The National Community Reinvestment Coalition (NCRC) and Old National Bancorp on Thursday announced a $1.2 billion addendum to the bank’s existing $8.3 billion Community Growth Plan. The agreement builds on the bank’s long-standing commitment to supporting historically underserved and economically-disadvantaged individuals, families and communities, and on NCRC’s ongoing work to ensure all bank mergers feature a clear and specific benefit to those living in affected service areas.
“Old National’s commitments to under-resourced communities in this agreement are a great example of how the Community Reinvestment Act should work,” said NCRC President and CEO Jesse Van Tol. “Every single bank merger should come with clearly defined commitments like these, as required by law and regulation. Old National understands how such collaboration with community leaders is in the best interest of everyone, and I hope others in the industry will embrace this truth.”
The addendum is subject to the closing of Old National’s previously announced partnership with Nashville-based CapStar Financial Holdings, Inc., the holding company for CapStar Bank.
“Supporting and strengthening the communities that Old National serves remains a strategic priority and a defining characteristic of our Old National culture,” said Old National CEO Jim Ryan. “We are excited for this opportunity to expand on our existing partnership with NCRC and increase the positive impact of our Community Growth Plan.”
Since 2016, NCRC has facilitated 29 community benefits agreements with bank groups that committed more than $580 billion for mortgage, small business and community development lending, investments and philanthropy in LMI and under-resourced communities.
“The Metropolitan Milwaukee Fair Housing Council (MMFHC) supports Old National Bank’s (ONB) additional community commitments to the Tennessee market,” said Bethany Sanchez, MMFHC’s Senior Administrator for Fair Lending. “We look forward to our continued partnership to increase lending and investment that will meet the needs of low- and moderate-income residents in Wisconsin and ONB’s entire market.”
These new commitments expand on Old National’s long-standing commitment to support historically underserved and economically disadvantaged individuals, families and communities throughout our footprint by extending these services into CapStar-served communities in Tennessee. These commitments include additional quantitative goals for mortgage lending, small business lending, community development lending and investments, philanthropic activities, and racial equity commitments.
Specific highlights of the plan include:
- Mortgage Lending: Provide approximately $815 million in loan originations to promote increased home ownership and home improvement.
- Small Business Lending: Originate more than $332 million in loans to businesses with annual revenues of $1 million or less, and to small businesses located within low-to-moderate income areas.
- Community Development Lending and Investments: Invest more than $107 million in loans and investments in support of projects that provide affordable housing, revitalize distressed neighborhoods, and promote economic development initiatives in the communities Old National serves.
- Philanthropic Activities: Provide approximately $1.7 million in funding to organizations and for causes that provide community benefits as defined under the federal Community Reinvestment Act. In addition, Old National will designate approximately $850,000 of this amount to newly established relationships.
- Racial Equity Commitment: Provide $4 million toward supporting opportunities for individuals and communities of color. This includes establishing two new banking centers within majority-minority communities and support for other impactful programs and activities.
Old National retains an ongoing commitment to work with NCRC and other local community groups to identify additional opportunities to support the financially disadvantaged and communities of color, including through its supplier diversity and apprenticeship programs, as well as its talent acquisition and retention efforts.
Summary of the Addendum to Community Growth Plan Between The National Community Reinvestment Coalition and Old National Bank
In connection with Old National Bank’s proposed acquisition of CapStar Bank, Old National will lend or invest over $1.26 billion to underserved borrowers and communities within the CapStar Bank footprint over the remaining three years of the existing Old National Bank Community Growth Plan.
Mortgage Lending to the Underserved
Commitment: $815 million
Old National is committed to making increases in CapStar’s lending performance in Nashville and throughout Tennessee. Old National commits to at least $815 billion in loans to underserved borrowers and neighborhoods in the CapStar Bank footprint over the next three years, with sub goals in both home purchase lending and home improvement lending to Black and Hispanic borrowers, borrowers with low or moderate incomes, and to borrowers in LMI or majority-minority census tracts.
Small Business Lending
Commitment: $332 million
Old National Bank commits to over $332 million in small business lending in the CapStar Bank footprint, with sub-goals for loans to businesses with annual revenues of $1 million or less and to small businesses located within low- to moderate-income areas in CapStar Bank’s footprint.
Community Development Lending and Investment (CDLI)
Commitment: $107 million
Old National commits to $107 million in loans and investments in support of projects that provide affordable housing, revitalize distressed neighborhoods, and promote economic development initiatives in the communities served by Old National’s new Tennessee footprint.
CRA Focused Philanthropy
Commitment: $1.7 million
Old National will provide approximately $1.7 million in funding to organizations and for causes that provide community benefits as defined under the Community Reinvestment Act. In addition, Old National Bank will designate approximately $850,000 of this amount to newly established relationships in Tennessee, devoting $250,000 in 2024 and $300,000 each year during 2025 and 2026 to organizations in Tennessee that are currently not receiving philanthropic support from CapStar Bank.
Nashville MSA Racial Equity Commitment
Commitment: $4 million
In addition to the $1.7 million philanthropic commitment noted above, Old National commits $4 million towards supporting opportunities for individuals and communities of color. Old National commits to:
- Open two full-service banking centers within majority-minority neighborhoods in the CapStar Bank footprint; the first will be located in Nashville and opened by September 30, 2025; the second shall be opened at another location in Tennessee by the end of 2026;
- Provide below market financing for affordable housing development as well as home ownership and preservation needs;
- Provide a bank funded home mortgage subsidy program that will include $1.3 million in loan subsidies over three years ($300,000 in subsidy dollars for 2024 and $500,000 in subsidy dollars for each of 2025 and 2026);
- Provide patient capital that would be invested in CDFIs led by persons of color for a total of $950,000 over three years;
- Work with CDFIs led by persons of color to increase micro-enterprise lending for emerging entrepreneurs of color. This support should also include resources for technical assistance;
- Collaborate with and support home repair programs that aim to preserve affordable housing across CapStar’s footprint, such as acquisition-rehabilitation lines of credit to affordable housing developers who need liquidity to effectively acquire properties as they become available, in order to rehabilitate the properties and then sell them to LMI borrowers as affordable housing;
- Provide loans and impact investments for CDCs and CDFIs to finance critical community facilities like healthcare centers, educational centers, and broadband access; and
- Support programs to remediate environmental damage or the damage from natural disasters, such as tornadoes.
Staff Diversity and HBCU Partnerships
Old National will attract, develop and retain a diverse workforce, consistent with its needs and policies that are reflective of the communities of its newly combined institution. This diversity will be reflected from entry-level to the most senior levels within the organization. To help with this goal, Old National shall establish special internship programs with HBCUs located in the state of Tennessee and will establish partnerships with HBCUs.
Plan Governance and Annual Report
Old National and NCRC will expand the existing Community Advisory Board with two additional representatives from the Tennessee market. Old National will continue to provide a report on the overall progress of this plan to the Community Advisory Board by way of semi-annual in-person meetings, one of which will take place in Nashville, TN in 2024 and 2025. In coordination with NCRC, Old National agrees to hold one annual virtual market-wide plan update meeting as well as one annual virtual Tennessee market meeting.
Old National will provide annual reports of the progress of this plan to NCRC and the Community Advisory Board, which will highlight how its Plan Addendum is increasing wealth and opportunity for LMI individuals as well as people of color throughout CapStar’s footprint. The reports will provide an overview of loans made to people of color, support for organizations led by people of color, staff diversity within CapStar and procurement from businesses owned by people of color. An MSA level breakdown on the implementation of the addendum will also be included. This addendum report will include units, race/ethnicity of borrower as well as census tract data. Old National will also include a summary of the progress of the addendum and overall Community Growth Plan as part of its annual public Environmental, Social and Governance Report.