Asian American Bank
Timing is everything.
Between 1989 and 1997, a period when more than 1,500 FDIC-insured banks across the country closed their doors, few people in Massachusetts contemplated opening a new one. In fact, the only Massachusetts group that did was located in Boston’s Chinatown community.
On August 11, 1993, (a year when three more Bay State banks failed), Asian American Bank opened for business at its former address at 17 Kneeland Street. (Later, in May of 1997, it moved to its current headquarters building at 68 Harrison Avenue.)
“The timing of our opening speaks more to the bank’s mission,” said Raymond Tung, Asian American’s president and CEO. “We were founded by a group of Asian Americans and their friends to address a specific problem: The Asian community was not being served adequately by the mainstream banks. The tough banking environment of the time simply did not stop the enthusiasm of the bank founders and they convinced the banking authorities that this was a very good idea and a worthwhile mission.”
A newcomer to the Boston banking scene, Tung came to Boston after a 20-year career in New York with an institution that finally ended up as J.P. Morgan Chase. It was the string of changing identities at that bank that finally convinced Tung to move on.
“While I was there the bank went through four or five mergers which transformed the business philosophy and approach drastically. With the move to a smaller bank, I realized that there was a real challenge here, to provide top-notch banking services to this community. And for me it was almost like starting a new career,” said Tung.
In the grim banking environment of the late 1980s, obtaining a bank charter was no easy task. In the wake of scores of bank failures in the region in the previous three years, state banking authorities were being extra cautious. Capital requirements for the proposed bank were such that it took four years before the funds could be raised within the community.
But when discussing the birth of Asian American Bank, Tung gives great credit not only to the founders but to the state banking authorities and the investment community.
“They recognized that this would be a bank with a special focus, to serve a community whose banking needs were not being sufficiently addressed. Also, the bank was founded with a solid capital base from day one and we continue to maintain a higher capital base than many other banks.”
The bank’s loan portfolio currently has a ratio of two thirds commercial, one third residential mortgages, and its deposit base topped $98 million at the end of 2003.
“We’re not a big bank, not even a medium-sized bank, but we’re a healthy bank and we are determined to meet our responsibilities in the Asian community,” says Tung.
Today, Asian American Bank has expanded beyond the Chinatown community, extending into the Allston-Brookline neighborhood and into Quincy, where they serve the banking needs of not only Asian-Americans but other immigrant populations as well. The bank offers a contemporary list of financial services for both individuals and local businesses, with delivery channels that include its branches, ATMs, Internet and telephone banking. But its multi-lingual staff continues to be its biggest asset, says Tung.
“Although we have no specific plans for new branches right now, we keep a close eye on where the Asian community is going. Overall, this is one of the fastest growing immigrant populations in Massachusetts,” Tung observed. “There are Asian communities in places like Lowell and Malden, and, logically, they’d be places where we would be looking. But we’re not going to open a branch because we have a gut feeling. We study demographics, spending habits, banking habits to see if it would be a viable branch from a business viewpoint.”
The Chinatown community, beset by its own unique problems — highlighted by absentee landlords who let their properties deteriorate, and the festering remnants of the city’s notorious Combat Zone — was for many years mired in economic stagnation. Small businesses had trouble getting financing, and many non-English-speaking immigrants in the community steered clear of downtown banks where the language hurdles alone were enough to deter them.
“Of course, the bulk of our customers are Asians, many of them recent immigrants. I was born in China, then lived in Hong Kong and came to America many years ago, so I understand the challenges these new immigrants face.”
To help with these challenges, Asian American Bank holds Banking Smart seminars at its Harrison Avenue headquarters, a re-branded version of the FDIC’s Money Smart educational program. The FDIC recognized the bank’s efforts by awarding it a Money Smart Alliance membership, citing the institution for developing its own Chinese version of the FDIC content. Chinese-speaking bank staff members provide information on basic financial tools like checking and savings accounts, establishing credit, and how to go about getting a mortgage loan. In addition, the bank brings in occasional outside speakers.
“Because they are new here, many of our customers require a certain amount of hand-holding. These sessions are very basic, and strictly educational,” Tung says. “I tell my people that they are not to be used for sales pitches, and none of the bank marketing materials are to be distributed.”
Asian American Bank is also proud of the non-banking role it plays in the community. Recently the bank forged a partnership with the Boston Chinatown Neighborhood Center (BCNC), donating an initial $2,500 for the construction of a new community center. The new center will have five stories and 20,000 square feet, including a child care center, a youth center, multi-purpose classrooms and computer facilities. The bank has pledged to continue its support of BCNC through additional fund-raising and ongoing promotional activities.
The bank also fosters numerous promotional activities of its own, including co-sponsoring a ticket raffle for last January’s Houston Rockets versus Boston Celtics game, which featured the Chinese-born star center of the Rockets, Yao Ming. Another popular promotion was the bank’s Success Account Lucky Draw, in which two customers were awarded a round trip ticket between Boston and Hong Kong.
A downstairs banking hall in the bank’s headquarters is also the locale for evening presentations of critical interest to the Chinatown community. The bank recently invited representatives of the American Cancer Society to present a health forum, conducted in both English and Chinese: “What Should You Know About Lung Cancer.”
“Smoking is a big problem in the Asian community. We feel our mission is to help address the problems of the Asian community, not just financial problems, but other problems, including health,” says Tung.
The result is quite a healthy bank.
— Larry Collins