A big bank and CDFI investing in underbanked rural towns across the Mid-South
We’ve talked a lot on this site about how rural towns and populations are typically neglected by larger banking institutions, which contributes to the general migration to larger cities and the death of many American small towns. Without capital in those neighborhoods, people are unable to start businesses and buy homes that allow them to stay rooted in a community. The saving grace of many of these small towns are loyal and long-standing community banks which have a local focus.
However, because it is harder and harder for these small banking institutions to remain standing, as banking technology becomes more complicated and expensive and trending demographics show a shift to urban centers, many rural communities are left without any brick and mortar banking options. This is problematic in areas so rural it is difficult to get an internet connection, or in towns with many over the age of 65, who may never have been exposed to online banking options. So without local community banks, or even Mega-bank branches in their area, those in small, rural towns suffer from lack of access to banking products and capital in general.
For these reasons and more, the kind of work that Southern Bancorp does is extremely important to the health of rural America, as they specifically target rural towns which have been deserted by traditional banks, or where small community banks haven’t been able to survive. As Southern Bancorp points out on their website, in situations where there are literally no banks in an area, predatory lenders and check cashers may even move in to take advantage of people desperate for banking services. In order to help areas like these primarily in the Mid-South, Southern Bancorp has systematically located the majority of its 44 branches in low- and moderate-income rural towns in Arkansas and Mississippi which are underbanked or unbanked.
Southern Bancorp is one of the largest CDFIs in the country, with $1.39 billion in assets, but they take a very personal approach with their customers, siting relationship, empowerment and sustainability as the core values of their mission. They work individually with each of their customers to do three things: “supporting homeownership and housing by assisting individuals with capital and capacity, supporting jobs by facilitating entrepreneurship with capital and capacity, and supporting savings and asset accumulation by helping individuals to earn, keep and grow their assets.” This is pretty typical for a bank, but the difference is that Southern Bancorp specifically invests in people and communities which other institutions see as not worth investing in.
Their solid lending portfolio backs up the sentiments on their website, as 46% of their housing focus (which makes up almost 30% of their lending) is going to low- and moderate-income households. They also do a significant amount of small business lending with it making up 16.5% of their loan portfolio, and a considerable amount of small farm lending as well at 3.7% of their lending. With a positive return on assets, a net-loans-to-deposits ratio of 85%, and an outstanding CRA rating, this bank is an exceptionally effective institution in all areas of community development.
Because Southern Bancorp is such a large CDFI, they are a great option for anyone looking for the convenience and modernity of a large bank with all the impact of a local community bank. They offer both online and mobile banking options, so anyone can bank with Southern Bancorp even if they don’t live in rural towns in Arkansas and Mississippi. Even if you don’t plan to move your money to this Better Banking Option, anyone can take advantage of their financial information resources through their “Opportunity Center,” offered online, over the phone, and in each of their branches.