Going for a bull ride

Citizens Trust becomes third publicly traded black bank

Another black-owned bank just went public. Well, sort of. In truth, Citizens Bancshares Corp., the parent company of Atlanta-based Citizens Trust Bank (CTB), has actually been publicly owned since 1921, says CTB President and CEO James E. Young. But for the first time in 78 years, the common stock of the company was made available on the public market. While the action doesn’t qualify as an initial public offering because no new shares are being sold, it does mean the bank has given the public access to the 2.2 million existing shares that are currently outstanding.

“For decades the stock has been closely held and not traded on any exchange,” says Young. So why the change now? Young says that by making the stock available on the over-the-counter market, “Our shareholders are able to benefit from a strong and robust market, and it is now easier for them to buy or sell stock.”

In the past, if investors wanted to buy stock, they had to call the bank directly and would purchase the stock at book value. However, Young cites the trading price of the shares on their very first day in the marketplace as the perfect example of why the bank decided to offer the stock publicly.

“Our stock opened at $7 per share and has been as high as $20. It changes daily, but the reality is that when we were closely held, our stock never traded above book value, so we never saw this type of appreciation,” says Young. “By being in the public arena, we are increasing the wealth potential in our community.”

In order to move into the public arena, CTB entered into an agreement with Nashville, Tennessee-based J.C. Bradford & Co., which will act as the principal market maker for the bank’s transactions. In a nutshell, this means J.C. Bradford will act as a broker or intermediary between the buyers and the sellers. The company has issued the bank a ticker symbol, CZBS, which will ease trading on the over-the-counter Bulletin Board market (OTC-BB). By using this symbol, any stockholder or brokerage firm anywhere in the country can pull up a current quote on the stock.

According to Young, the bank has an increasing array of insurance and investment products, has increased mortgage lending and has plans to expand its network of branches throughout the state of Georgia and ultimately nationwide.

As for maintaining the bank’s status as minority-owned and operated, Young has no fear. Currently, there are roughly 1,300 shareholders, most of whom owned stock before shares went on the public market. And, Young comments, “There is not a large list of shareholders and those on the list will retain their stock. We are confident that we will remain a minority-owned and managed financial institution.”

But being in the public marketplace will come with its share of challenges, says Joe Gladue, equity analyst for Baltimore investment firm the Chapman Co. “To be successful, the bank will have to really present investors with steady growth in their outstanding loans and

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