CNB Bancshares' Kentucky bank has formed a leasing subsidiary and hired a Banc One executive to run it.
It's the first leasing venture for any unit of the Evansville, Ind., banking company.
Citizens Banc Leasing Inc. will provide commercial equipment leasing and financing for machine tools, telecommunications systems and construction, medical and computer equipment.
Some of the nation's largest banks, including BankAmerica and NationsBank, have recently enlarged their leasing subsidiaries, which have higher-yielding assets than banks. But small banks are also getting into the business, to bolster their offerings for small and middle-market commercial customers.
"Banks want to provide a broader array of services so their customers don't have to look elsewhere," said Joseph Stieven, an analyst for Stifel Nicolaus.
Dwight Nestrick, president and chief executive of $611 million-asset Citizens Bank of Kentucky, said his goal was "to raise opportunities with commercial customers and broaden the number of commercial customers."
The company will conduct leasing transactions in Ohio, Tennessee, Georgia, and Florida, and will focus on developing new business in the three states with CNB banking offices, Mr. Nestrick said.
"We're not in it just for the relationships," he said."We want to add customers in the bank's core market."
Citizens, based in Madisonville, hired David Ozbun as president of the new division. He had worked for Banc One Kentucky Leasing and, earlier, Liberty National Leasing.
Citizens Banc Leasing, which has three employees, hopes to attract middle-market customers to generate $30 million in sales in its first year, Mr. Ozbun said. "In addition to serving the bank customers, there are opportunities for us throughout the region," he said.
CNB Bancshares has $3.9 billion of assets and six subsidiary banks with offices in Kentucky, Indiana, and Illinois. It also operates 34 consumer finance offices in Kentucky and Tennessee under the name Peoples Security Finance Co. and sells property and casualty insurance through its agency Citizens Insurance of Evansville.
