Boston Bank of Commerce breaks new ground.

Acquisition of Miami bank creates first interstate black-owned financial institution

In a historic deal crafted by a new generation of bankers, the Boston Bank of Commerce acquired the deposits and assets of Miami's Peoples National Bank of Commerce, creating the first interstate African American-owned bank in the country.

Kevin Cohee, chairman and CEO of the Boston Bank of Commerce, will now be in charge of a banking institution with assets exceeding $145 million.

"We saw a system of banks where, although people were trying hard, they were not living up to their potential," Cohee says. "By linking banks together across state lines, we are harnessing our resources. If we can ever harness our economic power, it would go a long way in solving the economic problems that African Americans face."

Cohee and Robert Patrick Cooper, senior counsel for Boston Bank of Commerce, appear to be on a mission to save ailing black financial institutions across the country. The duo, along with Cohee's wife and partner, Teri Williams, who has an M.B.A. from Harvard, first made news in 1995 when they acquired the failing Boston Bank of Commerce. Five years later they're at it again.

The FDIC placed Peoples Bank into receivership in September after its capital ratios plunged below 2%. Although Peoples had thousands of customers, banks are required to keep a certain amount of capital in reserve. When they don't, the federal government steps in to protect consumers.

In a deal crafted literally overnight, Cooper said that although the federal government closed the bank on a Friday, the institution was back open for business the following Monday.

Cohee, 41, and Cooper, 39, graduated from Harvard Law School in 1985. They say the deal in Miami was similar to the one in which they acquired the Boston Bank of Commerce in 1995.

"Both banks were in trouble," says Cooper. "In Boston, Kevin and Teri used their own money to recapitalize the bank It's really important to have a bank totally focused on our community." Cooper adds that he and Cohee hope to acquire additional African American financial institutions in the future. "The real success story is that not one person lost a penny in either bank when we stepped in and took over."

The collapse of Miami's Peoples National was hardly the first failure for a black-owned bank. In 1998 bad loans and undercapitalization spelled the end for Detroit-based Omni Bank which was seized by the FDIC.

Since the pair took over the Boston Bank of Commerce, the institution's deposits have grown from $55 million in 1996 to $74 million in 1997 to more than $100 million in 1998. Cooper says they plan to follow the same blueprint of making tough choices when it comes to lending practices and getting tough in collecting on bad loans to restore Peoples to solvency.

"The real challenge with many banks in low income areas is these loan portfolios," says Cooper. "You need someone to come and make tough choices. We sold off-bad loans and wrote offloans. You have to be in a situation to take a financial hit."

The Boston Bank gained clients like the Mass Bay Transit Authority in 1997. "We are the beneficiaries of the civil rights movement," Cooper says. "And we have the expertise and the resources to run these institutions."