Unity finally capitalized last year at $1.2 million and was the first bank in New England to sell its stock to the general public. Many of the $10 shares were sold in $50 blocks to people who had never conceived of owning stock in anything. Roy G. Guittar, executive vice president and the bank's only white employee, said that 70 to 80 percent of the 3,358 shares are owned by residents of the predominantly black Roxbury-Dorchester community. According to Guittar, there is no controlling interest in the bank and the 22-man, unpaid, board of directors--of which 16 are black--owns less than ten percent of the stock. In most commercial banks the board of directors usually extends about 50 percent of the capital, Guittar said.
Demand for Unity's stock was so great that the initial capitalization, set at $1 million by the State Board of Banking Corporation, was raised to $1.2 million and stock requests totaling $44,000 still had to be returned. Guittar recalls one rich white businessman who wanted to purchase $400,000 worth of Unity stock. He was refused because the board of directors had established the policy of scrutinizing all requests over $10,000 and set a $25,000 maximum. "We wanted to avoid any controlling interest," Guittar explained.
Unity became the first state chartered bank to over capitalize prior to opening for business and now, in a mere 90 business days of existence, it is on the verge of making a profit, a feat that, according to Sneed, usually takes a commercial bank three to five years. Since the stockholders are chiefly citizens of Roxbury and Dorchester, Unity's success will profit the entire community.
Sneed, a tall, dark brown pillar of a man, works out of a seven-by-seven foot office allotted for the president. He is involved--unlike most bank presidents--in the day-to-day business of the bank and spends almost half his time assisting individual customers in the bank's main room. "We give really human service here and know our customers by name, not number," he boasted in a recent interview. But Unity is probably one of the only banks in the country where all customers have access to the executives at almost any time.
As a budding black enterprise at a time when the need for black entrepreneurship is much publicized by urban politicians and ghetto leaders, it would seem that Unity faces a dilemma. The bank must be concerned with extending new loan oportunities to people who may not have upheld their commitments in the past and must be concerned with its own success as a financial endeavor. Sneed and Fulp see this problem differently. "There are factions of both the black and white community that are watching to see whether we are going to pass the supreme test of survival," Sneed said. But Fulp refuses to succumb to this pressure.
"We are a going establishment and intend to remain here with a quasicrusading role," Fulp said in his softspoken but intense manner. "Black institutions historically have had inferiority complexes. This is a handicap that we need not have to deal with. Even though we see this in print and know it to be a fact," he said, referring to the pressure on black institutions to succeed, "it must be treated as an irrelevancy. In order for people at this bank to be free to perform, they must be mentally free. This compex can't be allowed to immobilize us. Every time someone comes in here I can't think "We mustn't take this risk because we are a new black bank.'"
But Sneed is the president of the bank and the chairman of the board of directors and must be concerned with Unity's success. And he also speaks from experience. When he first approached the State Board of Banking Corporation to obtain a charter for Unity, the bank was required to capitalize at $1 million. According to Massachusetts statute, the capitalization requirement is determined by the population of the area where the bank is located. On that basis, Unity should have been able to capitalize at $450,000, not $1 million. "They figured we wouldn't be able to meet that and eventually fade into the woodwork," Sneed said of the board's action. "But we wouldn't be stopped by the restrictions they put on us." Demand for Unity stock was so great that eventually its board of directors requested an increase in capitalization to $1.2 million and got it.
Other experiences have made Sneed cynical. When Unity was establishing itself, Only one-tenth of one percent of the corporations invited to be stockholders actually responded. John Hancock, American Mutual, and Liberty Mutual are among those that did. The main task facing the bank now is soliciting accounts. Response, generally, has been good, with the Commonwealth of Massachusetts placing $360,000 in Unity last week to become the largest single depositor. Previously, the United Front Foundation had the largest account. Brandeis, Andover Theological School, Northeastern University, and Boston College have all become depositors and M.I.T. is a stockholder. A few large Boston corporations including New England Mutual, Prudential Life, New England Telephone, and Boston Gas have also responded. But 65 percent of the 40,000 accounts on record as of last week are from Roxbury and Dorchester.
Sneed said that "life insurance companies (like N.E. Mutual) are banking here because it's good business. They may find a new market for their service, and by establishing positive relations with Unity's presence in Roxbury has forced large white banks to entertain propositions from black businesses that they never