DELLWOOD 鈥� On a sunny September morning last year, hundreds of people gathered in the parking lot of a strip mall that sat vacant for years.
The crowd was eager for the official opening of the R&R Marketplace, which finally filled the space with a host of services designed to boost economic access in and around the small north St. Louis County municipality.
One of those was a new branch from Midwest BankCentre. At the time, bank Chairman and CEO Orvin Kimbrough noted the financial landscape his organization had chosen to move into.
There were dozens of payday loan establishments within five miles, he said.
鈥淭here鈥檚 one right there within eyesight of me,鈥� Kimbrough said, gesturing from the podium he was speaking from. 鈥淥ne of our objectives of opening up this facility 鈥� we want to put them out of business.鈥�
Cheers erupted from the crowd at that declaration.
But more than a year later, Kimbrough admits those payday lending facilities haven鈥檛 been easy to disrupt because, while predatory, they do serve a specific need within a market.
鈥淵ou can鈥檛 talk about displacing those facilities without replacing [them] with something that would meet that particular need,鈥� he said. 鈥淚t鈥檚 very difficult for traditional financial institutions, like banks, to compete in that space and be profitable.鈥�
Kimbrough said his bank is trying to figure it out though, even launching an alternative product to compete with payday loans. But that initial product had to be scrapped because there were too many losses from people who didn鈥檛 pay back their loans, he said.
Midwest BankCentre is revamping it and has plans to start offering it again soon, Kimbrough said.
鈥淲e have to do a better job as a financial services institution of helping create the conditions for people to understand,鈥� he said. 鈥淲e鈥檙e not going to charge you these super expensive rates. We need to be in [a] relationship with you and we expect payback.鈥�
The new branch in Dellwood, which Kimbrough said is the bank鈥檚 鈥渋nnovation center,鈥� is a prime location for experimentation to determine how to forge stronger ties with communities in St. Louis or elsewhere that haven鈥檛 always had strong relationships with banks.
In addition to Midwest BankCentre鈥檚 branch in Dellwood, the Urban League of Metropolitan St. Louis announced this summer it will include a bank in a new $10 million business plaza that broke ground on West Florissant Avenue in August.
Education as a foundation
One of the critical first steps to a lasting banking connection is education, said Ashley O鈥橬eal, Midwest BankCentre鈥檚 senior vice president of retail banking. It鈥檚 about helping people feel comfortable asking financial questions and providing tools for how to evaluate a decision about money, she said.
鈥淚 don鈥檛 want anyone to feel threatened by having a banking relationship,鈥� O鈥橬eal said. 鈥淔or some, they may have had bad interactions with institutions in the past, may have even made some mistakes. But we have an opportunity to help start over and be on the right path moving forward.鈥�
In practice inside the Dellwood Branch, this looks and sounds like normal banking interactions that happen every day. Like the one involving Montrese Gardner, who needed help making a deposit in her checking account.
She was worried she鈥檇 get hit with an overdraft fee after a loan charge posted to her account a few days earlier than it normally does.
鈥淭hey鈥檝e never done it before, and I鈥檝e been paying them over a year,鈥� Gardner explained to O鈥橬eal, who then advised Gardner to contact the company to find out why the debit posted early before helping her make the deposit.
鈥淚f you get an overdraft fee, I will take care of that and reverse it back to the account,鈥� O鈥橬eal said, handing Gardner a business card in case she had further questions.
Gardner, who鈥檚 banked with Midwest Bank Center for more than five years, said she appreciates now having a banking location just a few minutes from home.
鈥淚t saved the drive of going all the way to the city on Martin Luther King,鈥� she said. 鈥淚t鈥檚 very convenient. I stopped class and said, 鈥楲et me go handle this.鈥欌��
After Gardner leaves, O鈥橬eal goes to help Lenzell Green who has come in with a range of questions about different financial products: auto loans, personal loans, credit cards. They chat for about a half-hour about the various loans and credit options and how they work.
鈥淚 just like to see what my options are, especially with my money,鈥� Green said. 鈥淭hat鈥檚 one thing I don鈥檛 play about.鈥�
Green didn鈥檛 take out a loan that day, but that doesn鈥檛 bother O鈥橬eal. It鈥檚 more about doing what鈥檚 right for the customer, she said.
鈥淭he education piece is the biggest thing for us,鈥� she said. 鈥淭he deposits, they come, the lending opportunities, they also present themselves.鈥�
鈥業鈥檓 the person that needs help鈥�
That was true of Cathy and Jerome Jenkins, who own and run Cathy鈥檚 Kitchen in Ferguson and had been searching for a way to alleviate the order volume, particularly from deliveries and takeout, that was overloading their restaurant on South Florissant Road.
鈥淲e knew we needed a to-go restaurant to solve that problem,鈥� Cathy Jenkins said.
They had been considering this kind of expansion since the beginning of 2023 before opening Cathy鈥檚 Kitchen To-Go in Dellwood, which is next to Midwest BankCentre鈥檚 new location.
It was serendipitous and made sense to reach out since they鈥檇 be in the same complex, Jerome Jenkins said.
鈥淭his was an opportunity because Midwest Bank[Centre] was looking for someone to help,鈥� he said. 鈥淣ow it鈥檚 just nice to be one of the first people to knock on the door, to go, 鈥楬ey, it鈥檚 me. I鈥檓 the person that needs help.鈥欌��
They spent months negotiating with the bank before agreeing to a $100,000 loan to help with the roughly $185,000 buildout cost, Jenkins said. He added they were committed to a second restaurant location regardless of where they鈥檇 find the financing.
鈥淭here鈥檚 a lot of ways that you can get capital, but this project was about the community,鈥� Jenkins said. 鈥淢idwest Bank[Centre] was trying to figure out what to do for the community.鈥�
Securing financing in this manner was new territory for both of the Jenkinses.
鈥淲e didn鈥檛 get a loan at all for the original Cathy鈥檚 Kitchen,鈥� Cathy Jenkins said. 鈥淲e used our own cash, and we built it dollar by dollar, and a lot of blessings and miracles along the way.鈥�
It鈥檚 an all-too-common experience for many Black-owned ventures, said Andre Perry, who directs the Center of Community Uplift at the Brookings Institution.
鈥淭here are many Black-owned businesses that had to self-finance,鈥� he said. 鈥淭hey use credit cards, [sell] their home, try to use equity in their home.鈥�
鈥業t has to be profitable鈥�
Banks can be the institutions that provide that capital and help sustain the communities they鈥檙e located in over years and decades, Perry said. They do this by holding deposits and using that capital to make loans or investments in the surrounding community, he said.
鈥淭hat鈥檚 the dilemma with Black communities,鈥� he said. 鈥淚f you don鈥檛 have as many high net-worth individuals in a location, you鈥檙e going to have less capital in that bank to ultimately use as investment capital.鈥�
This reality is articulated when examining deposit data from the Federal Deposit Insurance Corp. As of June, banks in the St. Louis region managed some $130 billion in deposits, but only about 3.5% of that dollar figure was in locations in north St. Louis or north St. Louis County.
For comparison, about 17% of the region's nearly 2.8 million population lives in north St. Louis and north St. Louis County.
The strained banking relationship goes both ways.
鈥淎 lot of times in the African American community, we don鈥檛 trust banks,鈥� Jerome Jenkins said. 鈥淢ost people never ask, they never get that far to even reach their hand out because they already perceive they鈥檙e not going to get money for financing anything.鈥�
Perry added that many bankers are more physically distant from individuals in the communities they serve because of bank consolidation over the past 20 to 30 years.
鈥淚f you鈥檙e only working with numbers, you may not get a sense of who that person is,鈥� he said. 鈥淚n addition, you may not pick up when someone has not received intergenerational wealth transfers because of past discrimination, so their application looks very different from someone who did.鈥�
Perry argues that the relationship between banks and the neighborhoods they reside in is reciprocal and that they will grow as the community does. But this takes time and patience that some banks don鈥檛 have, he added.
鈥淢any Black and brown communities just need more time in order for these services to get traction,鈥� Perry said. 鈥淚t doesn鈥檛 help at all if you say, 鈥極h, let鈥檚 pull out the bank because it鈥檚 not profitable today.鈥欌��
It鈥檚 a sentiment Kimbrough shares and one of the driving philosophies behind Midwest BankCentre鈥檚 decision to open in Dellwood, even down to how the bank built out the location. A new branch can cost between $2.5 million and $5 million depending on a few factors, but the bank managed to build the Dellwood location at 10% of that figure, he said.
鈥淟et鈥檚 see how we can shift the cost structure because we want to be sustainable for this community and this part of the region,鈥� Kimbrough said. 鈥淥ftentimes when [banks] think about low-to-moderate income communities, we put them in the charitable bucket. We show up and we do all things charity.鈥�
Philanthropic actions are important but not everything, he said. Kimbrough doesn鈥檛 mince words when he explains the decision to open a new branch in Dellwood is just good business.
鈥淚鈥檓 not on this because it鈥檚 a social crusade,鈥� he said. 鈥淭his is an investment. In fact, for any bank to be sustainable in any community, it has to be profitable. And you can鈥檛 be apologetic about that.鈥�
Kimbrough concedes the Dellwood location isn鈥檛 profitable yet, but he didn鈥檛 expect it would be for another few years. He said he鈥檚 convinced there is money to be made while helping community members reimagine how they can engage with financial institutions moving forward.
