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Pinpoint investments, loans helping BBVA Compass change lives

Halfway into its five-year, $11 billion commitment to serving low- to moderate-income communities, BBVA Compass has made tens of thousands of pinpoint investments and loans that have changed lives and created opportunities.

BBVA Compass announced its intent to strengthen the communities it serves in late 2014, pledging over five years to originate $2.1 billion in mortgage loans to low- and moderate-income homebuyers and in LMI neighborhoods, $6.2 billion for small business lending, $1.8 billion for community development lending, and to make $900 million in community development investments. After the first two full years, the bank has surpassed its goals and injected more than $5.3 billion into its communities.

I’m enormously proud of what we’ve been able to achieve, and the many lives we’ve been able to change for the better. There’s no greater honor for us as a business”

“We are people serving people,” said BBVA Compass CEO Onur Genç. “At the end of the day, that’s what our commitment is all about. We have dedicated, passionate people who keep their ears to the ground out there in our communities, and they’re helping us find ways to best serve our low- to moderate-income clients. I’m enormously proud of what we’ve been able to achieve, and the many lives we’ve been able to change for the better. There’s no greater honor for us as a business.”

One of the first projects BBVA Compass pursued after the bank made its $11 billion commitment to low- to moderate-income communities in late 2014 came online this year and put 128 low-income Austin families in green homes zoned to some of the area’s best schools. BBVA Compass, working with nonprofit Foundation Communities, financed more than half of the total cost of Lakeline Station Apartments in Northwest Austin. Pictured here is the Learning Center at Lakeline Station Apartments, which will provide a variety of on-site support services, including after-school and summer learning programs, and fitness, nutrition and money management classes.

Focus on affordable housing

BBVA Compass has already put more than 10,000 LMI families into new homes and nearly 50,000 small businesses on firmer capital footing over the first two full years of the commitment. One of its standout efforts in 2016 was in its community development lending and investments that were designed to boost the stock of affordable housing across the bank’s footprint. It dedicated nearly $600 million to affordable-housing projects in 2016 alone, making an array of investments and loans that eventually will put more than 5,000 units of affordable housing across 34 communities.

Some of the projects the bank pursued have already come online, putting faces and names to the lives BBVA Compass is affecting. One of the first to debut was Lakeline Station Apartments in Northwest Austin, which is putting 128 low-income Austin families in green homes zoned to some of the area’s best schools. BBVA Compass provided over $20 million of financing for Lakeline, including a $5.5 million permanent loan and $15 million of equity investment through the federal Low-Income Housing Tax Credit program, which gives investors a dollar-for-dollar tax credit for investing in affordable housing.

Keith Murphy, a current resident, grew up in the foster-care system and experienced a series of hardships before he met his wife and they embarked on a life together. Before landing at Lakeline, Murphy and his wife and their three children were living with relatives in a two-bedroom apartment, and he was struggling to make ends meet.

Living at Lakeline has been like a dream come true for us,” Murphy said. “My children are my world and I’m determined that when they look back on their lives, their memories will be full of joy instead of pain. I don’t want them to experience hardship. I want to be the best father. I want them to be happy and healthy and know that I’ll always be there for them. At Lakeline, we found a home where we can live up to our potential and keep dreaming.”

A number of other BBVA Compass-financed projects are in the works for homeless veterans, low-income seniors and those with special needs.

BBVA Compass and LiftFund, the nation’s largest nonprofit small business lender, celebrated the grand opening in San Antonio  of the BBVA Compass LiftFund Lending and Learning Center, named in honor of the BBVA Compass Foundation’s $1 million gift to assist in the development of entrepreneurs and small businesses.

Shoring up small businesses

BBVA Compass has also been keenly focused on serving small businesses. Over the first two years of the $11 billion commitment, it’s done $2.3 billion in small-business lending, well above its goal each year. In fact, for the fiscal year that ended Sept. 30, 2016, BBVA Compass approved 1,801 loans under the Small Business Administration’s flagship 7(a) loan program, becoming the program’s fifth most-active lender by total number of loans and 10th by dollar volume. The SBA is the No. 1 provider of long-term financing for small businesses, and the 7(a) loan is by far the SBA’s most popular program.

“Those numbers tell you that we’re punching way above our weight when it comes to shoring up small businesses, one of the most important pillars of any community,” said Genç. “We’re the 22nd-largest bank by deposit market share, but we’re beating out some of the nation’s biggest banks to land at No. 5 on that SBA list.”

BBVA Compass also identified branches that have very high concentrations of small businesses within a 5-mile radius, and gave those branch managers advanced training so they can better meet the lending needs of micro-businesses with less than $1 million in annual sales. And it developed its own proprietary training program for small businesses that teach them about obtaining credit and developing business plans.

Financial education is a key focus of BBVA Compass’ community efforts. It held a series of workshops across its footprint in June on the ins and outs of becoming a homeowner. The curriculum taught about homebuying and mortgage application process, different types and sources of mortgages and how they work, lenders, and strategies to financially prepare for owning a home.

A comprehensive, creative effort

The bank has announced a number of other initiatives to serve LMI individuals and areas since its initial pledge in late 2014, among them the HOME mortgage program, which allows qualifying borrowers to finance up to 100 percent of a home’s value. It also set up a 19-member community advisory board that consists of national and local market community leaders from across the bank’s footprint. The community advisory board is helping to guide the bank’s continuing efforts to better serve LMI individuals and neighborhoods and strengthen its community development program.

“I’ve been most impressed with the infrastructure the bank built to meet its commitment to invest the $11 billion,” said Orson Aguilar, president of the Greenlining Institute and one of the members of the BBVA Compass Community Advisory Board. “There’s full commitment from the very top with the CEO, and great people involved at every other level. So it’s no surprise we’ve seen tremendous advancement in all of the focus areas.”

The bank’s award-winning mobile app also started playing a more central role in efforts to serve the underserved after BBVA Compass economists found that technology — access to the internet, to smartphones, to mobile devices — is a key factor in whether a community boasts high levels of financial inclusion. In fact, the economists found, internet access matters more than someone’s race or education levels.

Spurred by the economists’ 2015 study, the bank launched a small pilot in 2016 to put internet-connected smartphones in the hands of some of society’s most vulnerable. The bank coordinated with select nonprofit community organizations in Austin, Texas, Riverside, Calif., and Birmingham, Ala., to provide financial literacy education to their clients and offer them the opportunity to receive free prepaid smartphones if they applied for the BBVA Compass ClearSpend prepaid card. The card comes with a budgeting app that empowers users by tracking spending.

We hope this pilot proves that BBVA Compass is a conscientious bank that’s leaning into a digital future and leveraging its creativity to tackle some of society’s most pressing issues

The goal with the pilot was to test the ways BBVA Compass can make an impact on the digital and financial inclusion of underserved communities through mobile internet access.

“This program is powerful because we are approaching the issue of financial inclusion holistically,” said Julieta Falcon, the Underserved and Multicultural Segment Manager for BBVA Compass. “It’s going to help us learn more and better ways to serve these consumers. Above all, we hope this pilot proves that BBVA Compass is a conscientious bank that’s leaning into a digital future and leveraging its creativity to tackle some of society’s most pressing issues.”

For more on the results from the first two years of the bank’s $11 billion commitment, go to bbva.info/11BillionYear2.

Five-Year Community Commitment: Our Commitment Continues to Create Opportunities

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