NEW YORK -- Lisa Johnson fidgeted in the cold yesterday as she waited in line to collect her money from Freedom National Bank, a symbol of black financial empowerment that ceased to exist yesterday.
"My concern isn't about my money," said Ms. Johnson, an office worker at New York Telephone. "It's about my community. You close down this bank, you're taking out the only bank that keeps its money in the community."
Other depositors waiting in line echoed that sentiment -- that Freedom National, which was the fourth largest black-owned bank in the nation, was not just a business. Rather, it was part of the neighborhood, a Harlem institution whose original investors in 1964 included baseball star Jackie Robinson.
"I feel real bad," said Vivian Sterling, a white-haired woman who wobbled on a folding grocery cart she used as a walker. She said she had kept her money in Freedom National for more than 20 years. "It's the only black bank in the vicinity of Harlem. Now we have to go someplace else to deposit our money."
The Federal Deposit Insurance Corp. began paying off depositors
when the doors opened about 9:30 a.m. yesterday, after a last minute-attempt by Harlem religious and social leaders to keep the bank alive withered.
The federal government declared the bank insolvent Friday after several years of accumulating losses caused by bad loans and mismanagement. With the region's economy deteriorating, prospects for the bank's recovery appeared bleak.
"The bank was unsuccessful in obtaining additional capital, and losses mounted, exhausting the bank's capital and resulting in insolvency," the comptroller of the currency said Friday in announcing the federal takeover.
Among the nation's 13,200 federally insured savings institutions -- about 200 of which fail each year -- Freedom National's $101.9 million in assets made it a relatively small player.
But in Harlem, where residents recall the traditional discrimination of the credit markets and complain that they still have difficulty getting loans, Freedom National was a powerful symbol of their independence.
"Since its founding in 1964, Freedom has served as the financial backbone of the Harlem community at a time when few other institutions showed much interest in doing business there," said Mayor David N. Dinkins, a Harlem resident.
Depositors began gathering outside the bank at 4 a.m. yesterday. By mid-morning, the line of nearly a thousand people extended for more than 100 yards along 125th Street, under the marquee of the legendary Apollo Theater, which was refurbished several years ago with a loan from Freedom National.
Some regarded the news as a sudden death in the family.
"It was a shock," said Elgenia Mitchell, who was wrapped in several layers of coats as she sat in line on a portable chair.
"I feel it is important that we have something positive in the neighborhood, something positive for minorities," said Martha Webb, an account holder.
Federal officials said the bank, whose management had changed several times in the last four years, had lost $4.7 million in the last two years and was headed toward $2 million in additional losses this year.
"A smaller bank is at greater risk because the nature of its business is small businesses," said Richard T. Greene, president of the Carver Federal Savings Bank, a Harlem savings and loan that is New York's only remaining black-owned savings institution.
"In communities such as this," he said, "you have a lot of small businesses, and they are at more risk."