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Thursday, Sep 28, 2023


Founders National Bank could evolve into the nation’s most unusual inner-city bank under its new controlling owners former basketball star Earvin “Magic” Johnson, pop singer Janet Jackson and record industry executive Jheryl Busby.

Rather than catering to lower-income families and small businesses, as most inner-city community banks do, Founders may now look to broaden its offerings to include banking services for entertainment-related businesses and performers, said Jeff Tisdale, a lawyer who represents the three partners.

Johnson confirmed that the bank will look to attract more investors and market the products and services better, but he stressed that the institution won’t divert from inner-city banking.

“There’s a lot between athletes, entertainers and business people who haven’t put any money in the bank and we’ll try to get them to (do so),” Johnson said. “But we’re going to help the small-business person. We’re not going to change anything, but add more assets.”

Under the deal that surfaced last week, a limited partnership comprised of Johnson, Jackson and Busby purchased a 59.5 percent stake in Founders Bank for about $2.7 million. Fifty-one percent of that stake was purchased from Leon Garr, a real estate entrepreneur who was one of the bank’s founders in 1991.

“It’s a great business deal,” Johnson said. “The bank is a great institution. It’s been around a long time in the community. It serves a great purpose for everyone there. They needed a little boost. Between the three of us, we’ll give it a boost.”

John Bryant, founder of the non-profit investment banking organization Operation Hope, said the move bodes well for inner-city banking.

“It’s definitely a step in the right direction and sends a message to mainstream America,” Bryant said. “To the extent these are enlightened business people who happen to be African American, the hope is they’ll be more receptive and compassionate to people who have financial issues with respect to credit.”

Founders has a $100 million asset base. While the bank is sound, it hasn’t been very profitable in recent years, said Warren Grant, the business manager for all three partners.

“By focusing on the core business, there’s an opportunity to improve earnings and expand,” Grant said.

Busby, the former president of Motown Records who recently became a senior executive at DreamWorks SKG’s record unit, will continue to serve on the bank’s board, which he joined last year.

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