Redemption Holding Co. has completed its acquisition of Utah-based Holladay Bank & Trust, making it the first time a bank has been owned by a Black-led investment group in the Western U.S.

The newly formed Redemption Bank will be the first Black-owned bank in U.S. history not physically located within an economically vulnerable community, the first in the Rockies, and the only one located in the Black-banking desert that stretches from Houston to Los Angeles.

The bank, with roughly $65 million in assets, will focus primarily on doing commercial lending and creating a dedicated team for small business loans.

Ashley Bell, CEO and chairman of Redemption Holding, told The Associated Press the company will launch a fully digital platform at the end of summer, enabling it to service small businesses across the country. The company will remain headquartered in Salt Lake City, a city with a Black population of under 3%.

"We found an exceptional business environment in Utah, specifically in Holladay, along with a bank that has a clean balance sheet and a state with the highest average return on assets for banks in the country. We are committed to competing in Utah to earn the business of customers from all backgrounds," Bell said.

The original purchase of Holladay Bank was announced in 2023, but Bell said the transaction got delayed due to the collapse of Silicon Valley Bank that year.

"This process has undoubtedly taken longer than any of us anticipated," Bell said. "However, we are grateful for the diligence of the staff at the FDIC, the leadership of the (American Bankers Association), and the renewed sense of urgency from the new administration this year, all of which helped bring everything together."

Bernice A. King, the youngest child of the Rev. Martin Luther King Jr., is expected to serve as Redemption Bank's senior vice president for corporate strategy and serve on the company's advisory board.

The company will be the 24th Black-owned bank in the nation, which are known as Minority Depository Institutions (MDI). The last created MDI, a federal designation for banks and unions that are owned or directed by minority groups, was Adelphi Bank in 2023.

MDIs began in the 19th century when Black Americans, who could not get loans from mainstream banks, organized their banks and associations. They also provided financial services and economic opportunities in low-income neighborhoods.

The Civil Rights Movement spurred the creation of more MDIs as Black people experienced a financial boom and began to build stronger communities. In the late 1980s, Congress officially created MDIs through the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA).

Redemption Holding purchased Holladay with a group of investors that included Ally Financial Inc. and Central Bancorporation.