It took more than a decade for Southern Bancorp Bank to double its tally of total assets from $1 billion to $2 billion. The top executive of the bank’s parent company expects the journey to $4 billion will be much shorter.
“With the amount of capital we’re going to receive, we will double in size during the next three to five years,” said Darrin Williams, CEO of Southern Bancorp Inc.
A big catalyst for that future growth is a $237.5 million injection courtesy of the U.S. Treasury’s Emergency Capital Investment Program. The money isn’t in the bank but is expected to arrive in the second or third quarter.
“That will give us the capital bandwidth to work for quite awhile,” Williams said.
The money will double Southern Bancorp’s capital base and position the Arkadelphia bank to accelerate expansion of its $1.2 billion loan portfolio. Under the ECIP, a maximum investment of $250 million was possible, but Williams isn’t complaining.
“I have not heard of anybody receiving that, but I’ve also not heard of anyone getting more than us,” he said.
Southern Bancorp is among 186 community development financial institutions and minority depository institutions, a mix of banks, credit unions and holding companies, deemed eligible for the $8.7 billion-plus investment program.
“This historic investment is a transformational game-changer for mission-driven banks like Southern Bancorp,” Williams said in December when the qualifying lenders were announced. “We intend to put this capital to work by increasing our lending to small and minority-owned businesses and to low- and moderate-income customers in underserved communities.
“This investment will also allow us to reach deeper into the underserved communities in which we presently work, as well as expand our impact into new markets that can benefit from our unique blend of financial development services.”
Of Southern Bancorp’s 8,150 loans on the 2021 books, 47.7% were for less than $10,000. Of that loan total, 1,644 were borrowings of $1,000 or less.
On the other end of the scale, Southern Bancorp invested $31 million in seven businesses in 2021 through new market tax credits. The funding helped round out a combined $124 million in financing for the projects, which helped create 180 new jobs and served 1,060 low-income people.
The biggest of the seven was the $81 million Delta Peanut processing plant in Jonesboro to which Southern Bancorp contributed an $8 million investment through new market tax credits.
From hundreds to millions, the wide range of dollars put in play with customers reflects the bank’s broad perspective on lending.
“When you’re in small-town America, whatever walks through the door,” Williams said of Southern Bancorp’s willingness to work with borrowers both great and small.
Southern Bancorp has operated in capital-raising mode since 2017. During that time, the venture has attracted about $50 million from investors.
Among Southern’s shareholders are seven banks on the ground in Arkansas, which includes three headquartered in the state: Pine Bluff’s Simmons Bank and Relyance Bank and Little Rock’s Encore Bank.
JPMorgan Chase Bank, Bank of America, Regions Bank and BancorpSouth Bank also have taken shareholder positions in Southern Bancorp.
In addition to their financial stakes, JPMorgan and BOA also have opened their vast ATM networks to Southern Bancorp debit cardholders on a no-fee basis.
In addition to raising capital to fund growth, the lender has turned to the acquisition trail. Southern Bancorp is in the process of buying Premier Bank of Arkansas after last year purchasing the $188 million-asset Arkansas County Bank in DeWitt.
The $200 million-asset Premier Bank will be the biggest acquisition by Southern Bancorp since its 2009 purchase of $314 million-asset First Delta Bankshares Inc. of Blytheville, which owned Blytheville’s First National Bank and Bank of Trumann. The Premier deal began coming together nearly a year ago.
“They were looking for scale,” Williams said. “The regulatory pressure for a $200 million bank is tremendous, with the required investment in technology and people.
“They appreciated the mission and our purpose. We’re going to take time to learn what they’re doing well.”
Premier will provide the entry point for three new markets: Jonesboro, Marion and West Memphis. Window shopping for other acquisitions in Arkansas and elsewhere remains in the forefront.
“Absolutely,” Williams said. “Other than Premier, there’s nothing I can really talk about. We always keep our antennas up.”
Urban Branches
Since 2018, Southern Bancorp has opened Arkansas branches in Mount Ida and Glenwood and Mississippi offices in Olive Branch and Hattiesburg.
While its area of operation can be largely characterized as rural and Delta-focused, the venture is enlarging its footprint to reach underserved people in underserved markets in urban markets.
The starting point for that is a branchless area of Little Rock south of Interstate 630 between midtown and downtown. The new office in the 12th Street Station at 3917 W. 12th St. will be geared to walk-in customers only, no drive-through service.
“We really want to provide financial development services for the neighborhood,” Williams said. “We want to be actively engaged with the community. We want this to be inviting.”
The Southern Bancorp branch will be sandwiched between space associated with the University of Arkansas for Medical Sciences’ culinary medicine program and space associated with Philander Smith College’s criminal justice program, social justice hub and more.
The 1,300-SF bank office, operating under a 10-year lease with the city, should be open for business by summer.
The Little Rock branch is an outgrowth of efforts to develop new corporate offices in the 12th Street corridor. Would-be deals to buy land in the area fell through, but Southern Bancorp decided to roll with the leased branch space at the 12th Street Station.
The company has shifted its search for a corporate office eastward toward downtown. For now, Southern Bancorp Inc. is operating out of temporary quarters that formerly housed the Arkansas Bank Department.
Southern Bancorp also is looking to the east for urban branching.
“We’re all around Memphis, so down the road that’s something we’re going to look at,” said Nathan Pittman, senior vice president of policy and communications for Southern Bancorp Inc.
Southern Bancorp Bank, Arkadelphia
Total Assets:$2 billion
Net Income: $18.4 million
Equity Capital: $210.8 million
Noncurrent Loans: $12.5 million
Staff: 385
Full-Service Locations: 25 in Arkansas and 17 in Mississippi
(Dec. 31, 2021)
Total Assets |
Equity Capital |
Noncurrent Loans |
Net Income |
Efficiency Ratio |
|
2020 |
$1,680,692 |
$187,554 |
$7,902 |
$14,026 |
63.33% |
2019 |
$1,495,986 |
$169,417 |
$11,115 |
$13,800 |
63.54% |
2018 |
$1,387,751 |
$152,377 |
$12,146 |
$12,760 |
65.26% |
2017 |
$1,235,070 |
$141,217 |
$15,477 |
$11,056 |
71.45% |
2016 |
$1,149,088 |
$129,981 |
$17,334 |
$10,143 |
71.51% |
2015 |
$1,185,130 |
$142,755 |
$9,760 |
$9,818 |
71.11% |
2014 |
$1,172,557 |
$136,033 |
$5,957 |
$11,524 |
65.78% |
2013 |
$1,150,854 |
$119,566 |
$7,676 |
$9,513 |
69.06% |
2012 |
$1,117,585 |
$122,551 |
$7,070 |
$10,822 |
68.05% |
2011 |
$1,147,058 |
$119,129 |
$9,745 |
$7,983 |
70.89% |
