Cadence Bank pledges $20.7 billion in community development lending

Cadence Bank in Houston has committed to invest $20.7 billion in low- and moderate-income communities over five years as part of a deal negotiated with community advocacy groups.

The agreement, announced jointly on Thursday by the bank and the National Community Reinvestment Coalition, is similar to deals announced by other banks that were in the midst of or had completed large mergers. Houston-based Cadence merged with BancorpSouth Bank in Tupelo, Mississippi, in October, creating a regional bank with more than $50 billion of assets and operations in nine states.

Under terms of the latest agreement, Cadence has committed to providing $11.8 billion in mortgages to low- and middle-income borrowers and homebuyers of color. It has committed another $6.5 billion of loans to small businesses in lower-income areas whose annual gross revenues are less than $1 million.

Trent Baker

Cadence will also dedicate $2.4 billion in community development lending and investments for projects like affordable housing and other services to help distressed neighborhoods.

“I’m encouraged that these banks, Cadence and BancorpSouth, have agreed to put their commitments to low- and moderate-income communities, small businesses, especially those owned by people of color...in writing,” Bob Dickerson, executive director of the Birmingham Business Resource Center and an NCRC board member, said in a press release announcing the deal.

“Cadence is dedicated to understanding the financial needs of its communities and providing solutions to help make them stronger,” Cadence CEO and Chairman Dan Rollins said in the press release.

Cadence announced a $2.5 billion community benefits plan in 2019 after it acquired State Bank Financial in Atlanta.

Both Cadence and BancorpSouth had faced allegations of discrimination in the past.

In 2016, BancorpSouth settled allegations of discrimination in mortgage lending by paying a $10.6 million fine to the Department of Justice and the Consumer Financial Protection Bureau.

And last year Cadence had to pay an $8.5 million fine to DOJ and the Office of the Comptroller of the Currency to settle allegations of discrimination within its mortgage business.