OneCalifornia Community Development Banking Report }2008 Year End
Does your bank connect
B A N K
O Becoming OneCalifornia: Uniquely Structured For-Benefit
neCalifornia Bank is a dynamic combination
of social philanthropy and social entrepreneurship
distinguished by a corporate structure unique among
Tom and Kat donated 100% of their Class B holdings
to OneCalifornia Foundation. By definition, the
Foundation is also a federal thrift holding company be-
federally chartered financial institutions. In this report, cause it owns more than 25% of a class of stock of
we take a look at this innovative structure, how it works a bank holding company. The Foundation maintains
to realize the mission as envisioned by OneCalifornia’s the rights to the economic benefits of the Bank.
founders, and achievements of the first 16 months.
B A N K Founders’ Further Gifts to the Foundation
OneCalifornia fits naturally with a new class of enterprises Tom and Kat also donated 100% of their reim-
that join efforts among the private, nonprofit and bursement of the Bank’s pre-opening expenses,
ONE SUCCESS government sectors. These enterprises measure their $2.4 million, for Foundation operating expenses and
worth in triple bottom lines. Known as hybrids, social further Bank capital needs. In autumn of 2008,
AT A TIME TM enterprises, for-benefit or fourth sector,* they address they donated approximately $26 million of their
what President Obama defined in his inaugural speech ownership interest in Farallon Capital Management.
as a “new era of responsibility.” The proceeds from this gift will be used over time
On the cover: Highlights of to fund the mission of both the Bank and the
OneCalifornia’s first 16 months A FDIC-insured Community Development Bank Foundation.
at 1438 Webster Street in OneCalifornia Bank, FSB, integrates its social mission
Oakland — September 2007 with environmental and business sustainability to produce A Brief History & Overview of Operations
through December 2008. both social benefits and sustainable profits. The Bank’s The OneCal organizing team studied the socially-
mission is to improve economic opportunity for low- to responsible ShoreBank and Nobel Peace Prize
moderate-income communities throughout California. winner Dr. Muhammad Yunus’ Grameen Bank
Below: At OneCalifornia Bank’s and examined community development banks,
opening reception in September Founded with an Empowering Vision thrifts and credit unions. The team innovated
2007, the crowd enjoys listening The Bank began operating as a federally-chartered the distinct corporate structure and developed a
to a lively rendition of “I Hope thrift in June 2007 with $22.5 million in patient capital focused business model for the Bank. The team
You Bank,” sung by OneCalifornia provided by Tom Steyer and Kathryn Taylor, social decided the support of local businesses and non-
co-founder Kat Taylor. philanthropists who believe strongly in the use of capital profits would provide a more solid basis for neigh-
and financial literacy as the “freeing and borhood stabilization and economic growth.
empowering agents” for change in low-
wealth communities. Kat and Tom retain Having begun operations in Oakland in June 2007
mission focus and control, but will take no in temporary offices, the Bank opened headquarters
economic benefit or repayment ever from on Webster Street in September 2007 and the
their investment. Here’s how it works: Foundation opened offices next door. OneCal is
capitalizing on its unique structure with innovative
OneCalifornia Bank has two projects and products.
The Bank provides commercial loan and deposit
products and services delivered by experienced re-
& OneCalifornia Foundation
lationship-focused bankers to businesses, profes-
sional firms and nonprofit
OneCal BanCorp, a mid-tier holding com-
organizations. The Bank
pany, owns 100% of the common stock of the
Bank. OneCal BanCorp issued two classes of
The Founders also offers robust cash
Cover, clockwise from top: 5th stock to Tom and Kat: $1 million of Class A vot- maintain normally found at much
graders at OneCal’s March 2008 ing shares and $21.5 million of Class B non-vot-
Chabot Experience; October 2007 ing economic shares with Kat Taylor owning 51% mission focus larger regional banks. The
Bank serves unbanked
Rebuilding Oakland Together of total shares issued. The Class B stock carries
homeowners and OneCal dividend rights when and should OneCal Bank
and control, and under-banked indi-
viduals through strategic
volunteers; OneCal staff this decide to declare a dividend. This structure still but will take alliances with organiza-
past September; Robert Wilkins allows a vehicle for later-stage capital rounds.
(left), Executive Director of East no economic tions and businesses that
bank at OneCal.
Bay YMCA, and Michael Bush, OneCalifornia Foundation, a senior holding
President, The MattMar Group, company, was created by Tom and Kat as a nonprofit
The Bank stresses financial
at OneCal’s “Let’s Stay Together” 501(c)(3) entity to support the Bank in meeting repayment literacy across its client
celebration at Fox Theater with its triple bottom line. This is accomplished in a
performances by Al Green and variety of ways, including performing research ever base and works with the
Michael Bush, January 2009; and development on products, social outcome
September 2008 opening of measures, marketing, community support, strategic
from their and other community-
based organizations in
the Iu Mien Buddhist Temple; alliances with community based organizations investment. delivering programs to
merchant Temra Costa (right) of and providing credit enhancements.
Community Alliance with Family
Farmers at May 2008 Oakland * “Fourth sector” refers to a new paradigm in organizational design which blends
Indie Awards. social and environmental aims with business approaches using best practices and innovative models from three traditional sectors: business, nonprofit and government. 2
Realizing the Mission: Successful Joint Efforts of the Bank, Foundation & Partners
Developing and hosting of Internet commerce Chabot Space & Science Center Experience
site for local small business merchants & artists.
Partnering with Chabot Space & Science Center and local
businesses to sponsor a field day for inner-city students.
79 in 2008—5% of all Oakland public school 5th graders.
Goal for February 2009 Experience: 150
Transportation, learning programs & lunch provided.
Left: Perla Cantu (center), a Mills College
student and East Bay College Fund Scholar,
mentors 5th graders from Oakland Public
merchant Numi Tea
Schools on a OneCal-sponsored field trip
at Oakland Indie
to Chabot Space & Science Center, March
Awards, May 2008.
2008. Here the students testing their
marshmallow and toothpick structure on
Oakland Indie Awards
an earthquake table.
Sponsoring & managing annual event to
celebrate the social and environmental impact of Below: Experience on the Green, an event
Oakland’s independent businesses and at the Oakland Museum of California, co-
artists to focus attention on local sustainability. sponsored by OneCal in September 2008.
Wall Street Wizards Checking/Savings
Provided free checking and savings accounts These
for inner-city high school students enrolled in
Wall Street Wizards, which offers students a
strong fundamental understanding of the for
financial markets and stock investing.
Subprime Crisis Strategies &
Developed early-on strategies to address projects
homeowners on a pre-foreclosure basis.
with Financial Literacy Training
Mission-Related Deposits partners Designed & delivered training for inner-city
Developed innovative uses of deposits high school graduates attending college under
for funding of savings and lending programs
were the East Bay College Fund program.
Cestas Populares Lending Program OneCal SAFE
Partnered with Mission Asset Fund for Working with 24 community-based
development and roll out of first-of-kind OneCal Bank organizations to provide fair and transparent
program to help members of an ethnic & day-to-day banking products to the unbanked
community in creating credit and under-banked who complete financial
histories with reporting agencies. Foundation. literacy classes with OneCalFoundation.
“Bank on Oakland” Acorn to Oaks Program
Working with City of Oakland on their program Working with San Antonio CDC, the Annie E.
to open up access to bank depository accounts. Casey Foundation and Making Connections
Oakland to provide savings accounts to
children in the San Antonio Head Start Program.
Staff & Board Outreach
Providing time for lectures, programs and panel discussions Rebuilding Together Oakland
at community events focused on local econommic issues,
community development, how to obtain credit, etc. Sponsored a residential rehabilitation in
East Oakland for RTO, including
materials provision and two weekends
OneCal Community Connects of volunteer time by OneCal staff & friends.
Bringing speakers and events to the Oakland Community.
Presentations by Geoffrey Canada of Harlem Children’s
Zone were attended by 400 Bay Area community leaders.
Establishing Banking Relationships: Financing What Works for Community
The lending and deposit gathering activites of OneCal Bank have Building the Balance Sheet
established important banking relationships with many key organi-
zations and businesses which have an impact on or provide needed OneCal Bank has steadily gained traction in
services to the community. building its balance sheet.
A Brief Recap of OneCal Bank Relationships: Mission-related Lending
Financing, depository and cash management services for: 71% of our loans are to women & minority-owned
businesses, nonprofit organizations and businesses
}Numerous faith-based organizations. located in low-wealth communities.
}Transitional housing and workforce development for formerly
incarcerated men. Capital
}A major religious-affiliated foundation which provides benefit The Bank operates well above the levels that
programs for mentally-challenged individuals.
banking regulators have deemed well capitalized.
}A major institution for science education which provides programs
for schools and families and inspires a shaping of the future
through science. The portfolio at a glance December 31, 2008:
Financing for: Loans Outstanding: $24.4 million
}A minority-owned contractor and one of the largest commercial 53% to Nonprofit Organizations
solar installations in the City of Oakland.
30% to Small Business
}Housing and programs for a nonprofit which provides housing
17% to Green Business
and programs for individuals undergoing drug rehabilitation.
}Local, privately-owned business which is one of the largest }Nonprofits 30%
employers of women and minorities. $12,912,000 53%
}The first Iu Mien Buddhist Temple in the U.S. and the adjacent }Small business 17%
cultural center. $7,308,000
}One of the largest Northern California minority-owned fast food }Green business
Deposits: $32.4 million
}Acquisition of a new multi-ethnic facility for a community
foundation located in the San Antonio neighborhood, working 51% from Businesses
with the Northern California Community Loan Fund (non-bank
28% from Nonprofits
}A four-year technical college. 21% from Individuals
}A women minority doctor to establish her new practice. 28%
}A woman and minority business owner to expand her $16,523,000
business at the Oakland Airport. }Nonprofits 21%
Depository services for:
}Numerous large prominent affordable-housing developers. $6,804,000
}A large community foundation. OneCal Bank and
the community foundation are exploring other
programs for joint sponsorship/development/financing.
}A private foundation that provides scholarships for
East Bay public high school student from low-income
families to attend college.
}Numerous community-based organizations.
Alan and Ray Dones of SUDA on the rooftop
solar installation of Alameda County Social Services
Headquarters at Thomas Berkeley Square.
OneCal Bank financed the solar panels and installation
—the largest in downton Oakland. 4
Financial Literacy: Innovation, Collaboration & Community
C Helping People Build & Improve Credit Histories
estas Populares, an innovative project of
the Mission Asset Fund (MAF) in San Francisco and
OneCal Bank, is bringing traditional informal lend-
Above: Prospective first-time homebuyers
ing circles into formalized modern banking. People ecause the practice of saving money attend a workshop at The Unity Council’s
who have long been accountable to one another are doesn’t come easily for all families and needs to Home Ownership Center (HOC), which
establishing credit histories and opening up their op- be learned, Acorns to Oaks starts the habit provides bilingual training for participants
portunities for lower-cost financial services. “Cestas young. This inventive and unique program of to improve their budget and credit profiles,
Populares bridges two worlds—the banking world OneCal Foundation, OneCal Bank, San Antonio shop for a mortgage loan and maintain
and an informal social practice based in trust,” says CDC, Annie E. Casey Foundation, San Antonio their home and finances after purchase.
José Quiñonez, Executive Director of MAF. Neighborhood Network and Making Connec- OneCal partners with HOC by presenting
Throughout Latin America and in immigrant tions Oakland inspires parents participating information about banking services and
communities in the U.S., lending circles may be called with San Antonio Head Start to save for their IDAs (Individual Development Accounts),
Cestas, Tandas or Sans. Bonded by trust, circle mem- children’s future. which help people save through matching
bers participate in a cycle of lending and borrowing. OneCal Foundation will match up to $450 grants provided by a variety of sources,
At a monthly meeting around a kitchen table six people of the savings and provide financial literacy edu- including government and private sector.
may each contribute $100. One person borrows the $600 cation. Families attend workshops about basic
that month and everyone eventually gets a turn at re- banking services, creating budgets, understanding Financial Literacy, through presentations at
ceiving. Loans are repaid by the monthly contributions credit reports and using credit. As of December meetings, tutorials or personal and online
of each participant in the group. Groups set the contri- 2008, 32 families have committed to saving for training, is integrated into other OneCal
bution amount according to their comfort level and their children’s future through this program. project and programs, such as Cestas
determine the loan order, perhaps by drawing num- OneCalifornia is proud and happy to help these Populares, Acorns to Oaks and Oakland
bered slips of paper from a basket. families make change count for a better future. Unwrapped!, all profiled on this page.
A study by Social Compact found that 44% of all
families in San Francisco’s Mission District have no Visit the Acorns to Oaks partners: Below: Gabrielle Lessard , owner of
credit histories. In informal lending, borrowers who repay www.sacdc.org Mangosteen, takes a break on her travels
faithfully aren’t establishing credit scores, because www.aecf.org where she looks for Fair Trade imports.
this lending is not formally reported into the credit www.sannoakland.org She sells the unique products through
bureaus. By having their good credit history reported, www.onecalbank.com OneCaliifornia’s Oakland Unwrapped
people can avoid high-cost, predatory lending. www.onecalfoundation.org Online Marketplace.
Now, rather than lay dollars on a kitchen table, Cestas
Populares participants contribute through check-
ing accounts at banks of their choice. OneCal Bank
Growing local, sustainable business
debits the accounts through ACH (Automated Clear-
ing House), an electronic network for U.S. financial Oakland Unwrapped! is OneCalifornia’s Online
transactions. Loan payments are reported and cash Marketplace for local businesses and artists. It
flows to MAF. MAF makes electronic deposits to the now offers more than 100 stores. Site visitors tripled
accounts of the next borrowers. from October to December 2008.
Groups meet at homes or at MAF, which facilitates This means more easy ways for our community
group dynamics and provides education about credit members to support the local economy and more
scores and other financial literacy. The MAF/OneCal part- traffic to the local sellers. Items on Unwrapped!
nership enables lending circles to thrive in the best of Marketplace include kids toys and clothes, locally-
both worlds: retaining the trust of the informal practice designed clothing, books from independent sellers,
while gaining new access to a broader array of financial housewares and decor, Fair Trade items, jewelry,
services and capital. Members choose how to use the fine art, chocolate, wine, coffee, tickets to a variety
loans— for bills, repairs, paying down high-rate credit. of cultural venues, art and dance classes and much more!
“Many people feel locked out of the financial system,” One of our new sellers is Mangosteen, a purveyor of Fair Trade imports
Quiñonez says. “This program provides incentive for and handmade jewelry. Mangosteen was launched by Oakland resident
participants to open bank accounts. And it provides a Gabrielle Lessard, an attorney, community development leader, jewelry
way to build and improve credit history. Credit scores designer and photographer. Gabrielle started Mangosteen to share the
have morphed into something more than just to deter- wonderful things she discovers when traveling, and to support communities
mine credit worthiness. People, nowadays, need a good and causes in the regions where she finds these goods. Mangosteen offers
credit score even to get an apartment.” It may take clothing, housewares, jewelry, bags and accessories, most of which pro-
year-long participation in Cestas Populares to real- vides income to survivors of human trafficking, to young women in their
ize anticipated results, but participants can continue to home villages and to Tibetan Buddist Nuns living as refugees in India.
enjoy their monthly gatherings and build social capital, Meet Gabrielle at www.mangosteenoakland.com.
while gaining better understanding of the credit market.
Learn more: www.MissionAssetFund.org Support local businesses: www.OaklandUnwrapped.org. 5