Ozark Bank Offers Custom Solutions for Nonprofit Partners

Over its 119 years of business, $350 million-asset Ozark Bank has established deep roots in its community. “Our team members try to get involved any way we can,” says John R. Hedgpeth, senior EVP and CFO of the Ozark, Missouri, community bank. “They get involved with entities that have good mission statements and that they believe in.”

More specifically, Ozark Bank has established itself as a friend to nonprofits and mission-focused organizations, such as Children’s Smile Center, an Ozark Bank customer that provides dental services to thousands of low-income children in the community.

“[Ozark Bank has] encouraged community-wide efforts, supported the success of local school districts, provided a boost to fledgling entrepreneurs and served the citizenry through banking services to all local government entities,” says Jackie Barger, executive director of Children’s Smile Center.

Hedgpeth shares that Ozark Bank has developed deep expertise in customized financial solutions for community organizations, whether local government agencies or nonprofits. “Relationship banking recognizes that every nonprofit is different,” he says. “We listen to them and work together with them.”

Offerings that make a difference

Many organizations have taken advantage of Ozark Bank’s lease-purchase solutions in particular. These enable entities to build and use a facility or acquire and use capital equipment while making payments. They then acquire ownership at the end of the lease term. 

This approach offers many benefits. Local governments, for example, can acquire critical infrastructure or equipment without having to go to voters for a referendum or a bond issuance. 

“It’s a lot faster and cheaper than traditional bond financing,” Hedgpeth explains. He adds that Ozark Bank works with attorneys to offer its tax-exempt customers lower interest rates. 

Ozark Bank has funded lease-purchase opportunities for two capital building projects for the Christian County Ambulance District (CCAD) and is beginning a third. “These buildings are strategically placed and allow us to provide emergency response services where needed in a very prompt time frame,” says Christie Thompson, CCAD director. 

Thompson says the lease-purchase option is essential for the ambulance district. “With our current property tax revenue, we can’t fund these buildings up front,” she says. “This allows us to make payments over time and build the buildings that are needed.”

She appreciates the Ozark Bank partnership, noting its professionalism and transparency in communication. “John Hedgpeth has gone above and beyond to stay in the loop and make sure that everything’s taken care of with our building projects,” she says.

Tailoring financial solutions for community organizations requires a heightened level of due diligence. “Nonprofits present unique risks to how we assess creditworthiness and financial health,” Hedgpeth says. 

Like any loan financing, the community bank carefully reviews revenue streams, whether these are donor-, tax- or grant-based. In addition, the bank looks at the specifics of, for example, the makeup of the revenue stream, such as property taxes vs. sales tax, donor-based, etc. “We need a deep understanding of where donations come from,” Hedgpeth says. 

He adds that Ozark Bank pays particular attention to restricted versus unrestricted donated funds. “Most donations go to unrestricted funds, and the entity can use the funds as they see best, but some donors require some funds to go to a specific project,” Hedgpeth says.

The community bank reviews financial statements and conducts a detailed cash flow analysis with attention to how cyclical the revenue cycle is. “We look at whether they have audited financial statements or at least reviewed [them],” Hedgpeth says. “We look for internal controls and transparency.” 

Organizational strength and management, while less quantifiable, are still critical risk assessment criteria. “We look at management and board strength and what the bylaws require in terms of board approval or budget planning,” Hedgpeth says. 

Guiding nonprofits through tough times

Ozark Bank shepherds its municipal and nonprofit customers through a variety of financial challenges. Jacque Breedlove-Harness, director of development and community relations for Least Of These Inc., a food pantry in Christian County, says that Ozark Bank was essential in helping the nonprofit through the COVID-19 crisis. 

“We received two [Paycheck Protection Program] loans during the height of COVID,” Breedlove-Harness recalls. “Ozark helped us to get the loans and then helped us get loan forgiveness. Loan forgiveness was so important to our mission. The number of people seeking food assistance since the pandemic started has steadily increased, and with inflation, our costs have also increased. Loan forgiveness allowed us to continue feeding people.”

Ozark Bank also provides financial mentoring and advice to its nonprofit clients. “John Hedgpeth has been really good at taking an annual snapshot of our financials and bringing that to the board and explaining where we are and where we’re projected to be,” says CCAD’s Thompson. “That’s an extra protection that they do for us as a service, so we can see what kind of financial track we’re on.”

Charitable giving, too

In addition to financial solutions and expertise, Ozark Bank makes direct contributions to local entities by sponsoring galas and fundraisers. 

Barger of Children’s Smile Center notes that Ozark Bank is one of two organizations that have sponsored Hot Air Balloon Glow, its annual fundraising event, for all 19 years of its existence. “The success of this event has resulted in much-needed financial support for our nonprofit dental clinics,” Barger says. 

Breedlove-Harness praises Ozark Bank for hosting food drives at branch locations. “I can’t even explain how supportive they are of the nonprofits in this community,” she says. “We [are so appreciative of] our partnership and relationship with Ozark Bank.”