First Citizens BancShares, headquartered in Raleigh, North Carolina, has unveiled a strategic partnership with various community development organizations to invest $6.5 billion in Eastern Massachusetts and Northern California. This move is part of the bank's commitment to community support following its acquisition of certain parts of the failed Silicon Valley Bank (SVB) and subsequent takeover by the Federal Deposit Insurance Corporation (FDIC) in March.
The partnership includes collaborations with groups such as the National Community Reinvestment Coalition (NCRC), Rise Economy, The Greenlining Institute, Massachusetts Affordable Housing Alliance (MAHA), and the Massachusetts Association of Community Development Corporations. These investments will be directed towards housing development, loans, and grants aimed at bolstering local economies.
First Citizens' CEO Frank B. Holding Jr. emphasized the bank's longstanding dedication to community investment. The institution's assets have grown significantly to $213.8 billion after integrating parts of SVB, which has resulted in strong deposit growth in the third quarter and an anticipated increase in profitability for the fourth quarter.
Details of the investment plan include:
- Allocating $650 million for home mortgages targeting low- and moderate-income (LMI) borrowers.
- Dedicating $2.5 billion for small business lending.
- Committing $3.5 billion for affordable housing projects' real estate development loans.
- Pledging $35 million in Community Reinvestment Act grants, featuring $10 million for a home mortgage subsidy program.
These initiatives aim to replace SVB's original $11.2 billion community benefits plan that was left unfulfilled due to its collapse. Prior to its failure, SVB had invested $3.1 billion as part of a community benefits plan linked to its merger with Boston Private Financial Holdings.
Community leaders have expressed their support for First Citizens' actions. Jesse Van Tol, CEO of NCRC, welcomed the bank's decision to honor SVB's previous commitments. Emily Haber from the Massachusetts Association of Community Development Corporations praised First Citizens' focus on small businesses and affordable housing.
Symone Crawford from MAHA acknowledged First Citizens' continuation of SVB's investments in LMI communities around greater Boston and highlighted important programs like ONE Mortgage and ONE+Boston that aim to close the racial homeownership gap.
In addition to this new initiative, First Citizens remains committed to a separate $16 billion community benefits plan derived from its 2022 acquisition of CIT Group (NYSE:CIT), further reinforcing its role as a significant contributor to community development and economic growth.
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