Volume 3, issue #11 - 03-04-1998

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Shell Oil forming banking alliances to support communities

Feb. 18, 1998 Shell Oil Company has announced the formation of a new subsidiary, Shell Community Financing Company of Texas, and an innovative business alliance with Unity National Bank in Houston.
The Shell Community Financing Company of Texas and Unity National Bank are combining their resources and expertise to establish the Shell Community Banking Initiative. This unique business alliance is a pilot program designed to provide more capital to expand Unity National Bank's lending capacity.
Another new subsidiary and a similar alliance are being formed in Los Angeles between Shell Community Financing Company of California and Founders National Bank of Los Angeles.
Based on the success of the two pilot programs, the initiative could be expanded to include four additional cities, to be identified after the pilot programs have been evaluated. The new Shell subsidiaries will participate with the banks to fund business development loans on commercial terms and conditions. These loans will target qualified minority and women borrowers. If the program is expanded, loan funds made available by the Shell Community Financing Companies over the three-year pilot period could total $ 45 million.
In addition to the loan program, under the Community Banking Initiative, the new companies will develop specific programs that could total up to $ 71 mm through a combination of cash deposits, an expanded certificate of deposit program, syndication of a fee-based credit facility and the purchase of a non-controlling equity interest in the two banks.
"Communities are living entities that private and corporate citizens must work together to sustain and grow," said Shell Oil's President and CEO Philip Carroll. "This Community Banking Initiative provides an excellent opportunity for us to help support the communities that support our company."
For more than 30 years, the area that surrounds Unity has experienced a decline, with more money going out than coming in. Unity's Executive Vice President and Chief Financial Officer Tommy Brooks believes the bank's enhanced lending power will attract more entrepreneurs. They will in turn contribute to Houston's economic growth and vitality by helping to rejuvenate some of the communities Unity serves.
"This alliance will provide opportunities for people who want to make a difference by doing business in inner-city neighbourhoods," said Brooks. "It will give people more options by encouraging entrepreneurship and a reason to stay or move into these communities."
Shell has long been committed to making a positive impact by developing programs to assist minority and women-owned businesses. As a result of this new Community Banking Initiative, Houston could experience an increase in business development and expansion that would create new jobs and skills.