A handful of corporate bank executives have announced plans to award employee bonuses to the tune of millions of dollars, more than a year before reaping the fiscal benefits of sweeping federal tax reform.
Bonuses are trickling down to full- and part-time associates at bank branches at and near Springfield following the late December passing of the federal reform bill.
The employee paydays will come from Great Southern Bancorp Inc. (Nasdaq: GSBC), Central Bancompany Inc. (OTC: CBCYB), Commerce Bancshares (NYSE: CBSH) and others that decided to make early investments in their workforce, each citing a federal tax rate drop from 35 percent to 21 percent.
The new tax rate became effective Jan. 1. But corporate filings for 2017 are due by March 15, after which possible benefits from the new tax rate would be realized.
“It’s pretty straight forward,” said Andrew Tasset, Central Bank of the Ozarks vice president and marketing manager. “Realistically, we’re seeing some tax relief and tax breaks for the company, and we just wanted to share that with the employees for all their hard work.”
Jefferson City-based Central Bancompany is the $13 million holding company for Central Bank of the Ozarks, Central Bank of Lake of the Ozarks and Central Bank of Branson.
Full-time employees at those branches will get $1,000 bonuses, and part-time employees will get $500. The bonuses will arrive starting the week of Jan. 15, Tasset said.
With more than 2,500 employees across four states, Central Bancompany plans to award nearly $2.4 million overall in employee bonuses.
Springfield-based Great Southern Bancorp Inc. President and CEO Joe Turner also cited the federal tax rate drop in awarding bonuses to more than 1,200 employees companywide.
Great Southern Bancorp Inc. operates Great Southern Bank and will give its full-time employees $1,000 and part-time employees $500. They will get their bonuses Jan. 31, Communications & Marketing Director Kelly Polonus said.
Turner said the $4.5 billion asset corporation plans to issue more than $1 million overall in bonuses.
“When the federal tax rate lowered from 35 percent to 21 percent, if your paying 35 percent right now, you’re certainly going to see a benefit,” he said. “And that’s why banks should see benefits, because we have generally paid high taxes to start with.”
Kansas City-based Commerce Bancshares Inc. Chief Financial Officer Chuck Kim said in an email that the banking industry currently faces one of the highest effective federal tax rates.
With the lower rate in 2018, Kim said he’s also confident in awarding the bonuses early.
“We have spent considerable time looking at the new legislation, and tracking it as it progressed, and we have a fairly solid understanding of its impacts to our business today,” he said.
Commerce Bancshares did not have the total dollar amount available for its bonuses for 3,450 eligible full- and part-time employees. Full-time employees’ bonuses will be $1,000 and part-time will be $250.
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