Black-owned Highland Community Bank may be saved from collapse

A would-be savior has emerged for foundering Highland Community Bank, one of just three African America-owned banks left in Chicago.

But the definitive agreement from the parent of startup Generations Community Bank to acquire the failing bank, announced today, is subject to raising at least US$8 million in equity both to absorb loan losses at the Highland Community Bank and to capitalize it to grow.

Matthew Roth, the former Harris Bank executive who has pursued starting up a minority-focused community lender on the South Side for several years, said in an interview that he and his team believe they understand the depth of the loan problems at the Highland Community Bank. He declined to say how much he thinks he needs to raise from investors, but one person familiar with Highland said it’s at least US$8 million and probably more.

Roth, who would run the newly named Generations Community Bank as president and CEO if the deal closes, said he hopes to complete the capital raise and garner regulatory approvals in the early third quarter.

“We feel optimistic about our prospects to raise the capital,” he said. “It’s ambitious, but we think we can get there.”

The Highland Community Bank is under order by bank regulators to raise capital.

Read more: Crain’s Chicago Business