BBVA reaches $100 million commitment in CDFI investments early

- BBVA USA invests $100 million in support of CDFIs: Bank achieves its benchmark three months ahead of schedule.

- Investments include nearly $13 million to support the Low Income Investment Fund (LIIF): LIIF provides a bridge between private capital markets and low income neighborhoods.

October 07, 2019

HOUSTON, Oct. 7, 2019 /PRNewswire/ -- BBVA recently completed its 49th investment in community development financial institutions (CDFIs), moving its total investment in the community catalysts to $100 million in the U.S. three months ahead of its 5-year target.

BBVA's new logo (PRNewsfoto/BBVA)

CDFIs are critical engines of opportunity in low-income communities, providing capital and technical assistance to those who don't have access to traditional bank financing. As one of only a handful of financial institutions in the U.S. that actively support them, BBVA helps these private financial institutions deliver responsible, affordable lending to help low-income, low-wealth, and other disadvantaged people and communities join the economic mainstream.

How BBVA supports CDFIs

"By financing community businesses—including small businesses, microenterprises, nonprofit organizations, commercial real estate, and affordable housing developers—CDFIs can spark job growth in hard-to-serve markets," said Reymundo Ocañas, Director of Communications and Responsible Business for BBVA USA. "They put community first, and they have had a proven track record of making an impact in those areas of America that need it most."

During the bank's 5-year commitment period, it partnered with 28 Community Development Financial Institutions (CDFIs) across its footprint to provide more than 100 equity equivalent (EQ2) loans, equity and stock purchases totaling $54 million. These efforts helped to increase CDFI lending capacity at the community level and provided financial resources for small business lending and training, as well as programs that support and development healthy communities including affordable housing, childcare, health and transportation initiatives.

How CDFIs help communities

One of the bank's largest and arguably most impactful investments the bank made over the last 5 years was its $12.8 million investment to the Low Income Investment Fund (LIIF), which creates pathways of opportunity for low income people and communities. The BBVA capital investment in LIIF provided support for community-building initiatives in Birmingham, Ala., as well as a number of communities across Texas and California.

"Through LIIF's work in financing housing for working families and charter schools -- as well as projects that support green buildings and healthy food markets -- BBVA's capital investment plays an important role in the economic cycle of improving low to moderate income communities," said Ocañas, who also serves on the board of directors for LIIF.  

BBVA grants also provided significant support for PeopleFund, a CDFI which provides small business loans as well as business assistance and education to people with otherwise limited access to such resources. "PeopleFund's financial and educational assistance to entrepreneurs in emerging neighborhoods has helped create thousands of jobs and empowered even more Texans on a path to financial stability and independence," said Ocañas.

For example, PeopleFund in Houston provided support and small business loans to local entrepreneur Margo Jordan-Baines, who established Chicks with Class in 2013 as an online retailer before restructuring her business in 2016 into a brick and mortar store. The organization offers enrichment programs for young kids with the mission to blossom young girls and boys into a young adults who will help shape the world into a better place. By partnering with local non-profits, Chicks with Class hosts day camps, etiquette classes and empowerment programs, then donates a portion of all proceeds to each partner organization.

Through BBVA equity equivalent funds, PeopleFund was able to make loan payments on behalf of Chicks with Class in the aftermath of Hurricane Harvey, allowing the business to recover and Jordan-Baines to focus on her family and home after the storm. Jordan-Baines continues to work with PeopleFund's business coaches and has received second place in the first edition of the BBVA Momentum competition in the U.S.

In addition to the role they play in economic development, CDFIs are also well-positioned to meet the lending needs of communities recovering from disasters. "BBVA's geographic footprint has been dramatically impacted by disasters in recent years, including significant flooding, tornadoes and hurricanes," said Ocañas. "The bank's ongoing support of CDFIs ensures that they are prepared to provide loans, investments, training and technical assistance in the aftermath of a disaster, and help communities get back on their feet.

"While we are proud to have reached this $100 million benchmark, this is by no means an endpoint for us," said Ocañas. "We remain committed to providing support for community economic development in the communities where we live and work, and we expect CDFIs to continue to play a prominent role in our efforts."

For more information on the bank's work with CDFIs, click here.

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About BBVA

BBVA Group
BBVA (NYSE: BBVA) is a customer-centric global financial services group founded in 1857. The Group has a strong leadership position in the Spanish market and is the largest financial institution in Mexico. It has leading franchises in South America and the Sunbelt Region of the United States. It is also the leading shareholder in Turkey's BBVA Garanti. BBVA's purpose is to bring the age of opportunities to everyone, based on our customers' real needs: provide the best solutions, helping them make the best financial decisions, through an easy and convenient experience. The institution rests in solid values: Customer comes first, we think big and we are one team. BBVA's responsible banking model aspires to achieve a more inclusive and sustainable society.

BBVA USA
In the U.S., BBVA is a Sunbelt-based financial institution that operates 641 branches, including 329 in Texas, 89 in Alabama, 63 in Arizona, 61 in California, 45 in Florida, 37 in Colorado and 17 in New Mexico. The bank ranks among the top 25 largest U.S. commercial banks based on deposit market share and ranks among the largest banks in Alabama (2nd), Texas (4th) and Arizona (6th). In the U.S., BBVA has been recognized as one of the leading small business lenders by the Small Business Administration (SBA) and ranked 8th nationally in terms of dollar volume of SBA loans originated in fiscal year 2018.

 

SOURCE BBVA USA

For further information: Lori Moore, Tel. 205 617 5260, lori.moore@bbva.com