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First Tennessee and NCRC announce a $3.95 billion commitment to community development

First Tennessee Bank and Capital Bank, members of the First Horizon National Corp. (NYSE:FHN) family of companies, today announced a five-year, $3.95 billion community benefit plan to increase access to financial resources within low- to moderate-income (LMI) communities in Florida, Georgia, Mississippi, North Carolina, South Carolina, Tennessee, Texas and Virginia.

The community benefits plan, which is an agreement with the National Community Reinvestment Coalition (NCRC) and its community-based members across the Southeast, will run from 2018 to 2022.

“First Tennessee Bank and Capital Bank have been actively engaged in meaningful conversations with our members to ensure that they are well positioned to meet the needs of underserved communities,” said NCRC President and Founder John Taylor. “We very much appreciate the strong collaboration demonstrated by the executive leadership of First Tennessee and Capital Bank.”

The plan includes mortgage and small business lending, community development lending and investments, philanthropy and spending with minority-owned suppliers and marketing firms. It also includes innovative methods to increase the convenience and physical access to financial services in low- to moderate-income communities.

“Our company is dedicated to supporting the success of underserved individuals and strengthening communities across our footprint,” said Bryan Jordan, chairman and CEO of First Horizon National Corp. “We believe our new $4 billion investment will take our longstanding community commitment to the next level by spurring growth and sustainable economic development.”

First Tennessee CBA announcement at Just Economy Conference
Bryan Jordan, chairman and CEO of First Horizon National Corp., surrounded by representatives of community groups, announces First Tennessee Bank’s Community Benefits Agreement with NCRC at NCRC’s Just Economy Conference April 9, 2018.

The plan includes the following priorities and targets:

  • Increasing home ownership: Fund $515 million in home purchase and rehabilitation mortgage lending. This will translate into approximately 967 new homes owned by people of color and 533 homes owned by low- or moderate-income people.
  • Building small business: Fund $1.9 billion in small business lending to businesses in low-to-moderate areas and businesses with less than $1 million in annual revenue.
  • Fostering community development: Fund $1.5 billion in community development and multi-family lending and investments.
  • Strengthening communities: Fund $40 million in grants and philanthropy, including supporting workforce development, small business, housing counseling, Community Development Corporations (CDC), Community Development Financial Institutions (CDFI), and funding financial literacy and education programs for children, young adults and small business entrepreneurs.
  • Supporting supplier diversity: Devote 3%-6% of the bank’s supplier spending to minority-owned businesses.
  • Partnering with minority-owned marketing firms: Earmark a portion of the bank’s marketing budget to minority-owned firms.

Regional leaders applaud the agreement:

“Considering the very significant needs of this region and First Tennessee’s markets, this agreement and the investments in it are a great down payment on meeting those needs,” said Irvin Henderson, Chairman, National Trust Community Investment Corporation.

“The Community Reinvestment Alliance of South Florida was very pleased to participate in this process with NCRC and First Tennessee. We look forward to working together to continue improving our community,” said Cornell Crews Jr., Executive Director, Community Reinvestment Alliance of South Florida.

“First Tennessee in good faith has developed a community benefits plan that is meaningful and impactful. Reinvestment Partners looks forward to working with the bank as a leader in North Carolina,” said Peter Skillern, Executive Director, Reinvestment Partners.

“HEED looks forward to working with First Tennessee on creating neighborhoods of choice and a just economy in their Mississippi markets,” said Charles Harris, Executive Director, Housing Education & Economic Development.

“The Memphis Housing Authority is excited to support the First Tennessee Community Benefit Plan. The population we serve in Memphis are by definition low-income households who have not always had the ability to benefit from a true banking relationship. The Memphis Housing Authority feels this plan will provide them access to services that will build their self-sufficiency, independence from government assistance and improve their future,” said Marcia Lewis, Executive Director, Memphis Housing Authority.

“SMASH is pleased to see that First Tennessee has agreed to a CBA that will strengthen investment in low-income communities of color. We look forward to working with them to make sure that this capital is used for equitable development, not gentrification” said Adrian Madriz, Project Lead, SMASH Inc.

“I’m delighted about the commitments made by First Tennessee Bank. Incremental progress that addresses the divide between business community reinvestment and consumer needs is essential for the recovery of all economies. Durham Regional Financial Center looks forward to the social and economic benefits made available to our residents, businesses and minority institutions in Durham and surrounding counties,” said Glyndola Massenburg-Beasley, President Durham Regional Financial Center.

“After working with the National Community Reinvestment Coalition (NCRC) to produce a publicly accessible bank lending disparities report for our city, Chattanooga Organized for Action is delighted to see these concrete steps and partnership agreed to by First Tennessee. This is the first Community Benefits Agreement that applies to the Chattanooga area, and we hope it becomes a model of development and investment as our city grows. NCRC’s expertise has been invaluable, and they’ve helped grassroots organizations like ours learn how to be included in the process of community reinvestment,” said Michael Gilliland, Board Chair, Chattanooga Organized for Action, Inc.

“First Tennessee Bank has been a staunch supporter for many years of Operation HOPE’s efforts to provide financial dignity and empowerment to all people. Senior executives have also donated their time to work with us side-by-side. CEO Bryan Jordan has become a member of our executive board of directors, Vice President Steve Swain is a member of our advisory board of directors, and Senior Vice President, David Fehrenbacher has joined our midwestern board of directors. Now, with this nearly $4 billion commitment to helping the underserved, First Tennessee is taking it to the next level,” said John Hope Bryant, CEO and Founder, Operation HOPE.

Local organizations supporting the Community Benefits Plan:

Advance Memphis
Affordable Homeownership Foundation Inc.
Alcy Ball Development Corporation
BHO, INC.
Catalyst Miami
Centre for Homeownership and Economic Development Corporation
Chattanooga Organized for Action, Inc.
Children’s Services Council of Broward
Community Link
Community Reinvestment Alliance of South Florida
Durham Regional Financial Center
Good Neighbor Foundation HomeOwnership Center
Henderson & Company
Housing Education & Economic Development
Innovate Memphis
Memphis Area Legal Services, Inc.
Memphis Empowerment Initiative
Memphis Housing Authority
Memphis Urban League
National Trust Community Investment Corporation
Neighborhood Housing Services of South Florida
Neighborhood Renaissance
New Frontier Community Development Corporation
North Delta Mississippi Enterprise Community Development Organization
Northwest Community Consortium of West Palm Beach
Overtown Children and Youth Coalition
Partners For Self Employment, Inc.
Real Estate Education And Community Housing Inc- R.E.A.C.H.
Rebuild Durham
Reinvestment Partners
REVA Development Corporation
SMASH, Inc.
Tennessee Fair Housing Council
Tennessee Human Rights Commission
The Institute of Minority Economic Development
Urban Philanthropies, Inc.
West Tennessee Legal Services
White Oak Foundation, Inc.
You Can Make It HomeOwnership Center

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Summary of the Community Benefits Agreement between the National Community Reinvestment Coalition and First Tennessee.

First Tennessee will lend or invest $4 billion to low- and moderate-income (LMI) borrowers and people of color, and in LMI communities and communities of color, over a five-year period from 2018 to 2022. This commitment comes out to 9% of First Tennessee’s post-merger assets, or 13% of its deposits.

Mortgage Lending to the Underserved
Community Benefits Commitment: $515 million over 5 years

First Tennessee will commit to separate and specific home purchase and home rehab lending goals for LMI borrowers, people of color, LMI neighborhoods and neighborhoods of color. First Tennessee’s home purchase mortgage lending commitment will translate into approximately 967 new homes owned by people of color, and 533 new homes owned by LMI borrowers. First Tennessee will also start offering an affordable portfolio home mortgage product.

Small Business Lending to Small Businesses & Low- and Moderate-Income Communities
Community Benefits Commitment: $1.9 billion over 5 years

First Tennessee will adopt separate and specific small business lending goals for small businesses and businesses in LMI neighborhoods. First Tennessee will develop a program that offers small business loans less than $50,000 with a streamlined application process. First Tennessee will also set up formal referral relationships with Community Development Financial Institutions (CDFIs) for businesses that apply to First Tennessee but are not yet ready for traditional bank financing.

Community Development Lending and Investment (CDLI)

Community Benefits Commitment: $1.5 billion over 5 years

First Tennessee will devote $1.5 billion to community development loans and investments, a 189% increase. Included in this, First Tennessee will increase investments in CDFIs and similar nonprofit organizations, improve the process for which nonprofits apply for community development and philanthropy, and expand support for minority-owned and woman-owned depository institutions. 

Philanthropy
Community Benefits Commitment: $40 million over 5 years

First Tennessee will devote $40 million in grants over the next five years, a 164% increase. Philanthropic giving will increase support for housing counseling organizations, build non-profit capacity, and strengthen First Tennessee’s outreach to LMI borrowers, people of color, and women.

North Carolina Addendum

The First Tennessee agreement also includes specific home purchase, home rehab, and small business lending goals for the state of North Carolina, including $93.8 million in home purchase and rehab lending, and $391.1 million in small business lending. These goals also include specific and separate goals for LMI borrowers, people of color, LMI neighborhoods, and neighborhoods of color. These goals translate into approximately 450 new homes owned by people of color in North Carolina, and 275 new homes owned by LMI borrowers.

Staffing

First Tennessee will enhance and invest in staff responsible for implementing these goals. This will include goals for lending officers for lending to LMI borrowers and small businesses, and ensuring that loan officers are not compensated in a way that creates a disincentive for working with customers with smaller mortgages and small businesses.

Credit Building

First Tennessee is exploring an innovative partnership with an owner/operator of low income multi-family housing to help tenants establish or improve their credit score and put them on a path towards homeownership. Options being explored include providing tenants a secured credit from which to make rental payments partially funded by First Tennessee.

Other Commitments

First Tennessee will maintain an annual supplier diversity spend of 3-6% to businesses owned by people of color and woman-owned businesses. First Tennessee will also continue to work with nonprofit organizations to ensure that First Tennessee’s staff are compliant with the Fair Housing Act, especially as it relates to reasonable accommodation for the disabled.

Plan Governance

First Tennessee will provide semi-annual progress reports on this agreement, using a format mutually agreed upon with NCRC.

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Redlining and Neighborhood Health

Before the pandemic devastated minority communities, banks and government officials starved them of capital.

Lower-income and minority neighborhoods that were intentionally cut off from lending and investment decades ago today suffer not only from reduced wealth and greater poverty, but from lower life expectancy and higher prevalence of chronic diseases that are risk factors for poor outcomes from COVID-19, a new study shows.

The new study, from the National Community Reinvestment Coalition (NCRC) with researchers from the University of Wisconsin–Milwaukee Joseph J. Zilber School of Public Health and the University of Richmond’s Digital Scholarship Lab, compared 1930’s maps of government-sanctioned lending discrimination zones with current census and public health data.

Table of Content

  • Executive Summary
  • Introduction
  • Redlining, the HOLC Maps and Segregation
  • Segregation, Public Health and COVID-19
  • Methods
  • Results
  • Discussion
  • Conclusion and Policy Recommendations
  • Citations
  • Appendix

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