T.B. Boyd comes from a long line of Baptist preachers and successful businessmen. And as chairman of Citizens Savings Bank and Trust Co. he has a flock of true believers.

The small bank, which Mr. Boyd's great-grandfather founded, has built a business around lending to minority churches - a business that few community banks, much less a regional bank, could ever hope to match.

"The church is the summation of the community," he says.

Restaurants may close, dry cleaners may go out of business, accounting firms may dissolve, but in the world of Theophilus Bartholomew Boyd, churches stay.

"They are the most stable institutions in the community," he says.

While church lending may not be for every community bank, Citizens offers lessons in how to nurture a niche and gather devout customers. If community banking is increasingly becoming a function of determining which niche to pursue, then Citizens-one of the oldest black-owned banks in the country-already has this part of its job accomplished.

About 23% of Citizens' $18.5 million loan portfolio, or $4.2 million, is lent to 35 Nashville churches of various denominations. By making loans to these churches' parishioners and their small businesses, much of the rest, according to bank officials, is tied, at least indirectly, to the bank's financing of houses of worship. Another 37% of its loan portfolio is to other small businesses.

The rest of the bank's job is execution, and that is where Deborah ScottEnsley comes in. A 15-year veteran of the financial side of the $33 million-asset bank, she was promoted to chief executive in 1995. She has reenergized the bank, after years of losses, focusing on loan pricing and overhead costs. This has allowed Citizens to pursue its strategy.

In 1992, 4.43% of Citizens' loan portfolio was not performing. As of last September, that percentage had fallen to 0.84%. It lost money two out of the three years between 1992 and 1996, but in 1996 the privately owned bank had increasing profits; it posted a cumulative 10.09% return on equity for all of 1996 and net income of $163,000. That's still well below its peers, but not bad for a bank that had been losing money.

"We did a very detailed analysis of expenses," said Ms. ScottEnsley, also the chairwoman of the National Bankers Association. Instead of amending existing bank policies, she scrapped everything and started from scratch. Her team evaluated every account and every expense item.

"Independent banks will survive as long as they are run efficiently," she said.

One of the biggest changes she made was moving the headquarters from downtown Nashville to the outskirts of town. Citizens had been paying high prices for prime office space. The majority of deposits in the bank come through the branch office on Jefferson Street, near downtown. The move brought about a 22.46% drop in the bank's overhead for the fiscal year that ended in September.

One of its more ambitious recent forays into the retail arena hasn't been church-related, however. In 1995 the bank opened a supermarket branch in a local Kroeger's. The branch has garnered $2.6 million in deposits and $645,000 in loans. Its personnel prowl the store drumming up business, and a recent Citizens promotion in the produce department declared, "Lettuce Be Your Bank."

The bank also focused on its lending habits. "We reevaluated how we were pricing loans," said Ms. ScottEnsley. Last fiscal year Citizens' commercial and industrial loans-primarily loans to small churches and small businesses-grew 58%, while consumer loans shrank.

"They are recognized for working with congregations to structure loans," said Mack Linebaugh, president of the Bank of Nashville.

That recognition goes back more than a century. Richard Henry Boyd, a self-educated former slave, Union soldier, cowboy, and traveling preacher, came to Nashville in 1896 and founded the Baptist Publishing Board to publish religious materials for the growing number of Baptist churches in the South. In 1904, he was one of the three original organizers of Once Cent Savings Bank.

The Baptist Publishing Board is now the largest African-American-owned publishing company in country, and T.B. Boyd, Richard Henry's great grandson, is its chief executive. One Cent Savings became Citizens, and the Boyds have continually owned and helped run the bank for four generations.

Mr. Boyd is every bit a part of this clan.

A doctor of divinity, he's a member of the board of First Union National Bank of Tennessee and was the 1990 March of Dimes Man of the Year in Tennessee. In 1987 his shiny gold cufflinks, double-breasted suits, diamond lapel pins, and diamond-encrusted Rolex watch won him the distinction of being named by a local newspaper as Nashville's best-dressed man . He also runs marathons.

But speak with Mr. Boyd and he will tell you about his family's humble beginnings.

"I used to go to the bank when I was a small boy with my daddy," he said. "They used to let me make my own little deposits. If I earned a dollar, I had to put at least 25 cents in the bank."

Mr. Boyd pulls listeners in with stories about his "granddaddy" and the bank's history. He claims that Citizens survived the run on the banks in 1929 by taking all the money out of the vault and stacking it in the bank's windows. Customers, who had lined up at the bank in panic, saw the stacks of bills and, thinking the vault was overflowing, returned home.

To understand how difficult it would be to lure a church out of the Citizens fold, consider the case of the Rev. James Thomas. Mr. Thomas started his preaching career in Texas as one of "Boyd's Babies," ministers who led the many Baptist congregations founded by Richard Henry Boyd in the late 1800s.

He moved to Nashville as a divinity student in 1964, and built the Jefferson Street Missionary Baptist Church-partly financed with a Citizens loan-in 1976.

"When I couldn't get a loan anywhere else, I knew where I could go," Mr. Thomas said. "When I look at Citizens Bank, I see family, I see me."

There are times when Citizens can't make a loan to one of its customers. It might be hard to tell a minister no, but Floyd Weeks, Citizens' senior vice president, precludes such situations by telling his clients when they are almost at their limit. When he turns someone down, he uses the situation as "a counseling session," telling his client what must to be done to get a loan from the bank in the future.

With a recent loan from Citizens, Mr. Thomas built a $1 million dormitory facility, which is leased to Tennessee State University.

On the other side of the dormitories is an undeveloped lot. Mr. Thomas looks at it longingly and says "I want this land," but quickly adds, "Floyd already told me I can't get any money for a while."

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