Today, however, ShoreBank is a struggling entity!
Lauded around the world for bringing banking services to the poor, Ronald Grzywinski and Mary Houghton have a new mission: rescuing the bank they launched 36 years ago.You should read the article, it's an inspiring story. Hopefully people who want to own a business or rehabing housing or commercial property can have such a relationship with a bank as the people of South Shore has. Right now they are hobbling thanks to the current environment involving the financial services industry.
The pair made a career of defying conventional banking wisdom, turning ShoreBank Corp. into a globally acclaimed standard-bearer for the proposition that banks can make profits and do good in communities mainstream lenders avoid.
But at an age when most senior executives would be looking to groom new leadership and ease out, Mr. Grzywinski, 73, and Ms. Houghton, 68, find themselves fighting to save the bank as bad loans pile up. Experts say they need to raise $50 million or more to keep ShoreBank afloat. And the price of a bailout could be their departure from policymaking roles at the bank they personify.
Investors "could demand changes in leadership because filling a hole created by management's mistakes does not meet their own mandates," says bank consultant Michael Iannaccone of Oak Park.
Ironically, the plight of the two banking iconoclasts stems from the same mistakes that are bringing down lenders across the country.
Like so many bankers, Mr. Grzywinski and Ms. Houghton hit the gas during the credit boom of the mid-2000s. ShoreBank's assets swelled by $1.1 billion, or 65%, during the past four years. Most of the lending was in neighborhoods hit hardest by the credit collapse and foreclosure crisis.