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- Spring of the Carolinas represents renewal, optimism and a new start, and it's just plain fun to be in the Carolinas during the spring and summer.

I am Chris William and welcome again to the most widely watched and longest running program on Carolina Business Policy and Public Affairs.

This program is no different.

We will unpack these issues facing us here in this spring and also late around the CEO of one of the nation's oldest black led banks.

It is M&F bank in Durham, James Sills will join us and we hope you stay with us beginning right now - [Announcer] Gratefully acknowledging support by Martin Marietta a leading provider of natural resource based building materials providing the foundation upon which our communities improve and grow.

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On this edition of Carolina business review, Holly Childs, President and CEO of Wilmington Downtown Inc Mark Ferris, President and CEO of the Greenville Area Development Corporation and special guest James Sills President and CEO of M&F Bank.

- Welcome again to our program and we're glad to have Mark Ferris back from Upstate South Carolina.

We also welcome Holly Childs from Wilmington in the Port City in North Carolina, Holly welcome to the program.

I don't wanna be too personal Holly, but you've got a fresh set of eyes.

You literally just arrived in the Carolinas what's it like compared to what you were in please don't play to your audience.

- Yeah, I do have a very fresh set of eyes.

I actually moved in on new year's Eve.

So I tell the mayor that I was the one that put us over the top for being the number one inbound destination in the country.

But it was my final number that rounded that out.

But yeah, it's great.

I think Wilmington it's the right time there's a lot of things coming together.

We have a lot of just really good dynamics around development right now and so there's one of opportunity.

I'm excited about what I see and I've been not to Wilmington other than vacation but I've been in North Carolina a couple of times and I passed, I went to wake forest.

So I spent a little time in North Carolina.

- Yeah you know a little bit about it, Mark you get the first pitch let's talk about COVID.

I mean, how can we not this thing has been living with us now for months and just the feeling and the oppressiveness of the public health crisis.

But you get a sense now, Mark people have been anxious, businesses wanna open the vaccine is being widely deployed now the spring and summer months are coming upon us, is, would you expect and I hesitate to use this term that we would be back to normal within 60 or 90 days or some semblance of it.

- Yeah I would say no, certainly I think there gonna be a stamp to get back to a new normal.

I certainly don't think it's gonna be the way it was.

I guess I've seen some events being scheduled for some or maybe like bummer more and more likely fall.

A lot of the events, at least in the spring thing that's been pushed back to the fall at least some that I've seen.

So I think there'll be a slower return to confidence especially things like tourism travel but that may take as much another six months to a year to rebound.

But I think overall that there's those slopes that are competency and discarding like we're all frustrated.

We were anxious to get back and then first meetings and I'm certainly I am, but there's some trust that's gotta be restored.

- Holly is there some sense or evidence of this activity building to noticeable degree for you?

- I think if you would have seen us on a St Patrick's day you'd have thought that a, there wasn't a pandemic at all unfortunately, people were so excited.

I think it's the pent up demand of people wanting to get out and we've seen our tourism numbers of course major decline, not it's been interesting because our numbers are up so much at the beaches that's carried the downtown and convention center district.

So people have been, hotels and the tourism and the beaches has been through the roof as people kinda want to go places where they can space out and get outside with nature.

So I think it's gonna be different kind of a new normal right, where people are looking for opportunities to get together, but in more mindful ways.

- Is it concerning when you see those crowds at the beaches and even along the boardwalks along the beaches around safe distance singers that not as big of an issue and it's more about a personal experience now?

- No, I think it is a concern.

I mean, I think certainly whenever I go over there it concerns me that people aren't taking it as seriously particularly people that may live in those areas and they're kinda used to that and they're used to the crowds and they're pretending, you go over there and you see you're one of a hundred people that are around that has a mask on.

It's concerning yes I think that if people would just hold on a little longer, just another like you said, 60 or 90 days, then people will have vaccines and be safer.

But until that point to see that kind of activity that is scary.

- You know Mark and Holly, like you both to weigh in on this the things that portend a real growth and real development are things like commercial activity.

And I'm talking about commercial development activity, when I think of Greenville in the Upstate of South Carolina, of course, Greenville Spartanburg has been a go-go growth area for a while now, but specific to Greenville Unity Park has been on the dockets to expand toward the West side and take what has been not a desirable area and really make it part of it.

But I'm using Unity Park as a proxy for development.

Where we see more of those larger scale development projects now come back and be re-energized?

- Yeah I think so certainly the kind of data has shown us all that we appreciate outdoor spaces.

So Unity Park and Greenville certainly the beaches in Wilmington are important people more important maybe than they realize.

So they'll cross, at least there'll be a focus on land use both in the city and the County of Greenville we'll have new land use plans.

We're trying to meet the growth demands appropriately by providing some of those open spaces the swamp rabbit trail extension is exciting for us and Chris companies want that the companies that we recruit the corporate headquarters, that the office especially those kinds of operations they love that being available to get outside and to access open space area.

So I've see more of that kind of development certainly the commercial is gonna continue.

We've got, I think another 2,500 multi-family units planned and under construction right now in Greenville that's gonna continue.

But yeah I think that was gonna be a greater emphasis on creating a sense of place that every community wants.

- How are you gonna have enough development in Wilmington and the Port City to be able to fill that space?

- It's, amazing to me the size of Wilmington I've been in bigger cities, like you said I've kinda done a bit of a world tour before getting here but I was in Pittsburgh and Cincinnati previously.

And those cities are two to three times the size of Wilmington, but the amount of development that's going on here, particularly around the riverfront and the downtown, it's unbelievable.

I mean just as Mark said we're getting hundreds and then just unit after unit, project, after project of new apartments new condos, new residential, and it's because of the energy of downtown.

I mean, I think a lot of people want that they want the energy of a city, but they love a smaller city now because the bigger cities have become a more dangerous place with COVID.

So I think it's really played to Wilmington strengths in that way and we've seen a lot of investment too in downtown as far as outdoor and open spaces.

So I like talking about the trails.

I think that's vital to economic development attraction.

We've seen the city invest in the parks they're getting ready to do some major prays for River walk which is suspended second number two River walk in the country.

I don't know how we got beat by Detroit but I'm trying to get over that.

But there's a lot of investment going into outdoor spaces and in places for people there are lifestyle amenities because we know just this market and all economic development folks know that people can work from anywhere now, we've seen that throughout this pandemic.

So we wanna make a special place for them.

- The term, if you build it, they will come seems to have applied to the Carolina's Mark.

Google announced a couple of big things in the last couple of weeks, I have a billion dollar investment or rather, I should say reinvestment in the Berkeley County, Google site down in the low country, across the state from you.

And also they announced a thousand of potentially a thousand person engineering hub in Durham, which of course is a hot city and Metro as well.

So is this again, is this a proxy for more things to come or is the Google announcements one-off?

- No, I think there's a, of course the idea that we would have more emphasis on data centers cyber security, that's gonna config no doubt about it.

And certainly we're gonna see more of that development.

There's a theory of economic development called agglomeration which says once you have one type of industry, you're likely to get another similar type industry and build on that.

So I think those commuters you'll see that.

Certainly I think we'll all experience it.

Even in Greenville, we just out our first new tier three data center, couple of months ago, a company called these people out.

And I think that's certainly going to be a trend that it's allover.

- Just quickly Mark quick follow-up you think South Carolina developers in commerce have learned a tough lesson around not that they didn't think about this before, but automotive and aerospace, clearly two industries that took it on the chin over the last 24 months or so is South Carolina expanding the portfolio of industry--- - And I think we're points groups that build off of that.

So in Greenville, we have the CU-ICAR for Automotive Research.

We need to figure out what the next steps in mobility are gonna be, and we have that to help us right?

So that's gonna continue, I think the evolution of on build and continue towards that mobility factor and we're gonna be benefiting from that.

And certainly commercial has gone backwards but defense is not at all.

We've got S16 now being assembled in Greenville and then in order spread and I've been really hot (mumbles) in the aviation industry at least I've been doing pretty well.

- M&F Bank in Durham is not just the second oldest bank, black led bank in this country, but it is well over a hundred years old now and is meaningful in many ways and not just for a diverse population.

Joining us now is the president chief executive officer of M&F bank and M&F bank Corp we welcome James Sills, President Sills welcome to the dialogue.

- Thank you Chris it's great to be here with you today.

- So let's start with banking in general 2020 had to be tough on a lot of banks, not just because of low interest rates, but everything else that happened in society and the culture.

How would you describe 2020 and M&F bank performance last year?

- With the pandemic and all the social unrest believe it or not, we actually had a very good year.

Our total assets were up 16% or $44 million.

Our total loans increased 3% and overall our delinquency was below our peer groups and significantly below 1% for the year.

So even though it was a challenging year we actually had a very good year in a challenging environment.

- How do you leverage that for this year and beyond.

- You're riding a wave of momentum we actually did open up almost a 2,700 accounts in 2020 and I'm really excited about a 2021, especially with the recent capital investments from the four largest banks.

So that'll allow us to grow to approximately 430 million - Wanna open this up now for questions, Childs question.

- Yeah so Jim, it's great to meet you first of all, I'm glad you could join us here and I think I really admire your bank.

I mean I certainly did a little bit of research when finding out about you coming onto the show and that you've had 25 years as an outstanding community reinvestment act rating.

So, I mean, could you talk a little bit about how you've managed to hold on to that?

What some of the initiatives have been that have been important in doing that?

Because we're really anxious here to reach out to the community and do more community development type projects and I'd love to hear your thoughts about how to do that.

- Thank you Holly for that question, as you stated we've had an outstanding CRA rating for over 25 plus years.

We're actively engaged in the community.

We lend to low and moderate income areas all throughout the state of North Carolina so that helps achieve that type of rating.

We also provide access to capital to all different kinds of businesses, specifically small and medium-sized businesses, nonprofits and churches.

And we perform a lot of financial literacy and outreach in the communities that we serve.

So that's how we're able to maintain that rating for the over 25 plus years.

- Mark Jim, you've got to have a great background (mumbles) have fantastic digital platform but yet you find the lack(mumbles) of your service territory of broadband obstacles to create my customer service model.

- It's, a challenge 'cause, everybody doesn't have a smart phone.

Everyone does not have access to the internet, but we still have our branch locations, but you would be amazed that our customer base is adopting the mobile technologies and online banking and utilizing our ATM's.

And so given the pandemic, it really forced a lot of consumers to just think differently in terms of what are other alternative channels delivery channels that they can utilize to obtain their banking information.

- Jimmy you almost, it's not very technical but M&F success around community reinvestment.

M&F success about penetration into not just lower income but diverse neighborhoods almost makes it seem like it's easy to do.

Many of the larger banks won't touch some of the lending orders or even some of the traditional banking, because they're worried about margins or they're worried about risk or they're worried about loan payback.

How do you navigate yourself through that to be a good banker and a good steward of not just the community but also of the stakeholder and the shareholder in the bank?

- Chris it's, it's a challenge every day.

We really focus on providing a lot of handholding to our customers and we think that's the difference.

People in general are intimidated by financial institutions.

And so I think it's incumbent on us to provide, financial literacy information, a lot of handholding.

And if there's if we're unable to, make the loan so to speak we need to tell that person why we're unable to do it at this time and what they may need to do to maybe improve their credit or their financial situation.

So when they come back to us or another financial institution there'll be more successful the next time.

- Holly, go ahead.

- Follow up to the last question, Jim, I wanted to kinda dig a little deeper too, into your particular there are mechanisms or methods you could share with us on rollout to communities, particularly communities of color minority and women owned businesses.

We're really hyper-focused to now on trying to make sure we've got a micro-loan program we're getting ready to roll out to WDI.

Previously we've had large capital improvement line programs that have benefited developers but we really haven't been as focused on small businesses.

And for us it's important now post COVID to really realign that money.

So we're taking the set aside that we had for our larger program and turning it into, we just got approval by council on March 2nd, to turn it into a loan program, to help bolster small businesses.

And we want to really reach out to minority communities to women in businesses.

And is there a specific way that you have found to be successful in reaching those target populations and trying to make sure that everyone's actively engaged - Holly we are a CDFI which is a community development, financial institution.

And so institutions like ours we partner with nonprofit partners because a lot of times they're very connected to the target customer that you're looking to try to help.

And I just think that's critical if you're trying to work with people in the community that may not be the ones that you see every day that you partner with some strategic partners with nonprofits in your specific community.

- I know that that certainly a lot of communities that you serve are doing some innovative things when it comes to encouraging minority business development.

What are some of the more notable ones that you have seen and work with?

- Mark I think the biggest thing is really the providing the financial literacy.

And also if there are specific programs that are out in the marketplace, like the paycheck protection program and really setting up a Zoom calls or Webinars to really help people understand the rules of the game, so to speak and to get that capital to them.

So that's worked very effectively for us.

Again, we do a lot of outreach.

We do a lot of seminars for community groups, and we also before the pandemic, we used to do a lot of tours.

And so we would invite people in to the bank just to say, hey this is what we offer, these are our products and services and this is how a bank can actually assist you and reaching your financial goals.

- Jim, former life of yours.

And I hesitating to call it a former life because you have a deep bench of knowledge around information and information technology.

You are the CIO for the state of Delaware.

So you straddle this idea of being a traditional banker if you don't mind me explaining it this way traditional banker, but also someone that understands the FinTech side of that relationship.

And FinTech has come under fire because traditional banks say they don't the FinTech companies don't have nearly the oversight and the regulation that the the banks do, the traditional banks do.

So it's not a fair playing field, but so comment on that and comment on how you find this balance between being of in the FinTech space possibly and also not losing what a traditional bank does bring to a dinner table.

- Well based on my background I actually have to play in both spaces and as a traditional bank, I wanna make sure that our customers have access to, various apps that will allow them to access our products and services, but also improve the customer experience.

And as you pointed out, a lot of the FinTech have that secret source of making that connection with the customers a little bit more efficiently than some of the traditional banks.

And so I just think it's important that all bankers embrace technology because as you're all aware we're eventually gonna do everything on our smartphones.

And so I think banks needs to embrace FinTech and identify the right types of FinTech partners that make sense for their bank and their customer base.

- Jim, do you think FinTech can be I don't wanna use the term saving grace but can it help, traditional banks say that we've got so much oversight government regulation is exhaustive and FinTech is out here running circles around us.

So could there be some way that traditional banks lose some of that oversight and FinTech picks up some of that regulation?

What does that look like in the future?

- I think in the future, you will see more mergers of FinTech with traditional banks.

For example, SoFi just purchased a bank out in California a couple of weeks ago.

So I think you'll see more of that particular model on a go-forward basis.

I do think the regulators will be providing a little bit more oversight on some of the FinTech companies.

A lot of them are trying to obtain what they call FinTech charters, so that will subject them to some additional regulation in the future.

- [Chris] Okay Mark.

- Yeah what does the next generation patten look like in M&F banking what are you all doing to attract them?

- Yeah I love that question, Mark, we're a community bank and we do have a number of seniors that make up our customer base.

And so for example, we started a millennial advisory board.

And so this is a group of individuals all throughout the state that advise us on marketing social media, FinTech and just what we need to do to attract that type of demographic to our institution.

So that's been a best practice.

We actually met with our millennial advisory board last night and they just provide so many great insights on what our bank should be doing to attract younger people to our institution.

- [Mark] That's a great idea.

- [Chris] Holly, we have about two minutes left.

- I think that's a great idea.

We actually just hired a couple of UNCW interns for our office and the energy and the ideas around marketing and Instagram and things that I certainly never would have thought to do to market Wilmington downtown has been at, just incredible.

I'm wanna ask you just about, speaking of of government to both good and bad government interference or participation in our lives.

Could you speak a little bit about the PPP program and kind of how you've reached out marketed that to small and medium businesses and the results that you've seen of that program and maybe anything that you think we should be doing differently with the PPP program or more of.

- Yeah, the PPP program I actually thought was a great program specifically for our bank.

It provided access to capital to small and medium sized businesses, nonprofits, and churches.

And that really was our customer base.

Although we're located in the five largest markets of North Carolina we made loans in 16 different cities in North Carolina.

And also there is a minority owned bank in South Carolina and they did the same thing Optus Bank, but it was a combination of answering the phone co hosting a Zoom calls to let people know about all the different forms and the documents that are necessary to actually apply for the loan.

And we're doing the loan again we're doing the program again for round two, but last year because of our efforts we were able to save about 1400 jobs in North Carolina.

So it was a program that I think was pretty good for North Carolinians--- - Sorry to interrupt you, Jim, thank you for joining us we're out of time that always happens.

We get momentum going and we stopped, but we're thrilled you came out of the program congratulations, not just the big investments from the large banks, but you got your wind at your back and we hope that continues for you and also the communities you're in but I hope you'll come back so we can keep dialogue going.

- Thank you very much for having me today.

- Thank you.

Holly welcome could they have you in North Carolina hope you do well.

Mark always nice to have your best of luck in the Upstate of South Carolina and good to see you all.

If you have any questions or comments or you'd like to watch any of our hundreds of shows go to carolinabusinessreview.org and make a comment.

Thank you and until next week, good night - [Announcer] Major funding for Carolina business review provided by High Point University Martin Marietta, Colonial Life, The Duke Endowment, SONOCO, BlueCross BlueShield of South Carolina and by viewers like you, thank you.