Community Bank Profile: City First Bank
On November 7, 2013, City First Bank of Washington, DC held its inaugural Finance Summit, which brought together businesses and representatives of the district’s government to talk about the work that is being done to finance economic development in the city while supporting the community at all levels.
We caught up with City First president, Brian Argrett, after the Finance Summit and spoke with him about the event and how City First supports community development, maintains its double bottom-line focus, and manages the challenges of community development banking.
Promontory Interfinancial Network: Thanks for taking the time to speak with us. We’ve long known about the impact that your bank has had on Washington, DC’s economic development, but that message really hit home at the Finance Summit. What do you hope attendees took away from the event?
Mr. Argrett: We wanted to provide a forum for real dialogue about economic equality within the growth of Washington, DC. The Financial Summit gave us an opportunity to bring together parties from economically diverse parts of the city and talk about what we have done, how various parts of the city have evolved, and how we can apply that learning to other areas.
Our hope is that people came away from the summit with a sense of empowerment and with a better awareness of whom they can collaborate with to make a difference.
Q: What do you feel is the greatest economic challenge that Washington, DC currently faces?
A: Washington, DC’s biggest challenge is balancing its growth. We have experienced extraordinary changes in the demographics of the city, and the pace of that change is accelerating. These changes can be seen in demographic shifts in age, race, culture, and income. It’s a real challenge to continue to fuel economic growth and welcome newcomers while still supporting long-time residents with a level of economic parity so that entire communities are not left out in the process.
Q: How do you balance your double-bottom line focus of helping investors to earn a return on funds while also supporting community growth?
A: Our first job is maintaining a healthy balance between making a positive impact for the communities we serve and generating return for our clients, shareholders, and employees. Many organizations prioritize one over the other. We emphasize both. Keeping this balance is very demanding. We need to give just as much focus to how our business is run as we do to the impact we are making in the community.
But we don’t know any other way than to pursue this balance of impact and return. You cannot focus solely on maximizing profits; that’s just exploiting a niche. And if you focus solely on social impact, you exhaust your resources. Instead, we are trying to achieve excellent results on both sides of the equation and work with people who value a fair economic return along with an important social return.
Q: Are there any projects that are representative of what can be achieved by City First’s approach?
A: I should first say that the real heavy lifting is not done by us, but by the people we finance. It is really our customers who achieve the greatest impact.
In our new markets practice, we worked with Central Union Mission, a 130-year-old organization that was originally founded to shelter men returning from the Civil War and which continues to serve those who have been forgotten by society. We helped the organization to attract and manage funds that allowed it to relocate its inefficient, cramped, and costly facility from 14th and R Streets Northwest, a rapidly gentrifying area, to a beautifully renovated facility at the historic Gales School, in an area of the city with great need for support and care.
Meanwhile, on the commercial side, we have a project – Copeland Manor, which is in the Marshall Heights area of Southeast Washington, where we have done a lot of work. We worked with the developers and owners to renovate this 61-unit affordable housing project, helping it to become sustainable over the long term. We spent a significant amount of time figuring out the structure of the financing, and we were really proud to help get it done.
Q: What do you feel are the biggest challenges facing community development banking, and what is City First doing to prepare for those challenges lying ahead?
A: The number one challenge is simple: raising capital. It is hard to aggregate capital in community banking and when you add the components of balance and scale – at $220 million in assets we are considered mid-sized among community development banks – it becomes even more difficult.
For community development banks, the most effective way to attract capital is to share the story of what we do and how we do it, which is why I put the task of communicating our story at the very top of the list of things we’re doing.
Beyond sharing our story, we are working on innovative tools for creating a secondary market. Without a secondary market, community banks have limited ability to generate liquidity, which compounds the problem of capital. As the Vice Chair of the Community Development Bankers Association, I am part of a team that is figuring out how to support a secondary market that would help capital flow down into the community development space to further support communities. The project is still in process, but it’s a promising idea that could do a lot to advance the impact of community development banks across the country, not just in Washington, DC.
For more information about City First Bank, visit www.cityfirstbank.com
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