In 2016, Fifth Third Bank announced a community commitment to invest $30 billion over five years in low- to moderate-income borrowers and neighborhoods in its 10-state footprint.
The bank pledged $3.8 billion of that total to its third-largest market by number of employees — West Michigan. Its largest and second-largest markets are Cincinnati and Chicago.
In its 2017 Corporate Social Responsibility (CSR) report published last month, Fifth Third outlined its progress in each of the categories included in the commitment.
The categories are mortgage lending; small business lending; community development lending and investments; and “impact programming,” which includes philanthropy, housing-related investments, small business-related investments, branch and staff commitments, diversity and inclusion, and financial education.
The CSR provides an overview of Fifth Third’s activity in all 15 regions it serves in 10 states: Ohio, Kentucky, Indiana, Michigan, Illinois, Florida, Tennessee, West Virginia, Georgia and North Carolina.
Pat Lonergan, senior vice president of community development for Fifth Third Bank West Michigan, said the bank pledged $3.8 billion to West Michigan over the five-year commitment period, and it spent $1.667 billion in the first two years, 2016 and 2017. That means the bank was about 10 percent ahead of its goal at the end of 2017.
Fifth Third invested about a third of that $1.667 million in small business lending, Lonergan said.
“During that two-year time frame, we’ve made $562 million in loans to small businesses, 112 percent of goal. … It’s a significant part of the economy, and really, what we’re trying to do is help generate economic well-being for our employees and business owners. Access to credit is key to doing that.”
Lonergan said community development is another big category for Fifth Third West Michigan, particularly affordable housing investments.
“In the two years of the commitment, we’ve done $22,437,000 in West Michigan in investments in affordable housing,” he said. “Some projects you might drive around and see. We were an investor in the (Grand Rapids) Housing Commission’s renovated Creston Plaza, phases 1 and 2. We invested in the Herkimer Apartments/Dwelling Place project, as well as ICCF’s Tapestry Square just south of the Diocese (of Grand Rapids) on Wealthy and Division.
“In total, we had $8 million in affordable housing projects over the commitment period (so far), just in the city of Grand Rapids.”
He said given his rule of thumb that each unit represents a $100,000 investment, Fifth Third has played a part in developing 80 units of housing in the past two years.
“Affordable housing is a huge need, and it’s expected to build, but we’ve invested in many, many projects across the state already,” he said.
In regard to mortgage lending, in the first two years of the five-year plan, the bank has invested $578 million in West Michigan, which is 107 percent of its goal for this stage in the process.
“Mortgage is a huge element of the overall commitment,” Lonergan said, adding Fifth Third West Michigan also has provided 229 down payment assistance grants, totaling $633,000, to low-income homebuyers. This helped the bank close on $21 million in mortgages.
“Rents are expensive, and we’re trying to provide low-income families access to the opportunities they might not otherwise have. We are helping as many as possible who qualify.”
On the philanthropy side, during the first two years of the community commitment, Fifth Third made a total of $2,646,000 in charitable donations in West Michigan. Of this, roughly $1,322,000 — or about half — are in the bank’s “impact programming” areas of housing, small business and financial stability.
Some examples of its West Michigan philanthropic investments:
Serving as one of the sponsors for Start Garden’s 100 Ideas contest
Granting $100,000 to Habitat for Humanity of Kent County to aid the Roosevelt Park neighborhood development effort
Working with the Literacy Center of West Michigan to create programming that will “connect traditional literacy with financial literacy”
Renewing a $30,000 grant to Kids’ Food Basket for funding one school for a year
Lonergan said Fifth Third West Michigan provided $1.4 million in charitable funding in addition to the above investments.
“About half of all our donations go to things associated with what we call community and economic development,” Lonergan said. “About 20 percent of that goes to arts and culture, 16 percent to health and wellness, and 14 percent to education.”
Education investments Fifth Third West Michigan has made over the past two years mostly center on program development.
As the Business Journal previously reported, in the first week of May, Fifth Third partnered with the Michigan Small Business Development Center to launch a webinar series called Small Business Essentials, a financial education platform that allows small business owners “who can’t leave the shop” to grow their financial competence.
The bank is working with the nonprofit Access of West Michigan to include financial education concepts in a healthy eating program for those with chronic diseases called Access NOW. It currently is in the pilot phase.
Another program is the Fifth Third Finance Academy, a digital financial literacy program available for seventh through 10th-graders in area schools.
“It is free to schools, meets state standards for education, is delivered digitally on smartphones, tablets or computers, and is augmented with classroom tools, pretests and post-tests to track improvement of students,” Lonergan said. “Our goal is to reach 30,000 enrolled a year in Michigan, 150,000 across the company.”
Lonergan stressed monetary investments are not the only way Fifth Third is helping the community and local economy.
Fifth Third West Michigan’s 1,900 employees logged 15,000 volunteer hours in 2017, up from 13,000 in 2016.
“When we talk about building stronger communities, we think it begins with us being involved in the community — on nonprofit boards, in financial education or packing kids’ sack suppers,” he said. There’s the treasure part of philanthropic support, investing in neighbors and community, and the time part, being out there to support and serve the community.
“It’s a visual reflection of our commitment.”
Fifth Third Bank’s full 2017 CSR report, which contains aggregate data for the bank’s 10-state footprint, is available at bit.ly/53CSR2017.