Muncie-based First Merchants Corp. (Nasdaq: FRME) is planning to invest more than $1 billion to support low- and moderate-income neighborhoods. Along with the National Community Reinvestment Coalition, the bank says the Community Benefits Agreement will help communities in Indiana, Ohio, Illinois, and Michigan.
The bank says the five-year commitment includes mortgage, small business and community development investments and lending.
“The $1.4 billion Community Benefits Agreement accelerates First Merchants’ leadership in helping our communities and customers thrive,” said Mike Rechin, First Merchants chief executive officer. “At a time when low- and moderate-income neighborhoods are most vulnerable, we will provide hundreds of millions of dollars to help communities throughout Indiana, Ohio, Illinois and Michigan. The impact of these resources will last well into the future.”
First Merchants says the initiative began with a needs assessment in September 2019 and was finalized earlier this month. The collaboration with NCRC also involved 19 local community organizations that provided input to develop the plan.
“This agreement is a product of all of our efforts. This commitment provides First Merchants Bank an opportunity to increase its Community Reinvestment Act activity, and to direct it where it is needed most,” said NCRC CEO Jesse Van Tol. “This is how the Community Reinvestment Act should work for banks and communities alike.”
The bank says the investment will provide:
- $398 million in mortgage lending
- $423 million in small business lending
- $580 million in community development lending and investment commitments
- $3.4 million in sponsorships, grant, loan and investment opportunities
- $10 million to open five new branches and/or loan production offices in low- to moderate-income communities, including Marion County, Lake County, Franklin County in Ohio and Wayne County in Michigan.
First Merchants says it will leverage its current partnerships to help identify and engage with potential clients who may benefit from existing and newly-developed products and programs.
“This agreement with First Merchants Bank is a significant step forward and reflects practices that all banks can adopt in order to address the racial wealth divide,” said Dedrick Asante-Muhammad, NCRC chief of race, wealth and community.
The National Community Reinvestment Coalition in Washington, D.C. aims to increase the flow of private capital into traditionally underserved communities. The coalition works with community leaders, policymakers and financial institutions to champion fairness and end discrimination in lending, housing and business.