A group of Black investors based in Atlanta has agreed to buy a white-owned bank, Holladay Bank & Trust, and convert it into a Black-owned one. The investors include Dr. Bernice A. King, a daughter of civil rights icon Dr. Martin Luther King Jr; Ashley D. Bell, a former White House policy adviser, and former NFL player Dhani Jones.
They plan to rename the institution Redemption Bank, according to Atlanta Journal-Constitution (AJC). What is more, the investors want to target financial services to Black communities historically underserved by financial institutions, providing online banking services and small business loans.
The deal, which is awaiting regulatory approval, will mark the first time Black investors purchased a non-Black bank. It will also be the first time in American history that an existing commercial bank would become a Black-owned Minority Depository Institution (“MDI”) through acquisition, a statement by Redemption Holding Company said.
“There’s never been a Black bank created through the acquisition of a non-Black bank,” Bell told Americanbanker. The platform adds that the investors plan to build the $68 million-asset institution into a national Small Business Administration 7(a) lender.
Bell will act as the executive chairman and CEO of Redemption Holding Co. while King will serve as the bank’s senior vice president for corporate strategy and alliances and sit on its advisory board.
Bell and King previously co-founded the National Black Bank Foundation, which has steered $600 million of deal flow into Black banks since 2020, according to the statement. Data cited by AJC shows that in 2001, there were 48 Black-owned banks insured by the FDIC, however, that number has reduced to about 20 now.
Bell told AJC that more Black banks are critical for financial inclusion and wealth generation. He explained that the U.S. system has historically denied Blacks the opportunity to build wealth.
“This system has offered no grace and no mercy for Black people in our country,” Bell said. “We think that having a bank called Redemption, where grace and mercy will be bountiful for people who need it, is important.”
Holladay currently has only one branch and according to Federal Deposit Insurance Corp records, it currently has only 10 employees and ended 2022 with $68 million in loans and other assets under management. Holladay’s current management and staff will remain until the conclusion of the deal. They will be complemented by an experienced management team.