In 1907, a cluster of homes seated parallel to a railroad became Atmore, Alabama. In the same year, the Wright Brothers flew the first airplane, residential electricity was a novel idea and the town’s Bank of Atmore was already 3 years old.
Both the bank and community survived the Great Depression, two world wars and growing pains.
Over the years, the community changed and so did its banking. Banking grew from hand-cranked adding machines to computer mainframes, which merged with the internet, the cloud and ATM passwords.
In 1904, the Bank of Atmore had paid capital stock of $15,000. In 1982, the Bank of Atmore changed its name to United Bank and created a holding company, United Bancorporation of Alabama. In 2017, the company expanded its capacity to form UB Community Development, a community development partner of United Bank.
Today, with its headquarters still in Atmore, the company, both United Bank & UB Community Development, has 25 offices across Alabama and Florida with a purpose driven multi-bottom line mission of strong financial performance, centered around community and economic development. The company’s 2020 Financial Report shows $993 million in total assets.
UBAB is traded on OTCQX exchange under the stock ticker UBAB.
But one of the most significant milestones of growth came in 2010. In addition to being a full-service bank, United Bank was certified by the U.S. Treasury as a Community Development Financial Institution (CDFI). It is the only Community Development Entity (CDE) in Alabama.
“That designation changed us dramatically,” says CEO Robert Jones. “Being certified allowed us to take public resources offered through the U.S. Department of Treasury. We add that to the high degree of accountability for stewardship we have in administering the programs, blended it with private capital of a stock-owned company like United, and used it with the capabilities of an insured depository.
“That is a very unique combination,” Jones adds. “Many of the programs we help administer are laser-focused on distressed areas that need the most assistance. We were one of the first banks in Alabama to offer these type programs. At the time we started, Alabama had no involvement in this type of funding. We traveled across the state to make people aware. Our team held educational meetings, workshops and seminars — sometimes to a room of two or three people.”
As United Bank’s projects starting showing success, interest perked and gained attention.
CDFI funds are managed through United Bancorporation’s subsidiary and United Bank’s partner, UB Community Development. “Certification kicked us off into formally participating in that sector,” says Alex Jones, UB Community Development senior managing director and president. “It led us to where we are today.”
Where they are today is a directed effort on extending solutions to improve the social and economic conditions in their communities.
Through UB Community Development, funds are distributed through categories, including New Market Tax Credit, the Community Facilities Lending Program and Capital Magnet Program, all of which support economic development, municipal and non-profit funding, as well as affordable housing.
New Market Tax Credits (NMTC) is a federal program that stimulates private investment in low-income urban neighborhoods and rural communities. The funds are only distributed through Community Development Entities (CDE) as deemed by the U.S. Treasury Department. Once received, CDEs, such as UB Community Development, disburse the funding to qualified entities.
In 2016, United Bancorporation of Alabama became the only CDE in Alabama to receive a New Market Tax Credits allocation.
In July 2020, UB Community Development received $65 million in New Markets Tax Credits, its third allocation, totaling $185 million. These awards are being deployed into projects such as healthcare, education, manufacturing, and most recently Coastal Growers Peanut Shelling Plant, a project valued at more than $100 million and expected to bring some 150 jobs to the community.
“Alex quarterbacked for us to receive over $50 million,” says Joe Parker, a driving force behind the soon to be built Coastal Growers in Atmore. The 60-acre, $87 million peanut shelling facility was made possible by UB Community Development’s tax credits.
“The tax credits reduced the amount of equity we had to raise to get into business,” Parker adds. “The amount we had to raise from investors was less because of New Market Tax Credit allocation. It allowed us to have the right asset ratio in order to finance the Coastal Growers project.”
Other recipients of NMTC include the Community Foundation of South Alabama, a philanthropic organization serving and investing in the needs of communities in eight counties across Southwest Alabama.
“United Bank’s strong commitment to support impactful community development is a perfect partnership for the CFSA’s newly constructed facility using New Market Tax Credits,” says CFSA President/CEO Rebecca Byrne. “The CFSA is committed to creating opportunities for youth, particularly those from under-privileged communities. Our facility provides a much-needed community asset for those non-profits, businesses, schools, government entities and the like to come together for the betterment of all those we serve.”
Addressing the numbers, Alex Jones says, “Our new markets project outlay to date is $475 million. It has created 4,500 jobs.”
Another tool, the Community Facilities Lending Program, provides rural area funding, based in part on census tracts and counties. Those eligible include grant matching funds, public bodies, fire protection districts, non-profit corporations with significant ties to the community, and qualified Indian tribes.
Satsuma is one of the cities that has benefitted. “Congressman Bradley Byrne told us about UB Community Development’s program,” recalls Satsuma’s former mayor, Tom Williams. “On the congressman’s recommendation, we contacted United Bank about the specialized program, available from the U.S. Department of Agriculture. Alex and others in the bank worked with us closely and we were delighted to work with them. They guided us through the process.”
Satsuma received approximately $2.2 million in Community Facilities Lending funding to build its Public Safety Building. The 9,600-square-foot complex on seven acres opened in October 2019. Soon after the safety building was complete, the city used additional CFL funds to replace an aging firetruck.
The third program managed by UB Community Development is Community Housing Capital funded by the Capital Magnet Fund, a program focused on multifamily affordable housing. “Basically, CMF is dollars allocated as gap financing for affordable housing dollars towards apartments and related type projects,” notes Alex Jones. “As of now we have total project costs of $190 million for 1,200 housing units in Alabama, Mississippi and Georgia.”
In addition to funding needed projects in the region it serves, the Atmore bank’s works have won accolades for the bank itself.
Recognizing success in banking and funding programs, United Bank was ranked 9th in the country by American Banker magazine. United Bank was the only Alabama bank ranked in the top 100 on the magazine’s list of top banks with assets of less than $2 billion.
It also has won kudos as a best company to work for.
From 1904, the community bank beside the railroad tracks has grown its company, customer base, mission and project load in four states. “We like to say in Alabama, United Bank covers everywhere from Atmore to Ardmore,” says Alex Jones.
As one might imagine, competition is fierce for such programs, funded by the U.S. government and entrusted to CDEs. “But there is much work ahead,” Alex adds, “We have a lot of projects in the pipeline.”
This story is featured in the May 2021 issue of Business Alabama magazine.