Bigger, Black-owned bank in Memphis comes at a critical time
When Tri-state Bank merges with the nation's third-largest Black-owned bank, Liberty Bank and Trust Co., it won't mark the first chapter in the story of Black economic self-sufficiency in Memphis.
It'll add to the one that Robert R. Church began writing more than a century ago.
In 1906, Church, the South's first Black millionaire, opened Solvent Savings Bank and Trust Company, which closed just before the Great Depression in 1929.
Then, in 1946, J.E. Walker and his son, A. Maceo Walker, continued writing the story of Black economic progress by opening Tri-state Bank.
It helped thousands of Black Memphians buy homes, bail civil rights protesters out of jail, and save the Lorraine Motel, where Martin Luther King Jr. was killed.
Now, more than a decade after the Great Recession caused Black homeownership in Memphis and elsewhere to plummet, and after years of retail fleeing to Southaven, Mississippi, and other places outside Whitehaven or South Memphis, Liberty and Tri-state will add a new page to that chapter.
And Frank Johnson, a South Memphis economic and environmental activist, can't wait to be included in it.
“I'm going to open an account with them as soon as I get my paycheck,” said Johnson. “My church is going to open up accounts with Liberty, so we're already jumping on that...
“One of the things that built old Black Memphis up was access to capital of our own. We did not have to go asking other groups to look at our plans and to see if our plans made sense to them.
“We know what makes sense to us, and we know what works for us.”
Angel Price, regional director of commercial lending and business development for Liberty, and Archie Willis, chairman of Tri-state, channeled Johnson's enthusiasm.
Especially since combined, the bank has the assets to do what makes sense to people like him.
“It is a gamechanger,” Price said. “Tristate brought Liberty Bank's assets up to a billion dollars, which is a really big deal for African American-owned banks. That makes us the largest, and it gives us the ability to do more in our community.
“We have larger loan limits…we can now make loans in excess of $5 million, where with Tri-state, were limited to a million dollars.”
Said Willis: “Given their capital position, they [Liberty] may be able to make some loans that Tri-state was unable to make because they have a bigger capital base…
“So, they'll be able to do more.”
But will they indeed do more?
Given the history of Black-owned banks in the nation, and the fact that most of them arose during times when segregation and other injustices stifled Black people's access to banks and other economic vehicles, that answer is likely yes, said Michael Neal, senior research associate in the Housing Finance Policy Center at the Urban Institute.
For example, said Neal, whose research focuses on the role that Blackowned banks play in community development, when other banking institutions tightened Black borrowers' access to mortgage loans between 2007 and 2013, Black-owned banks boosted mortgage loans by 57 percent.
“In our report, we really saw this surprising result that, in the aftermath of the Great Recession, Black banks overall increased their lending to Black homebuyers at a time in which people were pulling back,” Neal said.
“What that shows is there is this mission-related focus and there is this degree of efficiency that could help boost it…
“There's also a people aspect here, maybe to a second degree, with respect to jobs. So, with the Black bank there's not only going to be the lending there to produce jobs, but the bank itself will hire people.”
The merger will also foment hiring people who can underwrite and process loans and mortgages — something which is bound to help redevelopment in Whitehaven, where Tri-state is located, and in South Memphis.
“I'm looking at a [business development] request now near our branch in Whitehaven,” said Price, who grew up next to Whitehaven in Oakhaven.
“There's an opportunity for development there. There's also some planned development that we've made a commitment to finance the beginning stages of, which will be a gamechanger.
“When I drive through the Whitehaven corridor, I see those opportunities, and my goal is to make those changes.”
A bigger, Black-owned bank in Memphis comes at a critical time.
It comes at a time when the median income for Black people in Shelby County is about half of that of white people, and at a time when investors are hollowing out Black communities by purchasing homes and creating communities of renters and not owners.
It comes at a time when people in the neighborhoods surrounding Tri-state Bank are spurning businesses that marginalize them, businesses like plasma donation centers, convenience stores and pawnshops, and seeking businesses that bolster a sense of place and culture.
Those would be businesses like restaurants where one can sit down and have a meal, and places like Muggin Coffeehouse, galleries and other developments which bet on the potential of those communities, and not on their death spiral.
“There's the direct route [of help provided by Black-owned banks], the kind of lending that grows wealth, for small businesses and homeownership,” Neal said.
“That bank is going to lend to a small business, and that business is going to pay back the loan in increments, and then that bank is going to turn around and lend it to someone else in the community.”
The merger also comes at a time when people like Anasa Troutman, executive director of Historic Clayborn Temple, and others are working to bring restorative economics — a strategy to help people in struggling communities pool their assets to provide basic needs, like supermarkets, that outsiders won't — to South Memphis.
A bigger, Black-owned bank in that area could be key to making that strategy work.
“Black Memphis was built on small businesses, Black-owned businesses,” Johnson said. “I didn't have to go to Oak Court or any of these stores until I was like 17 or 18 years old, because everything was in South Memphis.
“We had a whole network of Black lenders who lent to Black people, and that's how my father got the house I'm living in now.”
And now, Tri-state and Liberty will help Memphis' Black communities turn a new page on self-sufficiency.
One to add to the story that Church began scripting more than a century ago.
Tonyaa Weathersbee can be reached at tonyaa.weathersbee@commercialappeal.com and you can follow her on Twitter: @tonyaajw