seeing a little bit of an uptick from the very low levels we have seen, but I don’t really think we’re going to see a trend as robust as the consolidation trend in the mid-1990s.”
Gladue believes that, in the South where there are many small historically black local banks, good markets still exist for banks that are very close to their customers. They won’t all be absorbed into larger institutions. “I think there will be a place for small independents for a long time. Eventually, their numbers will probably get smaller, but I think a lot of them will be around, ” says Gladue.
Casual discussions between Citizens Trust and CFS Bancshares began around June 2001. As a savings bank, the current banking charter of Citizens Federal (the operating subsidiary of CFS Bancshares) limits the service it provides, which is primarily residential mortgage financing. As a commercial bank, Citizens Trust wants to enter the vibrant Birmingham, Alabama market. “Neither of these organizations had to merge to survive. These were two profitable corporations that had the vision to see that they could do more together than they could alone. That is the basis for the transaction,” says Young.
CFS Bancshares, the parent company of Citizens Federal Savings Bank of Birmingham, now Citizens Trust, was founded by late Birmingham entrepreneur Dr. A.G. Gaston in 1957. Executives at CFS’s Bancshares expect little attrition as a result of the merger. “In most mergers you would be downsizing, but in this situation, we are going to try to build on what we already have here. We are going to create new jobs from bringing in new products and services to the community. You will see the same faces. I will still be president and CEO of the Alabama division,” says Bunny Stokes Jr., chairman and CEO of CFS Bancshares.
Citizens Trust wants to be the first black financial institution to reach the billion-dollar mark and company executives say it has the cash and the aggressive acquisition strategy to do just that, so more consolidation among black banks could lay ahead.