How can we leverage our company’s balance sheet to benefit the community?

That’s the question that BJC leadership asked me in 2021. Painfully aware of the connection between health and wealth, they knew that conditions in the community had to change in order to see real improvements in people’s health.

Our answer? Impact Banking. Impact Banking creates a virtuous loop that has the power to transform our region. It begins when anchor institutions, investors, and individuals deposit capital in locally focused banks that are committed to shared prosperity. The banks in turn responsibly invest more in underserved areas to create opportunities for families to buy homes, start or scale business, invest in education, and have emergency funds available. With a goal to improve health equity in the region, BJC opened an Impact Banking account at Midwest BankCentre, where their deposits would be loaned in areas with historical underinvestment. Areas where people were previously unbanked and at the mercy of predatory payday loans, where health disparities were highest. These deposits have allowed the Bank to responsibly take on a bit more credit risk so we could invest in more home and small business loans, resulting in more opportunities and the chance to build wealth.

For more than a decade, an increasing number of investors and consumers have been calling for their money to make a positive impact on society and the world at large, while earning a reasonable profit. This level of intentionality is focused on ensuring a healthier marketplace that is sustainable into the future. Responsible investing in the capital markets is a necessary but insufficient condition to improve society.

Impact Banking is the natural next step to a responsible capital market investing approach with the distinct advantage of being hyper-local and even more accessible because it’s on Main Street. It’s more accessible because everyday people and companies on Main Street can get involved with local community banks. Community bankers know our community. They live and work here. They understand its persistent challenges and where investment is needed most. They have relationships with community organizations that bring about real change.

Currently, there are over $120 billion in deposits held in St. Louis area banks. Less than a third of them are held at locally owned banks. Imagine the impact of redirecting even a portion of those deposits to community banks that have a laser-like focus on our regional well-being. Think of the ripple effect those deposits would have as they put more people on the path to prosperity.

My hope is that you as residents, business leaders, investors, and anchor institutions see the outsized role that you can play. More capital invested in these community focused banks means more loans and more opportunities for underserved communities. Impact Banking is how we create safer, more vibrant neighborhoods and fuel the growth of our local economy. It is how we close health and wealth gaps.

Since 1906, Midwest BankCentre has been St. Louis’ premier community bank. Ninety five out of every $100 deposited with us is reinvested back into the St. Louis region where it’s needed most. If you’re interested in leveraging your dollars to do more good, I encourage you to reach out to me at HeyOrvSTL@MidwestBankCentre.com. Where you bank matters.

Originally published in the St. Louis Business Journals Ask The Expert Column on 6/23/2023 by Orv Kimbrough, Chairman and CEO.