Alma-based Commercial Bank sees an opportunity in Grand Rapids.
The bank is doubling its efforts with the opening of a small office in the CWD Building at 50 Louis St. NW in downtown and hopes to grow with the city as a community-focused bank — without leaving its rural markets in the dust, said Andy Shafley, executive vice president and chief credit officer.
“We’re still a community bank and committed to those markets,” Shafley said. “We’re going to do business here, too, but that allows us to remain in those communities and locally owned. All the communities in Michigan matter.”
With many smaller West Michigan community banks merging with larger ones over the past several years, Chelsey Foster, president and commercial loan officer at Commercial Bank in Hastings, said Commercial Bank sees an opportunity in Grand Rapids to fill a void in the market when it comes to smaller commercial loans.
He said with some community banks getting larger, conversations about $1 million loans are now “the same as a $10 million deal,” and the resulting paperwork is similar, too.
“Grand Rapids, from a community bank standpoint, has changed a lot in the past two years, and we want to grow relationships and be a member of the community,” Foster said.
He said Commercial Bank’s products help provide clients with security through the life of a deal, and they don’t “balloon after five years.” The bank offers a commercial mortgage with a fixed rate for the first several years.
Commercial Bank can work internally with deals up to approximately $3.1 million, generally with working professionals in owner-occupied buildings, small office buildings and small manufacturers, said Josh Gibbs, Commercial Bank’s Greenville community president.
“We write a contract for the life of the deal,” he said. “We’re not forcing our customers to shop around or get caught in a bad situation. We want to set them up for success.”
Without ballooning portfolios that require bankers to refocus on deals every few years, loan officers can focus on finding new customers and can help existing customers grow rather than figure out how to repay their loans, Shafley said.
Commercial Bank has been on the American Bankers Association list of Top 200 Community Banks annually for more than a decade, including being listed in the top 10 during the Great Recession.
“We catapulted to the top because so many banks had losses and we just kept going,” Shafley said. “We’ve drifted back in the pack because it’s more about consistency for us — not make hay for one or two years and lose a bunch of money a few years later.”
Part of that consistency for Commercial Bank is its commitment to the communities it’s always served, said Shafley, who was out signing a loan on a farm near Alma recently. The commitment is pushed by the bank’s realization that the interest rate is only part of the package, and customers want face-to-face interaction in an ongoing relationship with their banker.
Small loan amounts, even as low as $200,000, are important to Commercial Bank since those deals could grow larger and also encourage other clients to use the bank. Gibbs said being able to take a phone call and help a client at any time is important to him, and the bank’s relative small size enables loan agents to get back to potential clients quickly compared to larger corporate banks.
Commercial Bank has only had a physical presence in Grand Rapids for about two months, but the current growth encourages the bank to envision its role in the community 20 years from now.
“We’ve enjoyed some success down here, and it makes sense for us to come down here,” Gibbs said.
“With Grand Rapids’ growth, it’s a good opportunity for us to share in the success together.”