U.S. minority depository institutions posted strong growth and profitability in 2021, and 2022 could be another good year amid efforts to boost "mission-driven" banks.
At year-end 2021, there were 143 minority depository institutions, or MDIs, insured by the Federal Deposit Insurance Corp., up from 142 at the end of 2020, the first annual increase since 2014 when there were 175 MDIs, according to FDIC data.
Last September, the FDIC announced a new Mission-Driven Bank Fund that would provide capital investments for MDIs and community development financial institutions. Microsoft Corp., Truist Financial Corp. and Discovery Inc. signed on to invest a combined $120 million and additional investments are expected.
Altogether, the 143 U.S. MDIs posted a median 1.22% return on average assets, besting the national median for all banks and thrifts by 13 basis points, according to S&P Global Market Intelligence data. Loans grew by a median 5.3% at MDIs and deposits by 15.6%, compared to the national medians of 2.1% and 12.0%, respectively.
Asian, Pacific Islander-American MDIs
The 73 Asian-American or Pacific Islander American MDIs bested the broader U.S. median in all five of the major banking metrics examined; however, the group's loan and deposit growth was below the MDI median.
Los Angeles-based RBB Bancorp, the parent company of Royal Business Bank, the seventh-largest Asian-American MDI in the U.S. by assets, has had an eventful couple of months. On Dec. 28, 2021, RBB announced that it would acquire Oakland, Calif.-based Gateway Bank F.S.B., another Asian-American MDI. In an interview with Market Intelligence in January, then CFO Dave Morris said the bank also hoped to pursue deals with two other Bay Area Asian-American banks: San Francisco-based Bank of the Orient and Oakland-based Metropolitan Bank.
Since then, Morris has been named interim CEO following CEO Alan Thian's abrupt leave of absence pending an internal investigation by RBB's board of directors.
Black, African American MDIs
Median deposit and loan growth at Black or African American MDIs outpaced the national median in 2021 as the #BankBlack movement continued to pay dividends. However, the group's median 0.69% ROAA and 1.67% nonperforming assets ratio trailed the national mark by a wide margin.
In late February, the Federal Reserve Bank of Atlanta approved Savannah, Ga.-based Carver State Bank's acquisition of Birmingham, Ala.-based Alamerica Bank, the smallest U.S. MDI at $16.0 million in assets.
Hispanic American MDIs
The country's 31 Hispanic-American MDIs saw loans drop by a median 3.3% in 2021, making it the only MDI group to post a median decline in loans last year. Among the group's 20 largest banks by assets, nine saw loans decline in 2021.
Native American, Alaskan Native American MDIs
Overall, Native American MDIs bested the national median in four of the five metrics examined, only coming up short on the median nonperforming assets ratio, which was 4 basis points higher than the national median.
Shawnee, Okla.-based First National Bank and Trust Co. shot up the ranks to the No. 2 spot by assets among Native American MDIs at the end of 2021 after the company acquired Oklahoma City-based MidWest Community Financial Corp. in July and more than doubled in size.
