City First. A Different Kind of Business Banking
In 1993, two dozen community development leaders gathered in a Washington, DC church basement, concerned about the toll on low-income neighborhoods from decades of disinvestment and discrimination. Without access to credit and other financial services, people and neighborhoods in DC were missing opportunities and being left behind.
In the church basement that day, there was energy, commitment, and determination to make a difference. Led by John Hamilton, the group grew to include Lloyd Smith of the Marshall Heights Community Development Corporation, Debbi Hurd Baptist of Freddie Mac, Gibson Dunn partner Chuck Muckenfuss, Bob Moore of the Development Corporation of Columbia Heights, and dozens of other committed citizens. Confident that the marketplace could do a better job, these leaders worked to create a financial institution to help neighborhoods that had been ignored. From that meeting began the arduous, five-year process to create Washington, DC’s first and only bank focused solely on community development.
City First Bank opened its doors in late 1998 with Debbi Hurd Baptist as CEO and Lloyd Smith as Chairman. The bank launched with $9.4 million invested from public and private sources, including Georgetown University, Bank of America, Wachovia, Fannie Mae, the Cooperative Assistance Fund, National Community Investment Fund and the federal and DC governments.
In 1999, City First made its first loans and was certified as a community development financial institution, CDFI, reflecting its commitment to under-served communities. This designation allowed City First to expand its services and develop the New Markets Tax Credit (NMTC) program that has supported anchor DC projects such as the Tivoli in Columbia Heights, the Atlas Theater in Northeast Washington, THEARC, a community center in Southeast Washington, Bread for the City, Habitat for Humanity, Mary’s Center, and many others.
In its first twelve years, City First has grown to almost $170 million in assets. To date it has lent more than $300 million to borrowers, predominantly in DC’s low- and moderate-income neighborhoods, helping to create or retain almost 3,000 jobs, and create nearly 5,000 special needs, transitional and affordable housing units. City First has become a national leader in high impact New Markets Tax Credit projects, attracting $370 million in tax credit authority to support community facilities and neighborhood revitalization. City First continues to work every day responsibly to offer loans and other financial services that help businesses such as Pete’s New Haven Style A’Pizza and Kinetik Communications Graphics, grow, prosper and create jobs as well as to support charter schools, day-care centers, neighborhood health facilities, and other pivotal community organizations.
While City First has focused on the most challenging segment of the banking market, it has done so within a sound framework, consistently showing a profit in each of the last five years (and all but one of the preceding five year period) while maintaining a low average loss rate.