market has been on out-of-town banks.
Many banks covet the Chicago market but are reluctant to compete here because historically it has been difficult for outside banks to enter.
“I grew up two blocks from our corporate office here at North and Oak Park Avenues, and I think having local knowledge of the marketplace is important,” said Sisto, who also worked for the Chicago-area lending powerhouse Household International Inc.
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Because banks were not allowed to branch in Illinois for so long, Chicago communities grew up with local banks distinctly tailored to their needs, Sisto said.
“Sometimes I wonder if other players realized the uniqueness of this marketplace,” he said.
Cutting foreclosures: While other lawmakers look for ways to save victims of predatory lending from losing their homes, Illinois Rep. Julie Hamos (D-Evanston) has introduced legislation to help people who cannot make their mortgage payments because of short-term crises such as illness, divorce or a death in the family.
The measure is intended to prevent foreclosures and the homelessness that sometimes follows.
Under Hamos’ proposal, the state would fund agencies to provide counseling for homeowners in crises who cannot afford their mortgages. Borrowers unable to swing workout plans with their lenders could receive low-interest loans to assist with payments.
The program would cost about $5 million to serve approximately 2,000homeowners, said Julie Dworkin, senior policy specialist at the Chicago Coalition for the Homeless, which backs the bill.
The cost of preventing foreclosure is far less than the high social cost of homelessness in disrupting children’s lives and education, the coalition said. It estimates that state-funded shelters serve up to 10,000 families with about 22,000 children each year.
Bank Notes: Builders Bank, based in the Loop, hired Michael Winter as chief executive. Winter, ex-CEO of Palatine-based First Bank & Trust Co. of Illinois, replaces Mitchell Saywitz, who remains chairman of the bank’s holding company.