Continental Bank, Shell unite for minority loan
By Mindy Hagen
Locally based Continental National Bank is teaming with Shell Oil Co. to extend loans to minority and women business owners through Shell's Community Banking Initiative.
Shell will give Continental $7.5 million a year for community development loans. It also made a $1 million deposit in the bank and gave $250,000 for a non-controlling equity interest.
The initiative was developed by the oil company to help the company participate in the revitalization of under-served communities, said Shell treasurer Ron Leftwich in a prepared release. Mr. Leftwich said the alliance between Shell and Continental create jobs and aid community development in Miami-Dade County and assist the bank in providing more financing.
Continental, a $165 million community bank with six branches in Miami-Dade, becomes the fifth bank in the US to be a part of the initiative and is the only institution in the Southeast.
A. Buster Castiglia, Continental's president and chief operating
officer, said the alliance allows the bank to continue its mission of supporting low- to moderate-income community development
"Most of our branches are located in lower-economic areas of the county as our focus is to loan money to minorities and women-owned business," Mr. Castiglia said. "Partnering with Shell allows us to achieve that goal."
Mr. Castiglia said Continental was approached by Shell 10 months ago about applying to be a part of the initiative. Shell let the bank know in March that it was selected to be the program's Southeast representative. The agreement was signed in April.
Continental's status as one of only 40 banks in the US designated as a certified development financial institution (CDFI) was a major reason it was selected, Mr. Castiglia said.
"To be approved as a CDFI by the Department of Treasury, a bank must show that a minimum of 60% of its loans are extended in census tracts at or below poverty," Mr. Castiglia said. "We met the quota with 62% and that favored heavily in Shell's decision."
The bank also recently won a $326,000 award from the Department of Treasury's Bank Enterprise Awards Program in recognition of its activities in community development
Mr. Castiglia said the alliance with Shell will allow the bank to lend 40% above its legal lending limit, giving it more leverage in its allocating its resources.
Continental is in the process of using the $7.5 million to dole out loans to minority and women business owners, with one proposal already earmarked. All loan extensions within the oil company's allocation are subject to approval by Shell as part of the partnership.
The alliance agreement mandates the relationship between Shell and Continental will go unchanged until the initiative ends. Mr. Castiglia said he is interested in increasing his bank's relationship will the oil company.
"If the community development initiative is successful, we expect it to be expanded," Mr. Castiglia said. "Continental National Bank wants more opportunities to work with Shell in the future."