Banking on expansion

OneUnited Bank, a Boston company ranked as the nation's second-largest black-owned bank, is planning an expansion that could put up to five new branches in Boston neighborhoods before year's end and eventually dozens in other cities.

The bank opened a branch in Grove Hall on May 21 , on a bustling corner across from a Bank of America branch and the Mecca Mall. Kevin Cohee , the bank's chief executive, says he wants to open up to four more branches here as quickly as he can secure good locations.

OneUnited's identity in its hometown has always been something of an enigma. Through various incarnations over four decades, it has billed itself as a bank concerned with the financial health of minority neighborhoods. But until Grove Hall, it had never built a branch in any neighborhood from scratch. And Cohee, a self-made millionaire who rose from an orphaned childhood to the Ivy League and Wall Street before taking over the bank, has been both praised in Boston for saving the bank and loathed for running it with what some perceive as a brusque, outsider's mindset.

In recent years, OneUnited concentrated on building a national brand by buying banks in Los Angeles, and Miami, major cities with a significant population of affluent African-Americans. Now, Cohee plans to put new branches in those cities and others, such as Atlanta, and Washington, D.C., and says he has lined up more than $100 million in funding to propel his plan.

"Every major hub of the inner-city community where you do business, we're going to drop a branch. This has always been about creating a minority-owned business enterprise that would participate in local economies and national economies," he said.

But OneUnited could face challenges as big as the idea upon which it was founded. The company is an outgrowth of a bank founded to serve black neighborhoods in post-civil rights era Boston, when mainstream banks didn't do business there. Today, competitors like Bank of America Corp. and Citizens Bank are entrenched in minority communities and spend significantly on multicultural marketing.

Last year, another group of Boston investors took a crack and failed at creating a bank that targeted African-Americans with online savings accounts, another key strategy for OneUnited. And some who already do business with OneUnited said Cohee must do more than open branches to ensure its presence is felt in Boston's black neighborhoods.

"Folks are very sensitive when it comes to where they're doing their banking. They want that service, and there's a great opportunity for Kevin up here in Grove Hall to be more sensitive to the residents of this community," said Virginia Morrison , the executive director of the Neighborhood Development Corp. of Grove Hall . The organization built Grove Hall's Mecca and two residential projects in the neighborhood, in part with funding from OneUnited.

Morrison said Cohee missed an opportunity to beat Bank of America into Grove Hall when he passed on a location she pitched to him more than a decade ago.

"He was new to Boston and Boston politics," she said. "I don't think at the time that he saw the advantage of doing business in the communities of color. I think he does understand that now," she said.

Cohee said OneUnited, which ranks second on Black Enterprise magazine's list of the largest black-owned banks in the United States, wants to be known as a Boston institution, in contrast with other banks that have distant ownership.

"You've got some people from Scotland in here, some people from North Carolina in here, and they don't care anything about what happens around here," he said. "You don't get anymore Boston than us."

OneUnited is also trying to increase its lending in minority neighborhoods after having made relatively few loans in the early years after Cohee took over. In 2001, the bank made $11.6 million in new loans, compared with $182.9 million last year. Robert Patrick Cooper, OneUnited's senior counsel, said the bank had to hold back on its lending for several years while it cleaned up the underperforming loan portfolios of some of the banks it had acquired.

Founded in 1968 as Unity Bank & Trust Co. , OneUnited has focused more on building a national franchise in recent years. Cohee reorganized the bank in 1995 after its predecessor, Boston Bank of Commerce , had been ordered to stop operating by federal regulators.

In 1999 , OneUnited bought Peoples National Bank of Commerce in Miami . In 2001 , it merged with Founders National Bank and in 2002 it bought Family Savings Bank , both of Los Angeles . Last year, OneUnited started an online banking division, offering high-interest savings accounts to draw in deposits from all over the country.

Still, even Cohee acknowledges that the best barometer for his new branch plan is Grove Hall, a neighborhood symbolic of OneUnited's mission. A highly trafficked intersection crowded with carry-out restaurants, hair salons, and dominated by the Mecca Mall and its Bank of America branch, Grove Hall is literally at the crossroads of Dorchester and Roxbury, neighborhoods with among Boston's highest concentrations of minorities.

Across the street from both banks sits an ironic, if not ominous sign: an old bank now occupied by a church.

Inside the branch, manager Colette McKenzie said 13 people opened new accounts on opening day. She said she expects traffic to pick up after the bank holds its official groundbreaking, expected to be attended by Mayor Thomas M. Menino and other notables, this morning.

Last Wednesday , about five people walked in during lunch hour to open accounts or make transactions. Two of the customers and the branch's teller supervisor, all black women, knew each other from attending the same church.

To some of the customers, OneUnited's status as black-owned was important in their decision to bank there. For others, getting a flier on the street was enough.

"If we are going to get anything established, we have to do it on our own," said Claudine Allen , a Canton woman who owns a convenience store near Grove Hall, when asked if the race of the bank's owners mattered to her. She said she and her husband have banked with OneUnited for 15 years, though they have accounts at other banks.

But Randolph Barkon , a native of Liberia -- an African nation founded by black expatriates from the United States -- said a flier he got while on his way to get donuts three weeks ago brought him into the bank. The owners' ethnicity didn't matter, said Barkon, who lives in Mattapan and was opening a savings account for his 11-year-old nephew.

"This is the new bank in the neighborhood, and they need customers, so I don't mind," he said.

Keith Reed can be reached at reed@globe.com.