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John Zimmerman, Fifth Third Bank's senior vice president for marketing in the region John Zimmerman, Fifth Third Bank's senior vice president for marketing in the region Courtesy Photo

Fifth Third commits $30 billion to community development projects

BY Sunday, November 27, 2016 04:06pm

Fifth Third Bank’s $30 billion corporate commitment over the next four years for community development offers a massive pool of money for West Michigan organizations to potentially tap to fund projects and initiatives.

The funding pledge from the Cincinnati, Ohio-based Fifth Third (Nasdaq: FITB) will go toward mortgage lending for low- and moderate-income people, initiatives to support projects such as affordable housing and housing rehabilitation, small business lending and microloans, and philanthropy.

While Fifth Third did not makes specific allocation targets or funding caps for individual markets within in its 20-state footprint, the $30 billion commitment will enable Pat Lonergan to reach out further in West Michigan regarding community development initiatives.

“Within the community, there’s a little bit more appetite to look at things that we have not done before,” said Lonergan, a senior vice president who manages community and economic development for Fifth Third Bank in West Michigan. “The dollars are going to go to where the need is and also to where the opportunities are.”

Early this year, Fifth Third Bank initially committed $27.5 billion to community development through 2020. The corporation this month increased that commitment to $30 billion.

As the third-largest market for Fifth Third Bank, West Michigan will see its “fair share” of the money, said John Zimmerman, the bank’s senior vice president for marketing in the region.

“If there’s a lot of need coming out of West Michigan, we have as great an opportunity just as anyone else to be able to capitalize on those funds that will be available,” Zimmerman said. “This gives us the opportunity to look for more opportunities that are out there.”

Lonergan maintains regular contact with nonprofit organizations to “see what they’re doing, what they’re working on and what role we might play,” he said. His focus has been on small business and minority lending, economic development and job creation, and improving access to mortgage loans for low- and moderate-income borrowers.

In the coming weeks, and with the new funding available starting Jan. 1, he’ll reach out to groups across the region to explain the effort. Lonergan said he hopes the bank can support community development projects “to a greater extent and a greater impact.”

Fifth Third Bank, for instance, could elevate support for supplier diversity programs or increase microlending to entrepreneurs starting a small business, Lonergan said. The corporate commitment also can enable the bank locally to do more around affordable housing, he said.

“The commitment itself does signify an interest in looking at new and innovative solutions,” Lonergan said.

There’s a potential as well to do more business plan competitions such as the one Fifth Third held earlier this year with the West Michigan Hispanic Chamber of Commerce in Grand Rapids, he said.

Fifth Third Bancorp raised its community development commitment through a partnership with the Washington, D.C.-based National Community Reinvestment Coalition and its network of partner nonprofit organizations in the south and Midwest.

The bank’s Community Development Plan includes:

  • $11 billion in mortgage lending to low- and moderate-income individuals and communities.
  • $10 billion in small business lending to companies with gross annual revenue below $1 million.
  • $9 billion in federal Community Reinvestment Act community development loans and investments, including support for affordable housing, revolving loan funds, community development corporations and financial institutions, housing rehab loan pools, and land trusts and land banks.
  • $93 million in philanthropy.
  • Ensuring adequate access to bank branches in low- and moderate-income communities and communities of color, with the opening of  at least 10 new branches.

Fifth Third Bank has nearly 1,200 offices in 10 states with total assets as of Sept. 30 of $143 billion. It ranked as the fifth-largest bank operating in Michigan as of June 2016 in terms of deposit market share, according to the FDIC’s annual Summary of Deposits. 

The bank had $16.07 billion in deposits with 215 offices in the state. 

In West Michigan, Fifth Third held leading deposit market shares in Kent, Ottawa and Muskegon counties, and ranked second in Kalamazoo County in the 2016 Summary of Deposits. 

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