Investment is part of a $50 million pledge to help minority institutions and the bank’s larger commitment to foster an inclusive recovery
Wells Fargo today announced equity investments in six African American Minority Depository Institutions (MDIs) as part of its March 10, 2020, pledge to invest up to $50 million in Black-owned banks. As part of the capital investment, the banks will have access to a dedicated Wells Fargo relationship team that will provide financial, technological, and product development expertise in order to help each institution grow and benefit their local community. In the ongoing pandemic, communities of color have been disproportionately impacted, and this investment is part of Wells Fargo’s effort to generate a more inclusive recovery across the country.
“These investments are designed to help the banks become stronger and more impactful to the minority communities they serve, which leads to economic revitalization and job opportunities,” said Bill Daley, vice chairman of Public Affairs at Wells Fargo. “So many communities have suffered over the past year. MDIs need capital, but they can also benefit from access to other resources, and Wells Fargo is committed to building lasting, strategic relationships with these institutions in support of their goals.”
Today’s announcement includes investments in the following institutions:
“February is Black History Month, and we are proud to announce these investments at this time because they reflect our dedication to helping African American communities, many of which continue to fight the destructive economic impact of the pandemic. Wells Fargo wants to help drive stabilization and recovery by using our financial resources and our ability to act as a partner in order to generate better outcomes,” said Kleber Santos, head of Diverse Segments, Representation & Inclusion at Wells Fargo.
Wells Fargo’s financial commitments are in the form of critical equity capital, which is foundational to the MDIs’ ability to expand lending and deposit-taking capacity in their communities. The investments, primarily non-voting positions, are designed to enable the banks to maintain their MDI status. Wells Fargo is also supporting each MDI’s development through a banking relationship in the form of a single touchpoint coverage model that will help them access Wells Fargo’s expertise and pursue strategic priorities like entering new markets, expanding locations, designing new products, and hiring staff to support loan growth.
“The investment and support from Wells Fargo will allow us to substantially increase our impact on closing the racial wealth gap. We are grateful and committed to ensuring that this capital helps drive transformational wealth building opportunities for our communities and customers,” said Dominik Mjartan, president and CEO of Optus Bank.
External partners that assisted Wells Fargo include the National Bankers Association (NBA) and Sullivan & Cromwell. External advisory committee members are Kim D. Saunders, president and CEO of NBA; Aron Betru, managing director of the Center for Financial Markets at Milken Institute; and John W. Rogers, Jr., chairman, co-CEO, and CIO of Ariel Investments.
Wells Fargo’s financial commitment announced today complements additional initiatives that aim to serve all of our customers and communities:
*Broadway is expected to merge with City First Bank in early 2021 and will become the largest African American MDI. Wells Fargo’s investment will close upon completion of the merger.