Over a bacon-and-egg breakfast, the banker in blue suit and suspenders calculates the potential returns from the $35 million he's got tied up in a real estate project up the street.

There's the profit on the construction loans. Then there are the origination fees on the mortgage loans for the 65 townhouses and 77 condos. And those new owners are as likely as not to open checking accounts and get a credit card from the new bank branch office in the renovated retail strip also financed by the bank. Fannie Mae will pay the bank a nice fee when it buys the mortgage on the 353-unit apartment complex, the centerpiece of the development. And as a co-developer, the bank looks to earn its share of up to a $10,000 profit on each condo and townhouse sold.

The banker in this case is Chris LoPiano, who started his career as a union lobbyist and community development activist. The breakfast is at Mama Coles off Martin Luther King Avenue in the District. And the project is called Washington View, where Bank of America has transformed a boarded-up housing project and crime-ridden apartment complex into a showcase for affordable housing.

LoPiano is one of 30 employees in BofA's community development banking unit, which is proving there is good money to be made in neighborhoods once considered too risky.

"BofA is the pioneer," said Buzz Roberts, a vice president of the Local Initiatives Support Corp., a community development group. "They do cutting-edge stuff and put big bucks in where it makes sense."

We're talking not about some pokey, do-gooder, Jimmy Stewart-like savings and loan, but an organization that has become America's biggest bank -- and one of its most profitable -- by being hard-nosed and aggressive.

One way it got there was to figure out precise criteria for determining which small-business and consumer loans make money and which don't, and then to ruthlessly apply that criteria to huge volumes of loan applications. If you have a square-peg loan, BofA's highly centralized and computerized underwriting unit will get you an answer the next day, offering the best rate in town. If you've got a round-peg piece of business, however, you'll probably want to try elsewhere, as today's news story about fees attests.

At first blush, BofA's community development bank seems an odd departure from that model, or a cynical ploy to satisfy federal community reinvestment targets. In fact, it approaches it in much the same way as its core business.

Through trial and error, BofA has come up with criteria for identifying down-and-out neighborhoods with profit potential -- good views or proximity to downtown, a Metro stop, well-run community groups. Then it shows up, like the Third Infantry, with every (financial) weapon ever thought of -- tax credits for low-income housing, SBA loans for retailers, bond underwriting for the local charter school that included an interest rate swap, even contributions for after-school programs.

The idea is to get in early, while things are cheap, and bring these tools to bear not just on one housing project but on an entire neighborhood. And by bringing a critical mass of investment and specialized knowledge, BofA has a formula for creating a positive dynamic that has eluded past community development efforts.

"What we have proven is that if you know what you're doing, these neighborhoods aren't risky," explained Brian Tracey, who oversees BofA's community development unit here. And Tracey has the numbers to prove it: a 12 to 15 percent return on equity.

While that is still below the bank's overall 19 percent return last year, Tracey's marching orders are pure BofA: Drive an even greater volume of business through his system, replicating the successful formula with larger projects in even more neighborhoods.

E-mail Steven Pearlstein at pearlsteins@washpost.com.