BET founder opens urban bank in District

Black Entertainment Television founder Robert L. Johnson opened his first bank in the Washington area yesterday, adopting the business plan of a community bank designed largely for minority customers.

The bank will focus on home buyers, small businesses and student-loan applicants who might be denied loans by larger institutions, he said.

“We’re going to know our customers better,” Mr. Johnson said after an opening ceremony in front of the bank at 1350 I St. NW in Washington’s central business district. “We see there’s a unique opportunity there.”

The bank’s directors chose the downtown site for the branch office to reach the thousands of office workers who walk or drive nearby each day.

“We felt we should be in the core of the business community with our flagship branch,” said Dwight Bush, Urban Trust Bank’s chief executive officer. “We are not the black bank; we are the urban bank.”

Mr. Johnson acquired his first bank in March in Orlando, Fla., which gave him and his business partners the Federal Deposit Insurance Corp. charter that they needed to open other branches throughout the Washington area.

Urban Trust Bank plans to open three more branches next year in Prince George’s County, Montgomery County and Northern Virginia. The company’s corporate headquarters is in Bethesda.

Mr. Johnson, a billionaire who was ranked 374th on Fortune magazine’s list of the 400 richest Americans last week, said the bank will be backed by reserves from his financial services, hotel, real estate and entertainment businesses.

The Urban Trust Bank venture comes as industry consolidation forces some black-focused banks out of business.

“African-American banks are having trouble,” said Delegate Eleanor Holmes Norton, the District’s Democratic nonvoting representative in the House, who attended the bank’s opening.

Bankers say Urban Trust Bank will have a better chance of success if it tries to win customers from a wider community.

“African-American institutions are not growing as fast as some of the other community banks around the country,” said James Ballentine, community and economic development director for the trade group American Bankers Association. “They go after the African-American community. In order to grow at a rapid rate, you have to go after a broader market.”

Intense competition among the Washington area’s banks leaves little room for error in trying to win customers, he said.

Mr. Johnson’s choice of downtown Washington to open his first bank in the region “indicates that he’s going to develop a marketing strategy I have not seen before,” Mr. Ballentine said. “It’s important for them to say, ‘We’re minority-owned, but we’re a bank that serves all persons.’”

Mr. Bush said the bank has formed partnerships with nonprofit organizations, such as the Greater Washington Urban League, to teach financial literacy to people who are underserved by banks in hopes of winning them as customers.

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