A Chicago-based bank run by Dr. Bill Winston, the head of Living Word Christian Center in Forest Park, was recently told by the Federal Deposit Insurance Corporation (FDIC) that it needs to come up with an additional $2 million in capital in the next 60 days.
Crain’s Chicago Business reported on Monday that Covenant Bank, located in Lawndale on the West Side of Chicago, currently has $69 million in assets. Based on a consent agreement that the bank entered into with state and federal regulators on June 6, it needs to add at least $2 million to its base of capital. The article also notes that the amount far exceeds capital that regulators generally require banks to have.
Winston is the founder and chairman of Covenant Bank, which was created after his holding company Covenant Bancshares, Inc. purchased Community Bank of Lawndale in 2008.
Covenant’s mission has been to provide “faith-based banking” and to teach fiscal responsibility, according to an email from Kim Clay, a spokesperson for Living Word, who acted as liaison between the Forest Park Review and Herman Davis, Covenant’s president. The email also noted that Covenant is committed to “[rebuilding] distressed communities [and] economic empowerment.”
Covenant is currently undergoing capital raising efforts to come up with $5 million, and is not taking a “small-investor approach,” Crain’s quoted Davis as saying.
Clay’s email noted that the abovementioned initiatives, as well as commitment to “grow the bank for our shareholders, will require additional capital.”
Crain’s reported that Covenant is not profitable: it posted a $372,000 loss last year and $226,000 in losses in the first quarter of this year. What’s more, Davis told Crain’s that the bank needs to increase its overall assets to $100 million to become consistently profitable.
In addition to chairing Covenant, Winston owns and presides over the 19,000-member Living Word mega-congregation; The Joseph Business School, a Christian entrepreneurial university in Forest Park; the Forest Park Plaza, and other real-estate.
Neither Winston nor Davis could be reached directly for comment.