CINCINNATI--(BUSINESS WIRE)--The Fifth Third New Markets Development Company has received a $50 million allocation in New Markets Tax Credits from the U.S. Department of the Treasury’s Community Development Financial Institutions Fund.
An affiliate of the Fifth Third Community Development Company, LLC (CDC), the Fifth Third New Markets Development Company is one of 104 community development entities across the U.S. to receive an award in the $5 billion Treasury fund allocation announced on Sept. 19.
“One of the primary missions of the Fifth Third CDC is to support low-income communities across our footprint that have experienced a legacy of disinvestment, wealth extraction and income disparities,” said Kala Gibson, chief corporate responsibility officer for Fifth Third. “Through initiatives like our place-based neighborhood investment program, we have delivered capital to low-income communities to help build existing community assets and address barriers to economic mobility. This allocation will enable our Community Development Banking team and the Fifth Third CDC to bring exponentially more impact to the communities we serve.”
The New Markets Tax Credit Program helps economically distressed communities attract private investment capital. The federal tax credit helps to fill project financing gaps by enabling investors to make larger investments than would otherwise be possible. Communities benefit from the jobs associated with investments in manufacturing, retail and technology, as well as from greater access to housing and public facilities such as health, education and childcare.
The Fifth Third CDC invests in real estate developments across the Bank’s 11-state footprint to help communities thrive. These investments can include affordable housing, small business spaces or community facilities. Often, the projects enable access to essential services for residents, including financial education, social programming and greenspaces for recreation.
"This allocation demonstrates that Fifth Third’s innovative, place-based approach to working in neighborhoods and working at a neighborhood scale is being recognized nationally. And for neighborhoods across our footprint in which we are engaged, Fifth Third now has yet another tool we can use to drive capital into communities in partnership with them,” said Susan E. Thomas, president of the Fifth Third CDC.
“Of the various federal tax credits, New Markets Tax Credits are the most impactful for driving neighborhood transformation,” Thomas said. “As we have become increasingly active in place-based development and lending, we realized that not having these tax credits as part of our toolkit was hampering our ability to show up for our communities with all of the tools at our disposal.”
The Fifth Third CDC is an experienced NMTC participant as an equity investor and leverage lender in this locally managed federal program. Fifth Third works with a network of Community Development Entities – intermediaries serving low-income communities – to provide funding for qualified projects. Recent Fifth Third CDC investments include CityLink Center in Cincinnati, mHUB in Chicago, and AVW Equipment in Maywood, Illinois.
Community economic development is a cornerstone of Fifth Third’s Neighborhood Program, which creates and implements innovative place-based strategies to effect positive change in nine historically disinvested neighborhoods across the Bank’s footprint.
Launched in 2021, Fifth Third’s Neighborhood Program is pioneering a new way to do community development by partnering with local organizations to build ecosystems that drive real change through both financial and social investments. This collective ecosystem approach is focused on identifying solutions to key challenges in partnership with the community, with the goal of creating lasting, transformative change.
In December 2023, Fifth Third announced that its $180 million, three-year commitment to the Neighborhood Program had been met and exceeded early, reaching $187 million in just two years. Fifth Third has extended technical assistance for the program through 2025 to ensure continued, sustained impact and progress.
About Fifth Third
Fifth Third is a bank that’s as long on innovation as it is on history. Since 1858, we’ve been helping individuals, families, businesses and communities grow through smart financial services that improve lives. Our list of firsts is extensive, and it’s one that continues to expand as we explore the intersection of tech-driven innovation, dedicated people and focused community impact. Fifth Third is one of the few U.S.-based banks to have been named among Ethisphere’s World’s Most Ethical Companies® for several years. With a commitment to taking care of our customers, employees, communities and shareholders, our goal is not only to be the nation’s highest performing regional bank, but to be the bank people most value and trust.
Fifth Third Bank, National Association is a federally chartered institution. Fifth Third Bancorp is the indirect parent company of Fifth Third Bank and its common stock is traded on the NASDAQ® Global Select Market under the symbol "FITB." Investor information and press releases can be viewed at www.53.com. Deposit and credit products provided by Fifth Third Bank, National Association. Member FDIC.
About the New Markets Tax Credit Program
The New Markets Tax Credit Program, established by Congress in December 2000, permits individual and corporate taxpayers to receive a non-refundable tax credit against federal income taxes for making equity investments in financial intermediaries known as Community Development Entities (CDEs). CDEs that receive the tax credit allocation authority under the program are domestic corporations or partnerships that provide loans, investments, or financial counseling in low-income urban and rural communities. The tax credit provided to the investor totals 39% of the cost of the investment and is claimed over a seven-year period. The CDEs in turn use the capital raised to make investments in low-income communities. CDEs must apply annually to the CDFI Fund to compete for New Markets Tax Credit Program allocation authority. Since the inception of the NMTC Program, the CDFI Fund has completed 20 allocation rounds and has made 1,667 awards totaling $81 billion in tax allocation authority. This includes $3 billion in Recovery Act Awards and $1 billion of special allocation authority used for the recovery and redevelopment of the Gulf Opportunity Zone.
To learn more about the New Markets Tax Credit Program, please visit www.cdfifund.gov/nmtc.
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