The Office of the Comptroller of the Currency designated Warsaw Federal Savings & Loan, serving the residents of East Price Hill for 130 years, as a minority depository institution, the company announced last week.
The Cincinnati-based independent mutual bank received the status roughly five months after it revamped its board so Black directors would constitute the majority.
Warsaw Federal will be included on the list of OCC-supervised MDIs after it is updated with fourth-quarter information, a spokesperson for the bank told American Banker. The $96.6 million-asset lender joins Adelphi Bank, a Black-owned $34.8 million-asset bank that became the first MDI in Ohio in May. There were 148 MDIs in the U.S. as of Sept. 30, according to data from the Federal Deposit Insurance Corp.
"MDIs not only provide customers expanded access to the unique financial resources they need but also the chance to invest in our community's success and wellbeing," Warsaw Federal CEO Robie K. Suggs said in a statement. "MDIs are an impactful tool in breaking the generational poverty cycle and offering opportunity for economic equality for all those in the communities we serve."
Suggs joined Warsaw Federal in April during a reorganization process that led to a board including seven Black directors and one Hispanic director among its 10 members.
Warsaw Federal started toward MDI status four years back when the board, under former chairman Rick Flynn, looked for ways to better serve underbanked residents. They met with local community leaders to determine how to bridge the gap and concluded that a mutual bank as an MDI would best serve the purpose, American Banker reported.
“The previous Warsaw Board, including former Board Chair Richard Flynn, envisioned how the work of Warsaw Federal could be even more impactful to the community as an MDI. We appreciate those efforts, including identifying a strong new majority-minority Board to support our MDI status,” David Evans, chair of Warsaw Federal’s board, said in a statement.
Tom Fraser, CEO of First Mutual Holding Company, told American Banker it is natural for mutual banks to transition to an MDI. “A mutual bank should be reflective of its local neighborhood,” he said.
First Mutual, based in Lakewood, Ohio, is the corporate parent of Warsaw Federal.
Suggs plans to overhaul the product segment and seek more capital.
"This time next year, we'll look a lot different," Suggs told American Banker.