Community banking

Southern Bancorp in Arkansas, which raised $35 million in capital from private investors, is out to prove that that community development financial institutions can deliver attractive returns and fulfill their missions to help the underserved.

Lenders welcomed the move as a helpful first step but are still urging policymakers to develop a broader, simpler process for expediting the approvals of loans extended to troubled small businesses under the Paycheck Protection Program.

Deferrals may be hiding credit issues, leading lenders to track deposit flows, property maintenance and other factors to gauge the true health of their portfolios.

Many consumers are taking to the highways and the water for safe getaways during the pandemic — powering one of the few bright spots in lending. However, bankers warn that boomlets usually come with distinctive credit risks.

The flood of liquidity that accompanied the pandemic recession isn’t likely to subside anytime soon. Banks will have to employ a mix of securities buying, hedging and other balance-sheet-management tricks to prop up margins longer than initially imagined.