Properly designed community bank investments can serve social goals, while lowering risk and enhancing return.
Between 2012 and 2015, for example, one of our banks made over $150 million in loans for the development of solar projects, filling a critical market niche in smaller and mid-size commercial solar development. Our investment of $39 million in equity capital helped make this lending possible. For an investor seeking a positive environmental impact, this represented $3.85 of impact lending for every $1 of invested equity.
Another bank in our portfolio has made over $200 million in loans to businesses operating in LMI areas. For investors interested in supporting economic activity in these underserved areas, this represented over $2.00 in impact funding for every $1 in invested equity.
Certain investors are interested in supporting economic activity in their own state or region. Our investors include Los Angeles based pension funds, for example. Their total investment of $25 million in equity helped support over $180 million in lending to businesses and consumers in the City of Los Angeles.
Impact investing through community banks can offer an effective and promising approach to balancing return objectives and social goals.