Bank of America said Monday that it took equity stakes in four minority-owned and community development banks, adding to a trio of such investments made last month as part of a $1 billion plan to address racial and economic inequities intensified by the COVID-19 pandemic.
The second-largest bank in the U.S. acquired about 4.9% of common equity in CSB&T Bancorp, Inc., the parent company of Nashville-based Citizens Savings Bank and Trust, and in Unity National Bank of Houston, N.A. Both banks are designated Minority Depository Institutions, meaning at least 51% of stock is owned by one or more socially and economically disadvantaged individuals.
Bank of America also completed identical investments in Community Development Financial Institutions M&F Bancorp Inc. in Durham, North Carolina, and in Southern Bancorp, Inc. in Little Rock, Arkansas. Such private institutions are dedicated to creating economic opportunity, quality affordable housing and essential community services.
“We are pleased to provide equity capital to these institutions so they can continue to serve their communities well,” Bank of America CEO Brian Moynihan said. “We expect to complete more of these investments over time.”
The latest quartet of investments follows three others revealed by the bank Sept. 8, as it dedicated a $50 million portion of its larger $1 billion commitment to supporting lending, housing, neighborhood revitalization and other community banking needs through MDIs.
The bank made those direct common equity investments of approximately 5% in the holding companies for First Independence Corporation in Detroit; Liberty Financial Services, Inc. in New Orleans; and SCCB Financial Corp. in Columbia, South Carolina.
At the same time, Bank of America said it would make $200 million in direct equity investments in Black- and Hispanic-owned businesses, and devote $25 million each to grant funding supporting jobs initiatives and to community outreach and initiatives.
The bank has yet to divvy up the remaining two-thirds or so of its four-month-old commitment, which involves spending $1 billion over four years to assist people and communities of color that have been hardest hit by the coronavirus. The standout commitment came as U.S. financial institutions began to emphasize corporate philanthropy in the wake of the pandemic and civil unrest sparked by the police killing of George Floyd, a Black man, in Minneapolis.
PNC Financial Services in Pittsburgh, for example, followed the bank with a promise to spend more than $1 billion on efforts to invest in Black and low- and moderate-income communities.
More recently, Citigroup on Sept. 23 unveiled a $1 billion, three-year pledge to fund strategic initiatives aimed at closing the country's racial wealth gap. The Big Four U.S. banks estimated that systemic racism caused the loss of $16 trillion in gross domestic product over the last two decades.
Bank of America has looked to other means of funding such efforts, as well.
Last Friday the Charlotte, North Carolina-based institution said its holding company became the first in the U.S. to issue a bond that designates a social portion to financially bolstering Black and Hispanic-Latino communities. The $2 billion Equality Progress Sustainability Bond will fund projects supporting racial equality and economic opportunity, as well as the transition to a low-carbon economy.