Tuesday, October 30, 2018
Fifth Third Bancorp (Nasdaq: FITB) announced a $2 billion increase in its five-year, companywide Community Commitment, expanding it from $30 billion to $32 billion. The $2 billion increase will be invested entirely in greater Chicago, enlarging the Bank’s local commitment from $3.6 billion to $5.6 billion. The increase in the Commitment reflects Fifth Third’s planned expansion in the Chicago-area market.
Today’s announcement represents the second increase in the Bank’s Commitment since it was originally communicated in February 2016, having been increased from $27.5 billion to $30 billion in November 2016. The $30 billion plan was developed with the National Community Reinvestment Corporation (NCRC) after in-depth consultative sessions with more than 200 community organizations. At the halfway mark (June 30, 2018), Fifth Third had delivered $17.1 billion under the plan, which runs through 2020.
“We are committed to all the markets we serve, and we’re especially focused on improving lives in greater Chicago, where we plan to expand significantly in the coming years,” said Greg D. Carmichael, chairman, president & CEO of Fifth Third Bancorp. “The Fifth Third Chicago team has worked closely with local community organizations and business associations to drive positive change for many years. This work–including the $2.1 billion the team has already delivered as part of our original Commitment announced in 2016–is inspiring. We expect to deliver the remaining $1.5 billion, plus this additional $2 billion, within the initial time frame that runs through the end of 2020.”
Eric S. Smith, regional president for Fifth Third in Chicago, said, “This additional investment reflects leadership’s confidence that we will continue our track record of strong commercial and consumer bank business. It also is a clear expression of our determination to increase and deepen our investment in greater Chicago.”
The enhanced $32 billion Community Commitment includes:
"Chicago is home to a strong civic community that works together across corporate, government and nonprofit organizations to make a difference in the lives of our residents," said Chicago Mayor Rahm Emanuel. "Fifth Third is a great example of a tremendous partner who has supported small business growth, programming for our schools and revitalization efforts that are helping improve neighborhoods across the city. The additional $2 billion further strengthens this commitment and I look forward to the positive outcomes the funding will provide our residents and communities."
John Taylor, president and founder, National Community Reinvestment Coalition, said, “The NCRC and its member organizations were pleased to be included in development and expansion of Fifth Third’s Community Commitment and its specific plans for the Chicago market. We’ve continued to share our assessment about the critical needs in this community and are eager to continue our collaboration with Fifth Third Bank to achieve the goals we have set.”
The primary goal of Fifth Third’s Community Commitment is to deliver more access and quality products and services to low- and moderate-income (LMI) and/or minority borrowers to improve lives. In lending to low- and moderate-income borrowers, Fifth Third has increased its CRA loan production in the market by 13 percent, from 28 percent of its total loan production in June 2017 to 32 percent of the same in June 2018. It also has provided $658,000 in down payment assistance to 242 families in the same time period, increases of more than 200 percent in terms of dollar volume and families helped. Fifth Third also made a $3 million investment in Neighborhood Housing Services of Chicago to increase the accessible mortgage loans to LMI borrowers.
Fifth Third invested $5 million in a revolving loan fund with IFF, a mission-driven lender, real estate consultant and developer, that helps communities thrive by creating opportunities for low-income communities and people with disabilities in Chicago. The Bank also provided financial education to over 10,000 students and invested in Chicago Public Schools to help the district reach its goal of providing equitable financial education for all students. Seventy-seven percent of students in the district come from economically-disadvantaged homes.
In support of small businesses, Fifth Third has developed a significant collaboration with Accion U.S. Networks, a Chicago-based community development financial institution, that works to expand access to capital and education resources to underserved small businesses. The Bank also recently announced a $2.5 million investment for the Entrepreneurs of Color Fund to provide vital capital access and technical assistance services that fuel business expansion, job growth, and community economic health.
Kristin Faust, president of Neighborhood Housing Services of Chicago and a member of Fifth Third’s Community Advisory Forum, said, “After many years of working with Fifth Third, I can attest that it stands behind its Community Commitment. It invested $3 million in our loan pool to create more opportunities for homeownership in Chicago, especially in the south and west sides, serving on our neighborhood boards, partnering with us to provide financial empowerment and providing continued support. I am thrilled to hear of its additional investments here in Chicagoland and know it will continue to be a great partner and lend its talents to improving the lives of all residents in greater Chicago.”
Fifth Third’s planned expansion in Chicago includes its pending merger with MB Financial, which as of today’s date, has received shareholder approval. The transaction awaits regulatory approval. The $2 billion increase in the Community Commitment is contingent upon the closing of the transaction with MB Financial, which is expected in the first quarter of 2019.