State Street Announces Three Additional Bank Partnerships to Support Minority Depository Institutions and Community Development Financial Institutions

Rhea-AI Summary

State Street (NYSE: STT) has completed its $100 million initiative launched in 2024 by placing additional deposits through three institutions: Liberty Bank, Native American Bank, and Sunrise Banks. This initiative aims to expand access to financial services through Minority Depository Institutions (MDIs) and Community Development Financial Institutions (CDFIs).

Liberty Bank, the largest Black-owned financial institution in the US, operates across 11 states with assets exceeding $1 billion. Native American Bank is the only national American Indian owned community development bank in the country. Sunrise Banks, certified as a CDFI, focuses on social responsibility and community impact in Minneapolis/St. Paul and Sioux Falls.

Positive

• Completed $100 million investment initiative in MDIs and CDFIs
• Strategic expansion of financial market ecosystem through partnerships
• Partnership with Liberty Bank, the largest Black-owned financial institution with $1B+ in assets

Negative

• None.

Insights

Financial Industry Expert

The completion of State Street's $100 million MDI and CDFI initiative represents a strategic move in the banking sector with multiple business implications. The partnerships with Liberty Bank, Native American Bank and Sunrise Banks demonstrate a calculated approach to expand market presence while addressing regulatory expectations around Community Reinvestment Act (CRA) compliance.

This initiative goes beyond corporate social responsibility - it's a shrewd business strategy that positions State Street advantageously in several ways:

• Enhanced regulatory relationships and CRA compliance positioning
• Access to untapped market segments through partner institutions
• Risk diversification through strategic deposit placement
• Potential for new business opportunities in underserved markets

The selection of these specific partner banks is particularly noteworthy - Liberty Bank's position as the largest Black-owned financial institution with over $1 billion in assets, Native American Bank's unique position in tribal finance and Sunrise Banks' dual CDFI-B Corp certification create a diversified partnership portfolio that maximizes both impact and business potential.

Market Research Analyst

The market implications of this initiative extend beyond immediate financial impact. The strategic timing aligns with increasing investor focus on social impact investments and regulatory scrutiny of financial inclusion. The program's completion signals State Street's proactive stance in addressing these market dynamics.

The partnership structure creates a multiplier effect:

• Direct deposit funding provides partner banks with stable, low-cost capital for community lending
• Enhanced liquidity enables partner banks to expand their lending capacity
• Increased community development activity can generate new revenue streams

This positions State Street favorably amid growing institutional investor emphasis on ESG metrics and social impact measurements. The structured approach to deploying capital through established MDIs and CDFIs reduces execution risk while maintaining strong potential for community impact.

Banking Operations Specialist

The operational execution of this initiative reveals sophisticated treasury management strategy. By distributing $100 million across multiple partner institutions, State Street optimizes its deposit placement while managing concentration risk. The selection of partners with diverse geographical footprints - spanning 11 states through Liberty Bank alone - creates an efficient distribution network for capital deployment.

Key operational advantages include:

• Diversified deposit base across multiple institutions
• Enhanced liquidity management through structured partnerships
• Operational efficiency through established MDI/CDFI infrastructure
• Scalable framework for potential future expansion

The completion of this initiative on schedule demonstrates strong execution capabilities and sets a foundation for potential expansion of similar programs in the future.

• Latest placements mark the completion of the firm’s $100 million initiative that launched earlier in 2024

BOSTON--(BUSINESS WIRE)-- State Street Corporation (NYSE: STT) today announced that it has placed an additional round of deposits through three Minority Depository Institutions (MDIs) and Community Development Financial Institutions (CDFIs), Liberty Bank, Native American Bank and Sunrise Banks. These placements also mark the completion of the firm’s $100 million initiative that launched earlier in 2024 and designed to expand access to financial services through MDIs and CDFIs.

“Today marks a significant milestone in our commitment to foster economic inclusion and drive positive change in communities across the US,” said Kimberly DeTrask, executive vice president and treasurer at State Street. “We are pleased to welcome three new partner banks to our MDI and CDFI initiative, and to meet our $100 million investment target. State Street is proud to continue to leverage its resources to help create opportunities and empower communities for the long term.”

Earlier this year, State Street announced its goal to invest $100 million to facilitate low-cost, stable deposit funding to MDIs and CDFIs, to support the firm’s broader business strategy to expand the financial market ecosystem and help unlock economic potential by encouraging long term growth and job creation. This program builds upon State Street’s actions to advance racial equity. In 2020, State Street announced its 10 Actions to Address Racism and Inequality, a 10-point action plan with the ultimate goal of helping to end systemic racism in our communities. Additionally, the firm completed an independent Civil Rights Audit, which provided recommended actions to help establish State Street as an industry leader in advancing civil rights and racial equity.

Liberty Bank and Trust Company, chartered in New Orleans, Louisiana in 1972, stands as the largest Black-owned financial institution in the United States. With a footprint across 11 states and assets of more than $1 billion, Liberty was founded to empower possibility in underserved communities by providing equitable access to quality financial services. Their efforts focus on growing small businesses, facilitating homeownership, alleviating debt burdens, generating job opportunities, and fostering meaningful and lasting economic impact.

"We are grateful for State Street Corporation’s intentionality in supporting Community Development Financial Institutions,” said Todd McDonald, president of Liberty Bank and Trust Company. "This partnership will help address community inequities and advance our financial inclusion and economic empowerment mission at Liberty Bank."

Native American Bank, N.A. was chartered as a national community development focused bank. Committed to being a self-sustaining CDFI, Native American Bank is the only national American Indian owned community development bank in the country. The bank proudly received an “outstanding” on the most recent Community Reinvestment Act (CRA) exam. Their primary mission is to assist Native American and Alaskan Native individuals, enterprises and governments to reach their goals by providing affordable and flexible banking and financial services.

“Native American Bank is particularly grateful for the partnership with State Street,” said Tom Ogaard, president and CEO of Native American Bank. “Their financial support will make a significant difference in our mission to bring access to capital in Indian Country.”

Sunrise Banks is no ordinary bank; it strives to be a place where money and values meet for their customers and communities. They do this by prioritizing social responsibility, community impact and environmental sustainability alongside their essential financial products and services. With locations in Minneapolis/St. Paul, Minnesota and Sioux Falls, South Dakota, Sunrise Banks seeks to build meaningful relationships, empower financial wellness and drive positive change.

Sunrise Banks is certified by the U.S. Treasury as a Community Development Financial Institution (CDFI), a designation earned by approximately 100 banks nationwide. Sunrise Banks is also a member of the Global Alliance for Banking on Values and a certified B Corp for its demonstrated commitment to transparent corporate governance and positive community impact.

“As a values-based bank, we strive to be a force for good for our customers and communities every day,” says David Reiling, president and CEO of Sunrise Banks. “With this mission-based deposit through State Street, we will be able to invest in more projects and initiatives designed to empower financial wellness, foster inclusivity, and support economic growth. We appreciate the trust State Street is putting into how Sunrise Banks builds and uplifts these relationships so we can all make sustainable choices for a better future.”

Click here to learn more about the ways in which State Street has continued to advance this mission.

About State Street Corporation

State Street Corporation (NYSE: STT) is one of the world's leading providers of financial services to institutional investors including investment servicing, investment management and investment research and trading. With $46.8 trillion in assets under custody and/or administration and $4.7 trillion* in assets under management as of September 30, 2024, State Street operates globally in more than 100 geographic markets and employs approximately 53,000 worldwide. For more information, visit State Street's website at www.statestreet.com.

* Assets under management as of September 30, 2024 includes approximately $83 billion of assets with respect to SPDR® products for which State Street Global Advisors Funds Distributors, LLC (“SSGA FD”) acts solely as the marketing agent. SSGA FD and State Street Global Advisors are affiliated.

© 2024 State Street Corporation

View source version on businesswire.com: https://www.businesswire.com/news/home/20241219920174/en/

Media Contact:

Brendan Paul

Mobile: +1 401 644 9182

Bpaul2@statestreet.com

Source: State Street Corporation

FAQ

What is the value of State Street's (STT) MDI and CDFI investment initiative completed in 2024?

State Street completed a $100 million investment initiative in Minority Depository Institutions (MDIs) and Community Development Financial Institutions (CDFIs) in 2024.

Which three banks did State Street (STT) partner with in its latest deposit placement?

State Street partnered with Liberty Bank, Native American Bank, and Sunrise Banks in its latest deposit placement.

How many states does Liberty Bank, State Street's new partner, operate in?

Liberty Bank, one of State Street's new partner banks, operates across 11 states.

What is the significance of Native American Bank in State Street's (STT) partnership program?

Native American Bank is the only national American Indian owned community development bank in the country and received an 'outstanding' Community Reinvestment Act rating.

How does State Street's (STT) investment initiative align with its broader strategy?

The initiative aligns with State Street's broader business strategy to expand the financial market ecosystem and help unlock economic potential by encouraging long-term growth and job creation.