Too Big To Care?
Citizens State Bank’s grand opening photo for their Royal Oak location.
Newest Chaldean-owned bank looks out for the little guy.
By Cal Abbo
“I am very proud to be the owner of Citizens State Bank and possibly the only Chaldean bank owner in the country. The values of my community are emulated in the values of the bank: extraordinary customer service, hard work, sense of urgency, relationship-focused, entrepreneurship, and solution-oriented. Our culture is reflected around hospitality and our team will treat every customer as if they are an owner of the bank. I am proud of my Chaldean heritage, and I couldn’t be more excited to bring those values to the banking community.”
In 2006, the Bank of Michigan raised $8 million and opened its doors as the first Chaldean-owned bank in the US. Even then, Capitol Bancorp held 51% of its shares, but Chaldeans were elated at the idea of a community-operated bank. When it began, the Bank of Michigan had 180 local investors, most of whom were Chaldean.
The Bank of Michigan was in operation fewer than ten years. Level One Bank, a small, local bank that opened in 2006, bought the Bank of Michigan and turned it into one of its branches. Last month, Level One announced that it will merge with First Merchants Bank following a $323 million deal.
This exact trend inspired Chris Yatooma to purchase Citizens State Bank, a community bank located in the upper peninsula, in June 2020. CSB, which has operated in Ontonagon since its inception in 1910, opened its new headquarters in Royal Oak on October 4. When Yatooma made the purchase, CSB became the first Chaldean-owned operation since Level One acquired the Bank of Michigan.
“Small banks get bought out by medium banks and medium banks get bought out by large banks,” said Yatooma, the purchaser and director of CSB. “Every time a bank disappears, the different services and products they offer for small business owners, specifically the Chaldean community, seem to disappear with it.”
At the end of 2020, the United States had 4,370 FDIC-insured banks, less than half the number of FDIC-insured banks in operation in the 1990s. Over the last 30 years, larger banks purchased or merged with thousands of smaller, community-level banks.
In addition, new banks opened at an extraordinarily slow pace in the last decade. From 2000-2009, an average of 126 new banks opened per year. Only 32 new banks opened in the ten years after. In Michigan, fewer than 10 banks have under $100 million in assets, down from 70 just ten years ago. This spells a problem for small business owners who rely on the compassionate understanding and exceptional customer service of small banks.
Among others, Yatooma saw a lot of potential in the cannabis industry. The lack of readily available cannabis banking services has been a perpetual issue in the fast-growing startup industry. Retail cannabis sales grew from $420 million in 2019 to $989 million in 2020. This year, sales surpassed $1 billion by August.
In September, cannabis industry leaders told the Chaldean News that financing for new business owners was extremely difficult to come by, as almost all medium and large banks refuse to service cannabis businesses, and a legitimate and legal grow and retail operation can cost entrepreneurs millions of dollars just to get started.
Yatooma saw this exact need when he decided to purchase a bank. The market is ripe for a nimble and versatile community bank, he said, one that does business with people, not just numbers.
CSB did not come ready-made when Yatooma bought it. The private bank serviced much of its local area, but it couldn’t grow because of the small population. In 2010, Ontonagon, which Yatooma likes to call “the financial capital of Michigan,” had fewer than 1,500 residents.
As a small bank, its infrastructure, processes, and products needed improving. After he completed the purchase, Yatooma made a handful of upgrades that boosted the bank’s productivity, modernized its product suite, and brought its technology into the 21st century.
One key change was hiring Dan Fischer as CEO. Fischer brings a formidable resume – in the past, he was the senior vice president at Fifth Third Bank and the executive vice president at Associated Banc-Corp – and boasts vast experience reviving and expanding smaller banks. Most recently, he spearheaded a successful effort to recapitalize and sell a failing Ohio-based private bank. CSB is already the third community bank where Fischer will be CEO.
CSB has already done a lot for people who have been let down by large banks. One customer, a single mother purchasing a new home, had her loan from a corporate bank turned down on closing day. “They called us in a panic,” Fischer said. He worked on the deal, approved the loan in under two hours, and closed it the following week. “Here’s a single mom with a mover schedule, boxes packed, who has already sold her house, and she’s told she isn’t getting a loan now,” he added. “Where is she going to go?”
Before making eight-figure deals with banks, like a true entrepreneur, Yatooma started a landscaping business at 16 years old in addition to working at his family’s party store. His father, born in Iraq, came to the United States in 1949 at the age of two but died suddenly when Yatooma was only 11 years old.
Yatooma inherited his father’s grit and business acumen. “My dad was very active and we would talk about business a lot,” he said. “I remember finding spider bites on his legs from sleeping at the store sometimes.”
When Yatooma turned 18, he got into real estate, buying homes and renting them out. He attended his first year of college at Taylor University, a small liberal arts college in Indiana about 200 miles from Detroit. Yatooma came home every Thursday to work weekends and eventually moved back home to work full time.
He never graduated college, but soon after leaving school, Yatooma got into larger real estate opportunities like apartments. “My thought at the time was the top five richest people in the world didn’t graduate college,” he said. “I’m happy to be one of the five. I don’t need a college degree too.” With the purchase of CSB, he’s well on his way.
Yatooma’s life embodies what it means to be Chaldean: a fulfilling combination of family, business, and community. He adds to those humility and grace, especially when it comes to your personal finances. “We’ve got to earn your business. That’s a personal philosophy of mine,” he said. “I don’t deserve your business because I’m Chaldean. Honestly, I don’t believe that. We have to work to earn your business.”
“I’ll tell Chaldeans, our community is very hardworking. We’re very customer-service oriented and we really appreciate our customers. That’s something that’s usually lost in the marketplace,” Yatooma said. “We share the same values, the Chaldean community and the culture I grew up in and understand, and we’re trying to emulate that in the bank.”