Independent Banker - April 2024 - 69

ast November, $90 million-asset
Warsaw Federal Bank in Cincinnati
became a minority depository
institution (MDI), the city's first and
only the second in the state. It was an
unusual designation-not only due to
its rarity.
MDI status is given by the Federal
Deposit Insurance Corporation (FDIC)
or the Office of the Comptroller of the
Currency (OCC) to community-based
banks that are governed by
majority-minority boards or that are
more than 51% owned by minorities.
However, it's most often given to de
novo banks, not community banks
that have been in existence for more
than 130 years, like Warsaw has.
The unconventional route
Established by three local
businessmen in 1893, Warsaw
Federal is a mutual bank, owned by its
depositors and deeply invested in its
community through its two branches
serving the Price Hill and Sayler Park
neighborhoods of Cincinnati. Over the
years, its demographics have shifted
from predominantly white to more
Latino and African American.
Just over two years ago, an advisory
L
committee for the community bank
was considering creating a brand-new
MDI but recognized that starting from
scratch is a protracted process. That's
why they instead made the unusual
decision of applying for MDI status
for the existing bank.
The process of becoming an MDI
has still been lengthy, says Robie K.
Suggs, who has served as Warsaw
Federal's president and CEO since
April 2023. Suggs-a former chief
lending officer of the Cincinnati
Development Fund-says the first
steps to MDI status included getting
approval from the OCC, obtaining
the support of the community bank's
holding company, First Mutual in
Lakewood, Ohio, and interviewing
new board members to make sure
they had the right skill sets. This
coincided with a complete systems
overhaul, upgrading every piece of the
puzzle. And the process is ongoing.
" It's been very exciting, " laughs
Suggs. " I like to share with my
colleagues that it's like your hair's
on fire, and you're drinking from
two fire hoses and neither one of
the fire hoses is putting out the fire!
So, it was a lot to learn in a very
abbreviated timeframe. "
An emphasis on
financial education
Name:
Warsaw Federal Bank
Assets:
$90 million
Location:
Cincinnati, Ohio
Having the new designation allows
Warsaw Federal to be more flexible
in what it offers to the individuals
and small businesses located in and
around Price Hill, including the
unbanked and underbanked.
" We know that the residents are
mostly underserved or at a low- to
moderate-income level. And that
demographic usually has a harder
time [obtaining affordable] financial
services, " explains Suggs. " These
individuals who haven't gone
mainstream with their credit choices
sometimes find it hard to deal with
independentbanker.org // 69
" These [underserved
or low- to
moderate-income]
individuals who haven't
gone mainstream with
their credit choices
sometimes find it hard
to deal with traditional
banks, because
they don't have any
history or established
credit score. "
-ROBIE K. SUGGS,
WARSAW FEDERAL BANK
http://www.independentbanker.org
Independent Banker - April 2024

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