Liberty Bancorp of Oklahoma City has reentered the credit card business after a five-year hiatus.
One of the few Oklahoma institutions to survive the oil bust, Liberty will be trying to tap consumer loyalty to the hard-hit state.
Liberty is promoting its Visa and MasterCard card products to its 30,000 customers with slogans like "Bring your balances back to Oklahoma."
In 1987, the bank, which has 30 branches in the Oklahoma City and Tulsa areas, sold its credit card portfolio to Lomas Bank of Wilmington, Del. Lomas eventually became First USA Inc. of Dallas.
Liberty and Lomas signed a noncompete agreement in 1987 that barred Liberty from issuing credit cards until September.
Big Losses on Oil Bust
Liberty, like many other Oklahoma banks, had large losses after energy loans went sour.
"Before people realized that oil prices were going down instead of up, Oklahoma was the place to live," said David Berry, director of research at Keefe, Bruyette & Woods in New York.
Liberty was one of the few Oklahoma banks that did not fail in the 1980s, when inflated real estate values plummeted and unemployment increased.
Its ability to sell the credit card business was one reason why.
"Credit cards were salable assets in 1987," said Barney Lehmbeck, senior vice president of Liberty Bancorp.
Liberty now "sees credit cards as an attractive means of acquiring loans," said Mr. Berry of Keefe Bruyette.
In 1994, the bank will begin targeting new customers by plugging the cards in print, radio, and television spots.
Liberty, which owns a hot-air balloon that it flies at special events throughout the state, will feature full-color photos on the credit cards of the balloon and a panoramic view of the Oklahoma City skyline.
"We decided to use the balloon on our cards because it is a widely recognized Oklahoma symbol," said Mr. Lehmbeck.
The bank's offer includes an introductory rate of 9.4% through June and an annual fee waiver for the first year.
The rate then jumps to either prime plus 7.996 with a $15 fee or prime plus 9.9% with no annual fee.
Consumers who transfer a balance to a Liberty card will receive a 1% rebate on the outstanding loan.
"Our reentry into this important market represents the completion of another phase of our strategic plan, which is based on increasing the services and products we offer our customers," said Charles E. Nelson, chairman of Liberty Bancorp.