Nation's Oldest Black Bank Gets New Leader

Crisis, The, Mar/Apr 2004 by Adams, Stacy Hawkins

Kim D. Saunders left a thriving banking career in the nation's capital to manage a crisis of historic proportions for two reasons: honor and opportunity.

In December 2003, Saunders became the second female president and chief executive officer of the oldest continually operating African American bank in the United States. Consolidated Bank and Trust Co. in Richmond, Va., was founded 1OO years ago as the St. Luke Penny Savings Bank by Maggie L. Walker, the first woman in the United States to found and serve as president of a bank.

"Consolidated is a national historic treasure," Saunders says. "It is necessary that we do everything possible to save and strengthen the institution."

Faced with millions of dollars in loan losses and shrinking assets, government regulators mandated the privately held bank improve its financial condition or risk closure. In 2000, bank officials signed an agreement with regulators that, in part, required new leadership.

Saunders, a graduate of the University of Pennsylvania's Wharton School of Finance and Commerce, was the executive vice president and chief lending officer for City First Bank in Washington, D.C., a community development bank, before deciding to take the helm at Consolidated.

"In the first century we had a female president, and at the beginning of the second century, we have a female president," says Walton Bell, board chairman for Consolidated Bank. "She is well trained and has approximately 20 years of banking experience, even though she's fairly young."

Saunders, 43, will need that experience to help prevent Consolidated's demise. As of Dec. 31, 2003, the bank only had $87.2 million in assets, down from $115.7 million three years ago.

"The bank needs additional capital. That's priority number one," says E. Joseph Face Jr., banking commissioner with the State Corporation Commission's Bureau of Financial Institutions in Richmond. "I do note some initial progress, but a great deal of work needs to be done."

Saunders believes the bank will survive. She says the bank has letters of interest from potential investors exceeding $7.8 million. Saunders has confidence that as more capital is obtained, the bank will be able to diversify the services it provides to customers.

"With new capital, you have the ability to grow and develop new products and services," says Saunders.

The bank, for example, wants to bring in new technology and products for their customer base, including debit cards and Internet banking, to name a few.

"Given its place in our history, [Consolidated] is important, not only for African Americans, but for the United States, because of the role African Americans have played in the development of our nation," Saunders says.

- Stacy Hawkins Adams