Completion of Landmark Merger Creates America's First African-American-Owned National Bank; Network of Community Banks Seeks to Promote Inner-City Development.

Business & Lifestyle Editors

BOSTON--(BUSINESS WIRE)--May 2, 2001

Boston Bank of Commerce, Peoples Bank of Commerce in Miami and Founders National Bank of Los Angeles today announced the completion of a merger creating America's first black-owned national bank.

The combined enterprise also becomes the third-largest black-owned financial institution in the United States.

The merger was approved by the company's board of directors and shareholders last year and by the Federal Deposit Insurance Corp. and other regulatory authorities in April 2001, and closed on April 30, 2001.

With more than $260 million in assets, the new bank will serve Boston, Los Angeles and Miami. Its shareholders include Earvin "Magic" Johnson, Janet Jackson and music-industry executive Jheryl Busby.

"My hope is that this bank will become an example for other financial institutions that serve the inner city," Johnson said. "If we can create an expanding network of community banks, then we'll go a long way toward building economic growth and individual opportunity into hundreds of neighborhoods across the country."

Said Jackson, "Our vision has become a reality that will touch the lives of many and help them buy homes, educate their children, start businesses and improve their quality of life."

Busby will join the combined company's board of directors, which includes all board members from both Boston Bank of Commerce and Founders National Bank. The former Motown Records president also will spearhead the bank's effort to provide athletes and entertainers with financial services and investment opportunities that encourage inner- city economic development.

Boston Bank of Commerce and Peoples Bank of Commerce will retain their names. Founders National Bank will be called Founders Bank of Commerce. All three will be managed as local community banks.

"This combination is a major win for our community," Busby said. "Founders will continue to serve the local banking needs of Los Angeles, but with the added power of a national franchise. We will expand the services offered to our community through improved technology and greater management resources. We believe the combined entity represents the future for African-American-owned banks."

Boston Bank of Commerce Chairman Kevin Cohee, who is a major shareholder, will serve as chairman and chief executive officer of the combined institution.

"This full-service enterprise promises to create value for our shareholders, our employees, our customers and the inner-city communities we serve," Cohee said. "Moving into the 21st century, we intend to create a business model that will enable minority banks to create opportunity and strengthen urban neighborhoods."

Kenneth T. Lombard, president of Johnson Development Corp., has been named vice chairman. "Today's merger is an extension of our mission to spur economic development in America's urban communities," he said.

Boston Bank of Commerce's assets grew from $59 million in 1996 to $157 million in 2000, when it posted record profits. Founders National Bank, which operates branches in Compton, Calif., and South Central Los Angeles, has assets of more than $107 million.