Stars Buy Majority Stake in Minority Bank
Earvin “Magic” Johnson, Janet Jackson and record-industry executive Jheryl Busby said Wednesday they have purchased a majority stake worth nearly $3 million in Los Angeles-based Founders National Bank, the only African American-owned and operated commercial bank in California.
The former Laker, the singer and the executive bought the 51% stake in March from Leon Garr, Founder’s former controlling shareholder and grandfather to Carlton Jenkins, the bank’s current chairman, president and chief executive. Garr is 83.
“We’re extremely pleased to be part of Founders National Bank,” the three said in a joint statement. “We look forward to carrying on the bank’s strong and admirable heritage and continuing to best serve the people of Los Angeles.”
The three have formed the JJB Partnership, and Busby will be general partner. Busby, formerly president of Motown Records and currently a senior executive at DreamWorks SKG records unit, will continue to serve on Founders’ board, which he joined in 1997. The partnership will be “actively involved in a myriad of civic, charitable and corporate affairs benefiting area residents,” the three said.
Formed in 1991, Founders has grown to about $100 million in assets and has five branches: one in Lynwood, one in Compton, two in South-Central Los Angeles and one downtown. Primarily a consumer and small-business lender in Los Angeles, the infusion by such high-profile investors will enable the bank to expand its lending capabilities into new areas, such as the music industry or movies, Jenkins said.
“Janet, Magic and Jheryl have validated that this little bank is safe and sound and run by people who know what they are doing,” said Jenkins, 42. “I can’t think of a more exciting threesome.”
It also helps the entire community, Jenkins said: “South-Central and East Los Angeles produce many fine and respected professionals, athletes, musicians, artists, businessmen and more.
“When those people return to the city to ‘give back’ in the way that Earvin Johnson, Janet Jackson and Jheryl Busby have in their involvement with Founders, that’s when our city, as a whole, moves forward,” Jenkins said.
Wayne-Kent Bradshaw, president of black-owned Family Savings Bank in Los Angeles, praised the deal as good for the black community. Bradshaw said the community can best be served by grouping successful institutions or individuals to attain a critical mass.
“I’m very, very happy to see that happen,” he said of the Founders deal. “That’s very consistent with the image that we have of how to succeed in the community--the joining of parts. In that case, it’s the joining of successful individuals.”
Formed in 1948, Family Savings is primarily a mortgage lender with four branches and $170 million in assets.
The other preferred stockholders in the privately held Founders include Arco Foundation of California, Bankamerica Capital Investments, Automobile Club of Southern California and its Interinsurance Exchange, Sumitomo Bank of California, Citicorp North America and Shell Community Financing Co. of California.
Times staff writer Lee Romney contributed to this report.