Magazine article American Banker

Ark. Charity That Owns Bank Wants to Buy Some More

Magazine article American Banker

Ark. Charity That Owns Bank Wants to Buy Some More

Article excerpt

When Arkansas' Southern Development Bancorp. was founded 10 years ago- at the urging of Gov. Bill Clinton-its mission was to rebuild the local economy.

The idea was to use profits from a banking subsidiary, Elk Horn Bank and Trust, to pay the expenses of community development affiliates. But over time the charitable side of the company grew faster than the bank, leaving $111 million-asset Southern Development to rely on supplementary grants.

Now the company hopes to raise $20 million in a secondary stock offering to buy more banks so it can again be self-sufficient.

"To make certain we are going to be in the community development business for a long time, we have to get away from grants," said William H. Brandon, president and chief executive officer of Arkadelphia-based Southern Development. "And the only way to do that is to grow big enough not to need them."

The first target is Helena, Ark.-based First Delta Corp., where Mr. Brandon is chief executive officer. A deal between the two-which could be announced as early as this week-would allow First Delta's two bank subsidiaries, with combined assets of $115 million, to keep their charters, management teams, and boards. Bank profits would be filtered through the holding company and sent back to the community.

Over the years Southern Development's nonprofit affiliates have stressed job training and job creation. For example the Good Safe Fund has trained welfare recipients to be home health nursing aides. …

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