Tulsa Move Boosts Citizens Bank’s Bottom Line

When the board of Pawhuska-based Citizens Bank of Oklahoma decided it was time to tap the potential of the Tulsa market, it likely didn’t foresee that the move would allow the bank to increase its income 220 percent in the first year.

Citizens Bank of Oklahoma showed the greatest improvement in 2005 in net income of all of the banks with a presence in the Tulsa Metropolitan Statistical Area. Its earnings jumped from $178,000 at Dec. 31, 2004, to $570,000 at Dec. 31, 2005.

Assets increased by more than 70 percent, jumping from $48.5 million to $82.7 million in the same time period, according to the FDIC. Loans nearly doubled, climbing from $33.9 million to $60.6 million.

The closest banks in net income performance were JPMorgan Chase Bank NA with a 134 percent increase and Bixby-based Citizens Security Bank & Trust Co. with a 106 percent jump.

Kip Herburger, president of the Tulsa branch of Citizens Bank, said the growth has continued: “Income has grown virtually every month since Dec. 31. We are seeing a very good increase on that line.”

Net income as of June 30, 2006, stood at $758,000.

“Our assets are still growing,” Herburger said, “but not at the same pace as the previous year, but still good growth. We have a lot of things we are working on right now that will facilitate that growth.”

Assets had reached $91.4 million by Aug. 29, an increase of $60 million since the Tulsa branch opened at 3353 E. 41st St. on Sept. 22, 2004, said Will Richardson, executive vice president.

“Tulsa has outgrown Pawhuska as far as asset base,” he said. “When we first started, we had a $30 million base.”

Herburger attributed the increase in net income to loan growth and controlling expenses. The increase in loans provided the “biggest chunk of it,” he said, adding, “we have a pretty good handle on our overhead, so we really watch what we are spending our money on, and we are also trying to do the best that we can with non-interest income.”

He also said the bank had benefited “from the increase in interest rates.”

Richardson said the board of directors of the Pawhuska bank decided to open the Tulsa branch when they “realized that they had pretty much grown just about as much as they could grow Pawhuska.”

“They wanted to get into the Tulsa market and put together a management team to grow the overall size of the bank and increase the profitability,” he said.

The bank built the 5,000-SF facility at 41st Street and Harvard Avenue “right in the center of the city, so we’re fairly convenient,” Herburger said.

He said the bank was also able to get access to over 100 TransFund ATM locations in Tulsa in an agreement with Tulsa-based Bank of Oklahoma NA “so people can bank pretty much everywhere.”

He said the bank “has been able to partner up with different entities and different groups that helped us to provide basically the same things that any big bank can do. The only negative part is that we have one location in Tulsa, but we can offer virtually every banking service that there is.”

Among the partnerships that have supplemented the full-service aspects of the bank are desk-lease agreements with Capital Mortgage to provide mortgage services and Smith Barney for investment portfolios.

Other services include online banking and bill pay, cash management for business customers and lockbox. In addition, the bank is part of CDARS, the Certificate of Deposit Account Registry Service, which allows depositors to get FDIC insurance up to $25 million.

Richardson said the bank has focused on developing small business accounts “because it has been our background, but we certainly have all the products in place to handle individuals as well as the consumer side of banking.” Both Richardson and Herburger worked for Bank of Oklahoma in its Small Business Center before coming to Citizens Bank.

Herburger said the growth of the Tulsa branch, which has 11 employees, “has pretty much come from our contacts and word of mouth.”

“Our customers are our best salesmen. They really are,” Richardson said. “It says a lot for us as well because if they are out there touting us, then its helping us grow and we must be doing something right.”

“When we do get new customers, it is very hard for them to leave because virtually every one of us here knows every single customer,” Herburger said. “So when they (customers) come in we have pop, get coffee, sit down and talk with people. It is kind of your old-fashioned small town banking right in the middle of the city.” ?



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