A Minority Depository Institution (MDI) in Texas serving Hispanic communities with distinction
The southern border of Texas makes up about half of the entire US-Mexican border, resulting in a population in the state that is highly diverse and very Hispanic. Historically, Spanish-speaking populations have had a profound impact on the area, with many places’ names being Spanish in origin. The growth of Hispanic residents in Texas has been huge during recent years, with about 1.5 million Hispanic individuals moving to Texas from 2010 to 2017. The Hispanic population is expected to surpass the white population in the state by as early as 2022. And yet too many Hispanic/Latino individuals continue to face discrimination when attempting to receive loans from traditional banking options.
The Bank of South Texas is a Minority Depository Intuition (MDI), as well as being a CDFI, that serves this growing and vital Hispanic population in the Southern tip of the Lonestar state. On their website, they emphasize their personalized approach to banking service. Established in 1986, this bank’s original focus was to provide farming loans in the region, and they still do a small amount of small-farm lending, which many banking institutions do not.
The statistics we looked at for this bank are impressive: nearly 40% of their lending portfolio is devoted to housing, with 80% of this housing focus being designated to low-and-middle-income lendees. Additionally, 20% of their lending portfolio is used for small business loans in the area. They have a satisfactory CRA rating and meet our benchmarks for return on assets and net loans-to-deposits ratio (which just means what percentage of their assets areat work through lending), showing that they operate proficiently. We would encourage them to advertise their MDI designation on their website and include more Hispanic individuals in the stock images. We would recommend this bank for anyone looking to invest in Hispanic communities in the southern part of Texas, and they offer online banking and have no eligibility requirements for membership, so anyone wanting to invest in this bank is able to do so. Learn more at their website here.