1st Security Federal Savings Bank prepares for Ukrainian community's future (02/08/04)

1st Security Federal Savings Bank prepares for Ukrainian community's future

by Paul Bandriwsky

Forty years ago, in Chicago, a group of patriotic-minded Ukrainians active in our community was presented with an opportunity to put their savings together and obtain a charter for a savings bank in the Ukrainian Village.

The goals of the group were twofold: have a financial institution that would serve the needs of the Ukrainian community by providing savings accounts and mortgages for home purchases, while handling these transactions in the Ukrainian language, and more importantly create a funding source that would support our churches, schools, youth groups, senior organizations, museums and other needs of the hromada.

Well, four decades have gone by and 1st Security Federal Savings Bank has prospered to the point where it grew to be the seventh largest thrift in Chicago, with assets approaching $500 million.

Over the past 10 years the Ukrainian Village neighborhood where the main office and drive-up facilities are located has gone through drastic changes. The area has rapidly gentrified, with a more affluent, youthful population demanding financial services like trusts, 24-hour telephone banking, Internet access, brokerage service and others that a small institution cannot provide. At the same time property values have increased significantly. These demographic changes have caught the attention of larger banks that have started to move into the Ukrainian Village area, significantly increasing competition for customers.

Many of the smaller community banks like Northwestern Savings, Damen Savings, Fairfield Savings and others in 1st Security's market area have merged with much larger institutions. The board of directors of 1st Security's holding company, First SecurityFed Financial, Inc., decided it was best to partner with another institution while the bank is still strong and better positioned to deliver the original goals of its founders.

Ukrainians have many characteristics, and one of them is a reluctance to let go of something that they have even if it is not sustainable. A number of thrifts focused on serving the Ukrainian community, such as Trident Savings on Chicago's south side, Trident Savings in Newark, N.J., and Philadelphia's Ukrainian Savings and Loan, were merged into other institutions without being able to leave a long-term legacy. With 1st Security's proposed merger with MB Financial Bank, a well-run bank with a successful history of serving ethnic communities, certain steps were taken to ensure that the interests of the Ukrainian community were looked after.

When 1st Security went public, it created the Heritage Foundation to support the financial needs of the hromada. The terms of the merger will increase the value of the Heritage Foundation's assets to $11 million. Furthermore, MB Financial agreed to contribute an additional $1 million to the Heritage Foundation, creating an asset base of over $12 million. In accordance with regulations that apply to foundations that require a minimum 5 percent annual distribution, at this level of assets the Heritage Foundation will be able to annually donate $600,000 to the community. This will ensure that our "hromada" will receive financial support for at least another generation.

Merging with MB Financial Bank will allow 1st Security's customers, who currently have access to four branches in Chicago, to have their needs served at 40 branches. Partnering with MB will permit many financial products and services, like 24-hour telephone banking in the Ukrainian language, to be offered that 1st Security could not efficiently provide on its own.

It is expected that 1st Security branches will retain all of their tellers, customer service representatives, loan officers and branch managers, allowing the same friendly, experienced staff to continue to serve customers in Ukrainian. 1st Security's Philadelphia branch will do the same and in addition will retain the 1st Security ("Pevnist") name.

Furthermore, with continued support from the community, MB Financial Bank will be able to focus on the financial needs of the recent immigrants from Ukraine who have begun to build new lives here, by having a safe place to keep their savings, a place to obtain mortgages for home purchases or business loans to grow their enterprises, and the comfort of conducting their financial business in Ukrainian.

Through the Heritage Foundation and the merger with MB Financial Bank, the vision and goals of 1st Security's founders will be accomplished and perpetuated well into the future.

Paul Bandriwsky is chief operating officer of 1st Security Federal Savings Bank.

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