iStock photo

First Citizens Bank and a coalition of local and national community development groups have announced a deal that will see the bank set aside $6.5 billion for housing development and other loans and grants in Eastern Massachusetts and Northern California.

The community benefits package unveiled Tuesday is tied to First Citizens’ purchase of Silicon Valley Bank after its failure in March, and resolves significant concerns local community development nonprofits had that First Citizens would abandon funding commitments SVB had made before its failure in deals tied to its own 2021 acquisition of Boston Private Bank & Trust. Following its failure, SVB’s core banking business continues to operate as a unit of First Citizens branded as “SVB Commercial.”

“This agreement is a huge relief for the communities that stood to lose out on new investments and programming when control of Silicon Valley Bank was assumed by the FDIC in March – and a testament to First Citizens’ depth of commitment to the values we share,” Jesse Van Tol, president and CEO of the National Community Reinvestment Coalition, said in a statement. “First Citizens is honoring SVB’s obligations where others might not have. Their eagerness to listen to and learn from our members, backed with this expansion of our previous community benefits agreement in 2021, should be an example to the industry. This is how you show you’re serious about uplifting the most neglected communities in your service area.”

The deal between First Citizens and NCRC, California groups Rise Economy and The Greenlining Institute, the Massachusetts Affordable Housing Alliance (MAHA) and the Massachusetts Association of Community Development Corporations will see $650 million in bank capital set aside for home mortgages for low- and moderate-income borrowers and in selected low- and moderate-income census tracts. Another $2.5 billion will be put towards small business lending, while $3.5 billion is being committed to real estate development loans to and equity investments in affordable housing projects. The deal “recognizes pre-existing Silicon Valley Bank relationships,” First Citizens said.

“For its entire 125-year history, First Citizens Bank has taken great pride in our continuing efforts to support clients, customers and associates, as well as the communities in which we live and work,” First Citizens chairman and CEO Frank B. Holding Jr. said in a statement. “This addendum is a testament to that ongoing commitment as we extend our legacy of giving back to the cities and towns we serve, while also helping grow vibrant and diverse communities and businesses.”

First Citizens said it is also committing to give out $35 million in Community Reinvestment Act grants and other contributions, including $10 million towards an unspecified home mortgage subsidy program.

“We thank First Citizens Bank for this commitment to continue Silicon Valley Bank’s investments in LMI communities and households in greater Boston and providing new resources to assist first-time homebuyers, small businesses, and nonprofits,” MAHA executive director Symone Crawford said in a statement provided by First Citizens. “If we are to narrow the racial homeownership gap, we need financial institutions to do more in programs like ONE Mortgage and ONE+Boston. FCB’s commitment is doing just that.”

Prior to SVB’s failure, it had already spent $3.1 billion of a planned $11.2 billion community benefits plan tied to the Boston Private merger, First Citizens said.

“We look forward to working with First Citizens Bank as they continue the commitments made by Silicon Valley Bank to support community development in the Commonwealth,” MACDC CEO Emily Haber said in a statement provided by First Citizens. “We are pleased that the bank recognizes the role that small businesses play in the health and vitality of our Massachusetts communities and the critical need to support development of affordable housing and access to homeownership for Low and Moderate-Income residents.”