In 1921, Optus Bank was established as South Carolina's first ever Black-owned bank. Over a century later, they’re getting a major boost from State Street.
By Bianca Gonzalez
In 2012, entrepreneur Sandra Sims and her husband founded Carolina Concession in 2012 in Columbia, South Carolina. In the 12 years since, it’s emerged as a prominent food service business in the Columbia Metropolitan Airport and the Jackson-Medgar Wiley Evers International Airport in Jackson, Mississippi.
But in 2020, once the pandemic hit, the pair struggled to get the federal Paycheck Protection Program loan process started through their previous bank, a traditional financial institution operating nationally. And as it turned out, other businesses using the same bank were struggling with the same problem.
“We're talking multi-million dollar businesses,” says Sims. “All [roughly six] of us together were probably worth about $30 million. We strongly believe it's because we're all African Americans. We strongly believe that's the reason why they were not reaching out to help us in the manner they were helping our counterparts.”
Then Optus Bank, founded in 1921 as South Carolina's first ever Black-owned bank, reached out to Sims personally to ensure she received her PPP loan. She in turn made sure to share their name with other community members whose needs were being overlooked. "They were all sitting there waiting for that same money."
Now, Optus is among the first community development financial institutions to receive a deposit from State Street, a major financial services provider for investors. It’s part of a $100 million program to support CDFIs in addressing inequality at a community level, meant to support banks like Optus as they serve low- and moderate-income areas through lending and affordable housing.
Among banks with the federal minority depository institution and CDFI distinction, Optus Bank and M&F Bank demonstrated particularly strong impact. “They're both quite mature in this space, and they have made a meaningful impact,” says Yvette Hollingsworth Clark, State Street’s executive vice president and chief compliance officer, who leads the program. It's a part of State Street's 10 Actions to Address Racism and Inequality, an action plan to undo the harms of systemic racism in communities.
The investment won't reverse the hundreds of years of disparities that led us here, but it's a step in the right direction. “It took 400 years and trillions of dollars of exploitation to create the gap that we have today," says Dominik Mjartan, CEO of Optus Bank. “However, it will impact the lives of hundreds, if not thousands, of people.”
Sims and her husband began Carolina Concessions with a $300,000 business loan and personal savings. They, like many other minority business owners, continued to grow their business despite struggling to secure capital.
Once they began their relationship with Optus, they were able to get the support they needed to include several new concepts, adding a Dunkin Donuts, Jimmy John's and Samuel Adams Columbia Brewhouse to the Columbia Metropolitan Airport, among other expansions.
"State Street is supporting us because of our mission, but they also see that we're a very profitable, strong institution that can deploy their capital efficiently," says Mjartan.
Optus Bank focuses on entrepreneurship to increase net worth within Black communities. This happens in part by providing the educational support and social capital to build awareness around tools to establish new assets and protect those that exist.
Optus’ leaders believe the key drivers of social mobility are not income, higher education or even the zip code of residency. Instead, they say, it's family’s net worth.
“The communities we serve have been capital-starved for a long time,” Mjartan says. “So in order to really amplify our chances of success, we have to bring outside capital in and almost repatriate the capital, if you will.”
In 2023, 83% of loans by number went to underserved areas by CDFI standards, and 96% by number went to small businesses with loan amounts to less than $1 million, according to Optus' most recent impact report. About 37% percent of loans were micro-loans for less than $50,000.
“Mission and margin really have to go hand in hand,” Mjartan says. “They have to be equal and that there has to be a tension between the two.”
This story is part of our series, CDFI Futures, which explores the community development finance industry through the lenses of equity, public policy and inclusive community development. The series is developed in partnership with Next City