Southern Bancorp's Model for Community Economic Development: The Delta Bridge Project

Ben Steinberg, Ben Goodwin, and Michael Rowett

Since late 2003, Southern Bancorp (Southern) has pioneered a comprehensive and geographically focused community development initiative in one of the most distressed communities in rural America: Phillips County, Arkansas. While it is too early to conclude that Southern's strategy will achieve its goals, there are initial signs of success. The Delta Bridge Project has generated over $50 million in investments in Phillips County and created the beginnings of an economic revival. From a practitioner's view, this chapter explores Southern and its theory of change; the status of Phillips County; the components of Southern's new community development strategy; and Southern's innovative financing packages and leverage.

Southern Bancorp

Southern is a development bank holding company committed to transforming rural economies by creating new trends of investment in people, jobs, businesses, and property. Southern's shareholders – foundations, religious institutions, and phil- anthropically minded individuals – mandated that Southern provide a social return to shareholders, foregoing a financial return. The social return is largely measured by Southern's impact on community development. This model allows Southern to reinvest and leverage a large portion of its net income to support community development investments rather than paying dividends out to private shareholders.

For more than fifteen years, Southern has operated a family of banks and nonprofit development companies that work in concert with one another to promote development in rural Arkansas and the Delta region of Arkansas and Mississippi. With $530 million in assets, forty locations in rural Arkansas and Mississippi, and more than 250 employees, Southern is the largest and most profitable rural development banking organization in the United States. In total, Southern operates three banks, Elk Horn Bank in Arkadelphia, Arkansas; First Bank of the Delta in Helena-West Helena, Arkansas; and Delta Southern Bank in Ruleville, Mississippi.

Southern's three affiliated nonprofits play an important role impacting individual, family, and community development in intensively managed ways that go beyond the scope of a community bank. Southern Financial Partners, the first nonprofit affiliate, spearheads comprehensive community development initiatives like the Delta Bridge Project in Phillips County. It also provides loans and technical assistance to small businesses in support of community development initiatives. Southern Good Faith Fund, the second nonprofit affiliate, seeks to increase the income and assets of low-income and low-skilled residents of the Delta in Arkansas and Mississippi through services such as Individual Development Accounts, career pathways, and small business-development technical assistance services. A third nonprofit affiliate is Southern Community Development Corporation, which is its affordable housing subsidiary. Southern CDC's housing units are developed and managed for low- to moderate-income individuals and families. Southern employs the expertise and synergy of its family of companies to produce a results-oriented, comprehensive approach to community development.