Fifth Third Bancorp in Cincinnati has expanded its community development pledge to $30 billion.
The updated plan, announced Friday, adds to the $27.5 billion in commitments that Fifth Third unveiled in February under an agreement with the National Community Reinvestment Coalition.
And it follows the decision in July by the Federal Reserve Board to downgrade the $141 billion-asset bank's Community Reinvestment Act rating to "needs to improve" from "satisfactory." At the time, analysts said the downgrade could throw a wrench in Fifth Third's efforts to return to bank acquisitions. Fifth Third has said the downgrade reflected "legacy issues" from 2011 to 2013 that were addressed.
The $30 billion pledge is for 2016 to 2020 and breaks down into three parts:
- $11 billion would be used to fund mortgage lending to low- and moderate-income individuals and communities.
- $9 billion would fund CRA community development loans and investments, including support for affordable housing, community development financial institutions, housing rehab loan pools and land banks.
- Another $10 billion would be set aside for small-business lending to businesses with gross annual revenue below $1 million.
The pledge covers the 10 Midwestern and Southeastern states where Fifth Third has branches. Beyond funding these investment and lending activities, Fifth Third also has plans to open at least 10 branches to improve access in lower-income communities and communities of color.
"Fifth Third is deeply committed to both investing significant resources into the community as well as engaging community members and leaders," Fifth Third CEO Greg Carmichael said in a news release. "Our objective is to ensure that, together with the NCRC, we meaningfully impact the communities in the 10 states where Fifth Third operates."
The additions announced Friday included $1 billion more for mortgage-credit access. The company also expanded its CRA lending plan by roughly $1.5 billion, Fifth Third spokeswoman Stacie Haas said.
Moreover, Fifth Third added more funds for its "impact programming," which includes philanthropic efforts, diverse hiring and supplier initiatives and other investments and marketing, increasing those investments to $158.4 million from $77 million back in February.