A group of Atlanta-based Black investors has decided to buy a white-owned bank, Holladay Bank & Trust, and convert it to a Black-owned bank. Dr. Bernice A. King, a civil rights icon’s daughter; Ashley D. Bell, a former White House policy assistant; and former NFL star Dhani Jones are among the investors.
According to the Atlanta Journal-Constitution, they intend to rename the institution Redemption Bank (AJC). Furthermore, the investors intend to provide online banking services and small business loans to Black communities that have historically been underserved by financial institutions.
The transaction, which is subject to regulatory approval, will be the first time that Black investors have purchased a non-Black bank. It will also be the first time in American history that an existing commercial bank will be acquired by a Black-owned Minority Depository Institution (“MDI”), according to a Redemption Holding Corporation statement.
“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.
Redemption Holding Co.’s executive chairman and CEO will be Bell, while King will be the bank’s senior vice president for corporate strategy and alliances and a member of its advisory board.
According to the announcement, Bell and King previously co-founded the National Black Bank Foundation, which has directed $600 million in deal flow into Black banks since 2020. According to AJC data, there were 48 Black-owned banks insured by the FDIC in 2001, but that number has since dropped to around 20.
According to Bell, more Black banks are important for financial inclusion and wealth creation. He argued that the American economic system has always denied Blacks the ability to accumulate riches.
“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 now has only one branch and, according to FDIC statistics, and ten workers. It finished 2022 with $68 million in loans and other assets under administration. Holladay’s present management and personnel will stay in place until the transaction is completed. An experienced management staff will support them.
