Johnson's Urban Trust Bank Makes D.C. Debut
Tuesday, September 26, 2006
Urban Trust Bank opened its doors yesterday, its backers confident that a minority focus and a well-heeled founder will help it stand out in a competitor-clogged Washington banking market.
Controlled by media entrepreneur Robert L. Johnson, Urban Trust is one piece of a multi-pronged effort by Johnson to build a diversified financial services company encompassing everything from checking accounts to asset management for huge pension funds.
"We're building a broad financial service profile," Johnson said yesterday at Urban Trust's sleek headquarters branch, at Franklin Square downtown. Johnson's RLJ Cos. in Bethesda owns Urban Trust, and a minority interest is held by Georgia multimillionaire Frank J. Hanna Jr.
Johnson said he was using his money and influence to expand the bank. He said a private equity fund his company manages made a substantial deposit in Urban Trust, and he recently wrote a letter to "30 of my CEO friends" around the country, asking them to make deposits in the bank.
Johnson sold Black Entertainment Television in 2000 for $3 billion. Since then, he's built a budding conglomerate of sports, entertainment and financial services companies.
According to data from bank regulators, Urban Trust had about $9 million in assets when Johnson bought control of the bank in March. Three months later, it had $22 million.
Dwight Bush, a veteran banker hired to run Urban Trust, said it will focus its lending on mortgage, consumer and student loans. He said the bank hopes to become a Small Business Administration lender. In June, it joined investment bank Goldman Sachs Group Inc. to form UTB Education Finance LLC to make college loans.
Bush said the bank is pursuing accreditation as a minority bank by the Treasury Department; major corporations often put excess cash in banks in the Treasury program as a way of encouraging minority banking. Urban Trust has a branch in Orlando, where it was formed as a black-owned neighborhood thrift before a series of ownership and financial problems led to Johnson acquiring control this year.