In five years, Detroit’s Black-owned First Independence Bank doubled its book value, and the mission for its latest acquisition of a failed Chicago-based bank is growing the institution even more.
That’s in no small part due to the leadership of CEO and chairman Kenneth Kelly, according to colleagues and others in the industry. The electrical engineer-and-utility-sector-executive-turned-bank chief who joined First Independence in 2017 is not only leading the 56-year-old financial organization in defying a trend of industry consolidation but also serving as a voice for the $25 trillion banking sector across the United States as chair of the American Bankers Association.
“The banking sector is seeing a decline of banks at about 200 a year right now,” Kelly said. “We recognize the need for us to grow strategically. We had studied banks like ours across the country, and saw that a multi-state approach will allow us to grow at the speed that we thought we could handle and be appropriate.”
The cost of technological disruption, interest rates not lowering, the burdens of regulations and the value of scale have challenged the competitiveness of regional banks. It’s put pressure on institutions like First Independence, but it’s also created opportunity. And First Independence, as one of 150 minority-owned banks in the country, is uniquely positioned to serve many needs.
“What the studies have shown, whether you look at FDIC studies or the Federal Reserve studies,” Kelly said, “they demonstrate that the ability to relate to those constituencies matters in terms of the ability to receive lending and loans in those respective markets.”
Take First Independence’s expansion to the Twin Cities in 2022: Peer and mentor banks in Minneapolis approached Kelly following the murder of George Floyd because there wasn’t a minority-owned bank in the state of Minnesota. The goal for First Independence’s expansion and efforts for greater inclusion aligned in purpose. It also opened a branch in St. Paul in addition to its two locations in Detroit.
The bank then worked with a customer who only had what was in the trunk of his vehicle after the fires following Floyd’s death: “As he was trying to pursue loans to rebuild, he was turned down not once, not twice, but several times,” Kelly said.
To even qualify under regulatory constraints, First Independence took an unusual step to provide a loan. As a result, the customer opened a store at the Mall of America.
“It was because of the uniqueness of our institution and understanding his needs,” Kelly said, “but also partnering with some entities external to the banking sector, which allowed us to create the credibility that we could do that loan on his behalf.”
The latest expansion to Chicago marks First Independence’s entrance into the second-largest banking market in the country. Last year, it had roughly $600 million in deposits. In January, it acquired the $212 million in deposits and $251 million in assets of Metropolitan Capital Bank & Trust after the Federal Deposit Insurance Corp. took it into receivership. Kelly is optimistic about future success there as First Independence brings its emphasis on what he calls “the circle of life” that includes customer safety, service and relationships.
Linda Forte, First Independence’s vice chair, called Kelly a “brilliant” leader: “He is an outstanding problem solver. He’s got the analytical abilities that you would expect an engineer to have, and on top of that, extremely strong interpersonal skills, the whole notion of being able to connect, be curious and creative around what he can do as a leader of the bank.”
The expansion that his leadership has fostered benefits First Independence’s Michigan customers, too, Kelly said. A bigger bank provides economies of scale and greater stability and predictability.
As head of the American Bankers Association elected by industry peers, Kelly also has emphasized unification in the sector, cybersecurity protections and other key issues. Although the Trump administration has improved the regulatory environment, he said tariffs and conflicts in the Middle East also add to uncertainty.
“It’s an exciting opportunity to represent not only our institution,” Kelly said about the role, “but really the state of Michigan on the national stage.”
Kenneth Kelly
Age: 58
Occupation: Chairman and CEO, First Independence Corp. and First Independence Bank; chairman, American Bankers Association; board member, National Bank InterDeposit Co.
Family: Married, two adult children
Education: Auburn University, bachelor of electrical engineering; University of Alabama, executive master of business administration
Why honored: For being the chairman of Independence Bank and one of the city’s leading Black businessmen. He is involved in a number of civic and charitable projects and is currently chair of the American Bankers Association.
This article originally appeared on The Detroit News: Kenneth Kelly leads First Independence growth, banking sector advocacy
Reporting by Breana Noble, The Detroit News / The Detroit News
USA TODAY Network via Reuters Connect
By Breana Noble, The Detroit News | USA TODAY Network
