A CDFI providing housing loans to low- and moderate-income households in northern Mississippi
![Thomas R Machnitzki (thomas@machnitzki.com) [CC BY 3.0 (https://creativecommons.org/licenses/by/3.0)]](http://commons.wikimedia.org/wiki/File:Senatobia_MS_001.jpg)
When you look at a list of banking institutions which have earned the CDFI designation, you’ll notice that there’s an abundance of them in the states like Mississippi, Alabama, and Louisiana. Any state with a high poverty rate is probably going to have more CDFIs, partially because more have formed in these areas to fill the needs of the community, but mostly because it’s easier to meet the requirements of a CDFI when the majority of the people you serve are low- and moderate-income.
This isn’t to say banks working in these states who happen to be CDFIs (or other low-income designations) don’t deserve just as much credit for having earned those designations. In fact, working in areas where there’s more widespread poverty, especially rural poverty which is common in the south, can present particular challenges that result in many financial institutions avoiding these neighborhoods altogether. However, it does explain why there’s such a concentration of community banking institutions in the states mentioned previously, and it reiterates the importance of investing in small financial institutions serving rural towns with high poverty rates in the south.
Sycamore Bank is one of the community-oriented banks prioritizing housing loans for low- and moderate-income households in northern Mississippi. They serve a variety of communities around Memphis, having two locations in the suburbs of Memphis, two locations each in two small towns, Senatobia and Coldwater, and one location in Oxford, MS, the home of University of Mississippi. However, their history is mostly that of a small-town bank, as they’re still headquartered in Senatobia and were founded in 1900 as a community bank specifically fulfilling the needs of Tate County.
They’re still a fairly small institution even with seven different locations, with just under a quarter billion in assets. When you take a look at their lending portfolio, it’s clear why they’ve been given the CDFI designation. The primary chunk of their lending is devoted to housing, with 31% of their loans going to housing and 58% of that being allotted to low- and moderate-income families. While housing is obviously their #1 lending priority, they also do significant small business lending (14% of loans) and small farm lending (3% of loans). While they could be more loaned out, with 80% of their deposits being used for lending, they have a positive return on assets and earned an Outstanding CRA rating in their 2018 examination from the FDIC, essentially meaning they have an excellent record of meeting their communities’ credit needs.
This Better Banking Option is a great one for anyone looking to invest in smaller communities in and around the Mississippi side of Memphis. They offer both online and mobile banking options, so it’s possible for anyone to get involved by opening a checking account through their website.