Southern Bancorp announced Monday (Nov. 7) it is receiving $45 million in the latest round of New Markets Tax Credit (NMTC) funding.
The money comes from the U.S. Treasury Department’s Community Development Financial Institution (CDFI) Fund, which is awarding $5 billion in NMTC to 107 Community Development Entities, or CDEs, from across the nation.
These CDEs will in turn provide loans, investments, or financial counseling in low-income urban and rural communities.
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.
“We are honored to receive our third allocation of New Markets Tax Credits from the CDFI Fund,” said Southern Bancorp CEO Darrin Williams. “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.”
The New Markets Tax Credit Program, established by Congress in December 2000, permits qualified business taxpayers to receive a non-refundable tax credit against federal income taxes for making equity investments in severely distressed communities.
The tax credits are sold to investors to raise capital for specific projects and are claimed over a seven-year period. The CDE then uses the fees earned from the allocation 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,” said Bill Wright, Southern Bancorp’s West Region CEO and NMTC Program Director. “There’s a strong need for this type of investment in our communities, and I’m proud to say we’ve put 100% of our previous two years’ allocations to work throughout our footprint, and we look forward to quickly putting the latest round to work within these communities.”