Dr. Emma Chappell is the first African-American woman in America to start a full-service commercial bank. She founded the United Bank of Philadelphia in March of 1992 and serves as chairman, president, and CEO of the bank, which has around $100 million in assets.

The motivation to start the bank came from her experience as treasurer of Jesse Jackson's presidential campaign in 1984. She found that every viable African-American community in the U.S. had a thriving minority-owned financial institution. As part of her push to establish a black bank in Philadelphia, which is 43 percent black, Chappell conducted a study in 1987. She found that there was $382 million being loaned for mortgages in the city but less than $8 million was going to the African-American community and less than $2 million was going to women in general. "The results of the study indicated that there was tremendous discrimination in Philadelphia as it related to mortgages and small-business lending," she says. "There was a need for a black bank."

Chappell started in banking in 1959 right out of high school at the former Continental Bank as a clerk-photographer, photostatting checks, making $45 a week. She worked her way up to vice-president in charge of the community business loan and development department, which she established in 1971.

"I saw the influence the bank president had and I said one day I will be president of a bank. I had no idea that I'd start a bank myself, but I had hoped that I would be able to grow up and be in a position to be appointed president of the bank. Starting the bank was difficult. So many people believed it couldn't happen. I had to convince my own community, because there had been about four or five failed attempts to start a bank in years past and people had become apathetic and nonbelievers. When people supported me, it was kind of a last-ditch effort. They said, 'If she doesn't do it, it's probably not going to happen.' The difference was that I had been active in the community in nonprofit organizations and had experience in banking," she says.

To start United Bank, Chappell raised the capital by selling stock to the community at $10 a share. She went to churches and community organizations and people's homes to persuade them that Philadelphia needed a financial institution owned and controlled by African-Americans. "I set out to raise $3 million and we ultimately raised $6 million by not only going to the African-American community but getting some of the other banks and insurance companies to buy some preferred stock," she says. The minimum amount to invest in the bank at the time was $500. The average investment was from $500 and $1,000, and the money collected was put into an escrow account in case the bank failed.

"I was working from home. I developed my business plan in my dining room. I met with a lawyer who helped me prepare my offering circular, and we did a private placement to sell the stock," she says. "I had been fortunate to go to graduate school and during that experience, which was right before I became national treasurer to Jesse Jackson, I learned how to operate a bank." Chappell earned a master's degree from the Stonier Graduate School of Banking at Rutgers University. Her thesis, "A Banking Strategy for Minority Business Development," was incorporated into United Bank's business plan.

United Bank stock is not public, and for now Chappell plans to keep it that way. "We currently have three thousand shareholders and that's as public as we want to be for the moment. Being private gives us an opportunity to grow the bank and position ourselves so that we can pay a decent return on the current shareholders' investment," she says.

Juliette Fairley is a financial journalist whose articles have appeared in The New York Times, USA Today, and Investor's Business Daily. She was also the morning producer at Bloomberg Business News and personal finance editor at Black Enterprise magazine.

Reprinted from Money Talks: Black Finance Experts Talk to You About Money
by Juliette Fairley.
Copyright 1998 by Juliette Fairley.
Published by John Wiley & Sons.
Reprinted with permission of John Wiley & Sons.
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