Fifth Third's $85M Award to Spark Economic Revival in Distressed Areas

CINCINNATI, OH – January 16, 2026 – Fifth Third Bank is set to inject significant capital into economically distressed communities after securing an $85 million New Markets Tax Credits (NMTC) award from the U.S. Department of the Treasury. The allocation, granted to the bank's affiliate, Fifth Third New Markets Development Company II, marks the institution's second major award in just 15 months, following a $50 million allocation in September 2024. This brings the bank's recent NMTC awards to a total of $135 million, positioning it as a key player in a highly competitive federal program designed to revitalize underserved neighborhoods.

The NMTC program serves as a critical financial tool aimed at stimulating private investment where it is needed most. For communities struggling with disinvestment, the infusion of capital promises to support housing development, commercial growth, and the creation of essential local jobs.

“Access to capital remains the most critical need in our communities,” said Kala Gibson, chief corporate responsibility officer at Fifth Third, in a statement. “This award will enable us to accelerate our efforts and deepen our impact in the communities we serve.”

The Mechanics of Revival: How NMTCs Work

Established in 2000, the New Markets Tax Credit program is a federal initiative managed by the Treasury's Community Development Financial Institutions (CDFI) Fund. Its core purpose is to incentivize private sector investors to channel funds into low-income urban and rural areas that have historically been overlooked by conventional capital markets.

The mechanism is straightforward but powerful. Investors receive a federal tax credit totaling 39% of their investment, which is claimed over a seven-year period. In exchange, they provide capital to certified Community Development Entities (CDEs), such as Fifth Third's development company. These CDEs then use the funds to make loans or equity investments in qualified projects, ranging from manufacturing plants and healthcare clinics to retail centers and community facilities.

This structure creates a powerful multiplier effect. According to the U.S. Treasury, the NMTC program has consistently demonstrated its ability to leverage private dollars, generating approximately $8 of private investment for every $1 of federal tax credit issued. For many projects, the credit provides the crucial “gap financing”—often covering around 20% of total project costs—that makes an otherwise unfeasible development viable.

To qualify, projects must be located in census tracts with poverty rates above 20% or median family incomes below 80% of the area median. The program has supported over 7,100 projects nationwide, leading to the creation or retention of more than 888,000 jobs and the development of over 268 million square feet of commercial real estate since its inception.

Beyond the Balance Sheet: A Strategy of Community Investment

For Fifth Third, the recurring NMTC awards are not isolated wins but integral components of a broader corporate mission. The bank frames these investments within its “Neighborhood Program,” a place-based strategy designed to foster transformative change in historically disinvested areas across its footprint.

This approach moves beyond simple transactions, focusing on creating a “collective ecosystem” in partnership with community stakeholders to address systemic challenges. The goal is to spur economic mobility and create a positive ripple effect that leads to small business growth, affordable housing, and safer, healthier neighborhoods. This commitment to community impact has contributed to the bank's repeated inclusion on Ethisphere’s list of the World's Most Ethical Companies®.

The program's success hinges on its ability to deploy capital where it can have a lasting effect. “New Markets Tax Credits are one of the most impactful tools in our community development toolbox,” noted Susan Thomas, president of the Fifth Third Community Development Corporation. “They provide crucial capital for economic development in underserved communities, funding healthcare clinics, community facilities and the growth of local businesses.”

From Tax Credits to Tangible Assets

The ultimate measure of the NMTC program's success lies in the tangible projects it helps bring to life. Fifth Third has previously used these credits to support vital community assets, including the Phillis Wheatley Westside YWCA in Atlanta and the Talbert House Hamilton County Crisis Center in Cincinnati. These projects provide essential services, from crisis intervention to community programming, that directly address the needs of local residents.

The impact extends across a wide range of sectors. Nationally, NMTC-funded projects have been instrumental in building and expanding healthcare facilities, charter schools, manufacturing businesses, and grocery stores in food deserts. By providing flexible, often low-interest financing, CDEs enable non-profits and local businesses to undertake ambitious projects that strengthen the social and economic fabric of their communities.

The $85 million allocation will allow Fifth Third to continue this work, identifying and supporting new projects that promise to create jobs and deliver critical services. While the specific projects for this latest round have not yet been announced, they will be selected based on their potential to generate significant community benefits in alignment with the bank’s place-based strategy.

A Powerful Tool with Complexities

Despite its documented successes, the NMTC program is not without its critics and complexities. The financial structures can be intricate, leading to high transaction costs that some argue dilute the subsidy intended for the community. Government Accountability Office (GAO) reports have also pointed to instances of “twinning,” where NMTC projects receive multiple layers of public funding, raising questions about efficiency and transparency.

Furthermore, the competition for NMTC allocations is fierce. In a recent funding round, the CDFI Fund received nearly $15 billion in requests from 196 applicants but could only award $5 billion to 104 CDEs. An institution’s ability to consistently secure multi-million dollar awards, as Fifth Third has done, signals a sophisticated strategy and a strong track record of successful project implementation.

In response to ongoing evaluation and scrutiny, the Treasury Department has signaled its intent to continue refining the program. Future priorities include strengthening compliance, enhancing monitoring, and ensuring the credits are sharply focused on their core mission of supporting affordable housing, small business growth, domestic manufacturing, and essential community health infrastructure. This ongoing process of refinement aims to ensure this powerful federal tool remains effective and accountable as it channels billions of dollars into America’s most vulnerable communities.