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One of New York’s biggest small banks has a new leader.

On Friday, Amalgamated Bank, the nation’s largest union-owned bank, said that it had named Keith Mestrich, the bank’s president, as its chief executive.

Amalgamated operates in the shadows of the likes of Citigroup and JPMorgan Chase, but the community bank has an outsize presence in corporate governance issues.The bank is the largest manager of union pension funds in the country, making it a big player in the progressive movement and a vocal supporter of shareholder rights.

Mr. Mestrich, who spent much of his career working with labor unions and nonprofit organizations, said his experience and progressive outlook put him in a special position compared with other bank executives.

“Maybe it’s not the most natural step in my career, but it’s the right place to be,” he said. “I’m looking forward to being able to help craft a vision that helps serve that community.”

Part of that vision involves expanding the bank’s core constituency beyond unions to include progressive advocacy groups. The bank is also aiming to build up its relationship with the Democratic Party, which Mr. Mestrich helped push when he joined the bank in 2012 as director of its Washington office.

“There’s no way for the bank to have a bigger presence and grow more quickly than in Washington,” he said. Under his leadership, he added, the bank has more than doubled its deposits in Washington, from $79 million in 2012 to more than $200 million as of the end of July.

In the next few years, the bank intends to expand its reach further into Washington, as well as New Jersey and California.

Noel Beasley, the bank’s chairman and president of the labor union Workers United, described Mr. Mestrich as a “progressive warrior” with a passion for serving customers. “We are thrilled to have such a talented and unique individual at the helm as we build on our current strengths and chart our course for the future,” he said in a statement.

Mr. Mestrich, who took over the chief executive role on Wednesday, will succeed Gabriel Caprio, the bank’s interim chief executive. Mr. Mestrich will also continue to serve as the bank’s president.

Founded in New York in 1923 by the Amalgamated Clothing Workers of America union to make loans to struggling apparel workers, the bank has long depended on unions and pension funds to make up a large part of its business.

The bank, which has 24 retail branches, including 20 in New York, gained particular attention during the Occupy Wall Street movement after one of its branches near Zuccotti Park, the hub of demonstration activities, hung a banner showing its support. Occupy Wall Street then set up a bank account at Amalgamated, as did many of the movement’s supporters, who had pulled their deposits from big banks. Deposits at Amalgamated surged.

However, the bank also ran into regulatory issues after the Federal Deposit Insurance Corporation and the New York State Banking Department ordered the bank to raise fresh capital and bring its capital ratio to 7 percent after it had fallen to 6.2 percent.

Soon after, the billionaire investor Wilbur L. Ross Jr. and Ronald W. Burkle, a supermarket magnate, each invested about $50 million in the bank. The financiers now hold roughly 36 percent of the bank, which has $3.7 billion in assets, with its trust department managing or serving as custodian for $37.9 billion in assets. Workers United, part of the Service Employees International Union, still owns a majority stake in the bank.

Even as Amalgamated focuses on growing its customer base, it has not lost sight of New York.

The bank has teamed up with the New York City Economic Development Corporation on an affordable loan program intended to help immigrants with training and certification for better paying jobs. More recently, Amalgamated’s board approved setting aside a portion of the bank’s loan portfolio to support affordable housing in New York.

“Nothing is more important to the bank than our relationship to New York City,” Mr. Mestrich said.