U.S. Markets close in 1 hr 59 mins

The Wall Street Transcript: Interview with Daryl D. Pomranke, President and CEO of CFS Bancorp, Inc. (CITZ)

67 WALL STREET, New York - February 5, 2013 - The Wall Street Transcript has just published its Southeast & Midwestern Banks Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs and Equity Analysts. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Heightened M&A Activity - Consolidation in Regional Banking - Growth in U.S. Midwest - Regulatory Obstacles and Fee Income Replacement - Rise of Commercial and Industrial Lending

Companies include: CFS Bancorp Inc. (CITZ) and many others.

In the following excerpt from the Southeast & Midwestern Banks Report, the President and CEO of CFS Bancorp, Inc. (CITZ) discusses the outlook for his regional bank.

TWST: Let's begin with a background summary on CFS Bancorp and then bring us up to date. Tell us what's happening today.

Mr. Pomranke: CFS Bancorp was formed in 1998, but the wholly owned subsidiary, CFS Bank, was founded in 1934. We are a single bank holding company with about $1.1 billion in total assets with 20 branch locations in the northwest Indiana, southwest Chicago metro area. Some of the unique characteristics of our company is we have $108 million of tangible common equity, no holding company debt, no TruPS , no TARP, and we are strongly deposit-funded, with over 63% of our deposit base being core deposits and 95%% of our total funding being deposit based.

Our strategies since 2007, when our board approved our strategic growth and diversification plan, have been to reduce our nonperforming assets, improve our efficiency ratio with revenue enhancements and cost reduction initiatives, growing by diversifying and targeting small and midsize business owners for relationship banking opportunities, as well as deepening relationships with a higher percentage of client share of wallet.

TWST: So you've doubled checking account openings - 66% of new accounts are in the coveted 20 to 49 age group and half of your accounts are new relationships to the bank. Would you explain how you have managed to succeed when so many others have not?

Mr. Pomranke: Number one, we believe that our program fits a lot of the demographics and key opportunities that we have in our markets. Secondly, we have to give credit to our entire retail banking team, and in particular Shawn Wagoner, our head of retail banking, who has driven the implementation of this program, as well as Dale S. Clapp, our EVP of Sales Management, who empowered the teams to be creative and make a difference.

Finally, we need to acknowledge everyone within our organization who bought into, believed in and executed this strategy. Every six weeks we kick off a new campaign, and we have about 135,000 direct-mail pieces delivered to targeted areas in our markets. And what we have allowed our people to do, and it started out with our retail platform and now we have moved it across every area of the bank, is provide a theme for every big day, which is the Friday after the majority of the direct mail drops, and we decorate our branches, and celebrate free checking. This program has been phenomenal as far as attracting new clients and one of the big components of this program is the tell a friend focus.

TWST: With so many banks trading below book, there is speculation that as many as 20% to 30% of banks will be merged over the next few years, ultimately affecting the fortunes of smaller, regional and community banks. Is banking in a period of consolidation, and if so what does it mean for community banks as we know them? What does it mean for CFS?

For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.