Fifth Third Bancorp on Monday announced plans to increase its community development pledge by $2 billion, to a total of $32 billion, as the Cincinnati company looks to expand in Chicago.
The expansion marks the second time in two years that Fifth Third has upped its pledge to invest in underserved neighborhoods. In partnership with the National Community Reinvestment Coalition, Fifth Third in February 2016
Under the plan announced Monday, Fifth Third will invest an additional $2 billion in the Chicago area. The additional investment is contingent upon the closure its
“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,” Greg Carmichael, Fifth Third’s chairman and CEO, said in a press release. "The Fifth Third Chicago team has worked closely with local community organizations and business associations to drive positive change for many years."
Under its original community development plan, announced two years ago, Fifth Third pledged to invest $3.6 billion on community development in Chicago, according to Carmichael. With its latest announcement, the company will increase its citywide pledge to a total of $5.6 billion by 2020.
“This additional investment reflects leadership’s confidence that we will continue our track record of strong commercial and consumer bank business,” said Eric Smith, Fifth Third’s regional president in Chicago, in the release.
Fifth Third currently has just over 130 branches in Illinois, according to Federal Deposit Insurance Corp. data. In total, it has 1,152 full-service locations.
The investment comes after Fifth Third in January regained its “outstanding” rating on its biennial Community Reinvestment Act examination for 2014-2016 time frame. The company had previously received a downgrade to “needs to improve” for 2011-2013 time frame, which restricted its ability to buy banks.
Shortly after that prohibition was lifted,
Under the program announced Monday, Fifth Third plans to invest roughly $200 million to expand access to mortgages, through a mix of down-payment assistance and loans backed by the Federal Housing Administration.
Roughly half of the additional $2 billion commitment will go toward small-business lending, including the launch of a digital platform that will provide faster loan decisions and a “second-look process” for customers who may not initially qualify for loans.
Fifth Third also plans to provide loans to nonprofit and government entities, and will evaluate potential investments related to the Opportunity Zone tax incentives, according to the release.
John Taylor, president and founder of the National Community Reinvestment Coalition, said his organization is "eager" to continue its collaboration with the $142 billion-asset Fifth Third.
“The NCRC and its member organizations were pleased to be included in the development and expansion of Fifth Third’s community commitment and its specific plans for the Chicago market,” Taylor said in the release.
