Southern Bancorp Inc. of Arkadelphia announced it has received a $45 million federal income tax credit allocation for businesses that make equity investments in severely distressed rural and urban communities.
The New Markets Tax Credit award, provided through the U.S. Treasury Department, is sold to investors to raise capital for specific projects and is claimed over a seven-year period. Fees earned from the allocation are then used to make further investments in low-income communities.
"The NMTC program is a win-win-win situation, because while investors receive a return on their capital, they and the qualified business ultimately make a lasting economic impact in low-income, severely distressed communities," Bill Wright, Southern Bancorp’s west region CEO and NMTC program director, said in a news release.
The Treasury awarded $5 billion in New Markets Tax Credit awards to 107 Community Development Entities, or CDEs, in its latest round of allocations. Southern Bancorp said it's the only such institution in Arkansas to receive the tax credits in this round.
Southern Bancorp has received a total of $100 million in NMTC awards over the previous two years, all of which has been allocated for qualified projects.
"Southern Bancorp has a proven track record of putting investment capital to work in places that need it most, and we will use this award to support projects designed to assist severely distressed communities throughout our service area," CEO Darrin Williams said in the release.