Southern Bancorp raises nearly $18 million from banks, private investors

Little Rock-based Southern Bancorp has raised $17.75 million in funding from several of the region’s top banks and private investors as part of the rural bank holding group’s capital campaign to bolster new investment in underserved and economically distressed communities across the Delta region.

As the parent company of one of the nation’s largest community development banks, the private sector backing is part of Southern Bancorp’s long-term capital campaign to raise up to $50 million under the U.S. Treasury Department’s Community Development Financial Institutions fund. That Treasury Department program provides federal dollars with private sector capital for mission-driven financial institutions like Southern Bancorp that take a market-based approach to supporting economically disadvantaged communities, officials said.

“The make-up of our initial round of investors illustrates the broad range of investment interest in strengthening the role of well-performing community banks,” said Southern Bancorp CEO Darrin Williams. “From global funds looking to support distressed American communities, to regional financial institutions seeking to share in our CRA benefits, to families looking for opportunities to support the communities they hold dear, these investors have all joined in our mission to create economic opportunity where it’s needed most in a way that provides both a return of and on capital.”

The first-round capital campaign investors include:
• Simmons First National Corp. of Pine Bluff;
• Tupelo, Miss.-based BancorpSouth;
• Prudential Impact Investments Private Equity LLC;
• Sustainability Finance for Real Economies (SFRE) investment fund;
• Mack McLarty, founding Southern board member and former chief of staff to President Bill Clinton;
• Franklin McLarty, co-founder and vice-chair of McLarty Capital Partners;
• Wittington Portland Murdoch Limited Partnership; and
• 100% of the directors and executive officers of Southern Bancorp.

Founded in the 1986 by then Gov. Clinton, Walmart Chairman Rob Walton, the Winthrop Rockefeller Foundation and others who were concerned about the economic decline of rural Arkansas, Southern Bancorp is the bank holding company for Southern Bancorp Community Partners, a nonprofit development finance and lending nonprofit; and Arkadelphia-based Southern Bancorp Bank, one of nation’s largest rural development banks.

The certified CFDI institution has over $1.2 billion in assets, more than 80,000 customers and has originated over $4 billion in loans through 46 branches and loan production offices in Arkansas and Mississippi. In June 2017, the bank holding company also completed the acquisition of Farmers Bank of Hamburg, which has assets of $42 million.

Over the last two years, Southern Bancorp has been awarded more than $3 million from the CDFI fund to expand capital investment in low-income communities across the two-state Delta region.

“We will use this growth capital to expand our impact into new markets. There is considerable need throughout the American Mid-South for our unique brand of financial development and access,” said Williams, a former Arkansas legislator. “As we continue growing, we look forward to engagement from a growing base of investors interested in pursuing strategies that put capital to work for themselves and disinvested communities.”