Banker knows the value of character

JOHN SCHMITZ For the Capital Press Citizens Bank president and CEO Bill Humphreys, Jr. will be at the Expo to talk to visitors about farm loans.

Mid-size bank devotes 20 percent of portfolio to ag


For the Capital Press

CORVALLIS, Ore. -- You won't find any shiny new equipment in the Citizens Bank booth at the Willamette Valley Ag Expo.

But you will find out how you can round up the money to buy that new tractor or additional land.

Farmers who possess the three C's -- good character, the capacity to repay the loan and sufficient collateral -- stand a better chance of acquiring loans, said Bill Humphreys Sr., president and CEO of Citizens Bank.

What's more, he added, Citizens loan officers will often attach a greater amount of importance to the first "C."

They recognize that farming is not just a business but a way of life, Humphreys said, and for that reason they put a lot of stock in a loan applicant who is committed to the life and takes pride in his or her profession.

"They tend to follow through at a higher level than most business people," Humphreys said.

Citizens Bank was founded in 1957 in Corvallis and is still based there. It is a community bank with 14 offices in smaller cities throughout the Willamette Valley. A mid-size bank, Citizens Bank has around $420 million in assets, $310 million of that out on loans.

About 20 percent of Citizen Bank's loan portfolio is devoted to agriculture, "with all kinds of farm financial help, operating lines of credit, equipment and land financing," Humphreys said.

Even though many of the ag sectors Citizens Bank does business with, such as the grass seed growers, are down, the bank "is pretty optimistic," Humphreys said.

"The farmers we have funded have the financial strength -- the margins -- to weather a year or two of poor sales. They've had a number of years of strong sales, and what they've done is build capital. ... And like the bank, we feel we're in good shape."

Humphreys said that unlike other customers, farmers don't move banks very often. "We don't look at a lot of new deals, and I don't think a lot of deals move from bank to bank."

He added that because most ag operations require a substantial amount of start-up capital, he hasn't seen many new ventures coming though Citizens Bank. Because of FDIC restrictions on lending limits, Citizens Bank "can only handle a certain size, which is 15 percent of our capital and surplus, so right now we would be comfortable with loans up to around $7.5 million," Humphreys said.

Any more than that would be referred to a larger bank with a larger capital base.

Citizens Bank recently purchased part of the defunct Silver Falls Bank, which was based in Silverton and was a victim of the financial crisis. "We purchased (two of the bank's offices) from FDIC -- Silverton and Oregon City. That's worked out really well for us."

Humphreys said the two acquisitions represent "a whole new type of business for us because the crops that are grown north of Salem are quite different than those grown" to the south and east of Corvallis.

Subsequently, the bank intends on making more capital available to high-value crops, such as berries, hazelnuts, Christmas trees and winegrapes.

Citizens Bank employs eight loan officers who specialize in ag and either grew up on farms or are familiar with agriculture.

Farmers or ranchers interested in securing loans should first contact the bank, introduce themselves and describe the kind of financial backing they need, Humphreys said.

"What we do is put together a team of people who can provide expertise, to sit down with the (applicant) and develop a business plan. In many cases, professionals from outside the bank, such as Farm Credit Services and nearby Oregon State University, are called into the picture by Citizens."

Freelance writer John Schmitz is based in Salem, Ore. E-mail:

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