CINCINNATI--(BUSINESS WIRE)--Fifth Third Community Development Corp., a wholly owned subsidiary of Fifth Third Bancorp, has announced it is investing an additional $2.5 million in Detroit-based First Independence Bank. The move makes Fifth Third the largest investor at a total of $5.5 million in the minority depository institution and community development financial institution (CDFI).
“CDFIs are critical to creating and preserving wealth in minority communities,” said Kala Gibson, Fifth Third Bank’s head of business banking and chief enterprise corporate social responsibility officer. “It is imperative that larger financial services institutions support these organizations to ensure their viability and longevity.”
“We are proud to strengthen our partnership with Fifth Third Bank through this additional investment. The confidence shown in First Independence Bank will allow us as a minority depository institution to further strengthen communities that we have served for more than 51 years,” said Kenneth Kelly, chairman and CEO of First Independence Bank. “The courage of the leadership team at Fifth Third to increase their investment in First Independence Bank is the epitome of speaking about inclusion and demonstrating inclusion in a tangible manner.”
As defined by the FDIC, a minority depository institution may be a federal insured depository institution in which at least 51% of the voting stock is owned by minority individuals; or a majority of the board of directors is minority and the community that the institution serves is predominantly minority. Ownership must be by U.S. citizens or permanent, legal U.S. residents to be counted in determining minority ownership.
Fifth Third has been First Independence Bank’s primary correspondent bank, managed out of Fifth Third’s Financial Institutions Group, which provides correspondent banking and treasury management services to financial institutions of all sizes. As part of this latest investment, which follows a $3 million investment made in 2008, Fifth Third also intends to support First Independence Bank through loan participation and coordinating financial literacy training for First Independence Bank’s customers.
“This deal has the potential to create income-producing assets up to 10 times the amount of the investment, which means Fifth Third’s investment could result in the origination of more than $50 million in new loans for both existing and new, consumer and business relationships,” said Keith Burgess, senior vice president and group head of Community Development Lending and Investments. “First Independence Bank could use the proceeds to invest in personnel, technology and physical assets which will provide a better banking experience for its customers.”
When well-established financial businesses like Fifth Third invest in minority depository institutions, jobs are preserved in minority communities, which helps to sustain the economy. Because of their trusted reputations, minority depository institutions play an important role in bridging the wealth gap by being effective at serving underserved and underbanked communities. They also tend to invest a significant amount of their deposits in community development assets when compared with traditional financial institutions. These community investments support affordable housing, support small businesses, stabilize communities and meet the financial needs of individuals where they are.
Fifth Third’s recent investment is part of the Bank’s $2.8 billion Accelerating Racial Equality, Equity and Inclusion initiative that was introduced in 2020 with a specific focus on the Bank’s Black employees, customers and communities. The money directly aligns with the community workstream of the AREEI strategy and becomes another channel for Fifth Third to show its support for minority communities. It also demonstrates the Bank’s commitment to doing work that is part of Project REACh, an initiative launched by the Office of the Comptroller of the Currency to strengthen minority depository institutions and remove barriers to financial inclusion.
“First Independence Bank recognizes the mutual benefits of the partnership with Fifth Third and its AREEI strategy,” said Dimitrius M. Hutcherson, executive vice president, chief administrative officer and chief technology officer at First Independence Bank. “Its investment will allow us to expand and grow our branch services and capabilities to better and more broadly serve our customers in areas such as financial investment education, home ownership pathways, small business loans and investing for individuals and families.”
To learn more about First Independence Bank, visit www.firstindependence.com. To learn more about Fifth Third’s Accelerating Racial Equality, Equity and Inclusion initiative, visit www.53.com/racialequity.
About Fifth Third
Fifth Third Bancorp is a diversified financial services company headquartered in Cincinnati, Ohio, and the indirect parent company of Fifth Third Bank, National Association, a federally chartered institution. As of March 31, 2021, Fifth Third had $207 billion in assets and operated 1,098 full-service banking centers and 2,383 ATMs with Fifth Third branding in Ohio, Kentucky, Indiana, Michigan, Illinois, Florida, Tennessee, West Virginia, Georgia, North Carolina and South Carolina. In total, Fifth Third provides its customers with access to approximately 53,000 fee-free ATMs across the United States. Fifth Third operates four main businesses: Commercial Banking, Branch Banking, Consumer Lending and Wealth & Asset Management. Fifth Third is among the largest money managers in the Midwest and, as of March 31, 2021, had $464 billion in assets under care, of which it managed $58 billion for individuals, corporations and not-for-profit organizations through its Trust and Registered Investment Advisory businesses. Investor information and press releases can be viewed at www.53.com. Fifth Third’s common stock is traded on the Nasdaq® Global Select Market under the symbol “FITB.” Fifth Third Bank was established in 1858. Deposit and Credit products are offered by Fifth Third Bank, National Association. Member FDIC.
About First Independence Bank
First Independence Bank is the seventh-largest African American-controlled commercial bank in the United States. It offers a variety of high quality banking services from managing accounts to personal loans, mortgages, consumer education and investments. First Independence Bank has three locations and offers banking solutions online and digitally through its mobile app. Established in 1970, the bank continues to be a responsible leader, efficiently serving the financial needs of its community, its businesses and its customers nationwide. First Independence Bank is a member of FDIC and an Equal Housing Lender. For more information, visit firstindependence.com.