A diverse small business community is leading the growth for First Community Bank in Grand Rapids.
The fifth-generation, family-owned Harbor Springs-based bank has had a presence in Grand Rapids since the 1990s, but is strengthening its efforts to grow its commercial loan portfolio in Grand Rapids.
First Community Bank officially entered the Grand Rapids market when it merged with Select Bank in 2012 and took over its home at the 13-story 60 Monroe Center building, which was built in 1913 as the Grand Rapids Savings Bank. The original vault still is part of the building, but it is unused.
Select Bank was opened by Harbor Springs Financial Corp., also the holding company of First Community Bank, in Grand Rapids in 1996.
The desire to grow a family-owned bank — owned by the Clarke family in Harbor Springs — in a market flush with corporate banks is an unusual asset in the modern world, said Mark Brant, First Community Bank Grand Rapids president.
“Growth is a good thing, but what’s happened over the years is a lot of family-owned banks have sold to big names in the market because they chose not to compete,” Brant said. “They get a nice return and move on. The fact that the fifth generation of the Clarke family wants to grow the bank, that’s positive. It’s very much the mission and strategic plan to keep growing the bank.
“We’ve purposefully put resources to grow Grand Rapids. We think it’s an important market.”
Brant said the loans aren’t fueled by a desire to provide shareholders a return on investment, because there are no shareholders.
“We think a family-owned bank matches up nicely with family-owned business,” he said. “Our philosophy is if we take really good care of our clients, they’ll take care of our bottom line.”
First Community Bank has wide branch coverage in northern Michigan, with locations in Harbor Springs, Cheboygan, Traverse City and Petoskey, but there’s a limited range of businesses to grow its commercial portfolio.
Northern Michigan towns are ripe with service-oriented businesses, such as lodging and dining, but aren’t driven by diverse industries with businesses looking to grow.
“The market here is much bigger,” Brant said. “There’s a lot more here in terms of different types of businesses, much broader in manufacturing and distributors, along with a lot more growth relative to what the businesses want to do.”
As a long-time family-owned bank, Brant said the ideal customers for the commercial loans also are family-owned small businesses. First Community Bank largely likes to work with businesses with revenues between $1 million and $15 million.
The revenue range offers First Community Bank the ability to provide the credit those businesses will need to succeed, Brant said, as the bank thrives in loan amounts from $500,000 up to a few million. Beyond $10 million, Brant said the larger financial institutions in town might be a better bet.
The loans also are easier to structure and approve as they are done in-house in Grand Rapids and stacks of financial paperwork don’t have to be sent to out-of-town headquarters to be looked over. Instead, the bank’s three Grand Rapids lenders and Brant can spend time with the small business owners and learn the ins and outs of what makes the company work.
“We can respond quickly to the business owner and give them what they want,” Brant said. “We work closely with the owners to understand their experience and vision and figure out how to support them. We look at the person and see what we can do to make it work.”
The smaller customers and loan sizes provide First Community Bank to offer a family-like customer service, Brant said.
“We stick to what we do best,” he said. “That’s serving those small business clients, and because we don’t do so many different things, it’s a lot more focused. We get to know those people well and our service team gets to know them well.
“We like to know our customers personally.”
First Community Bank also offers consumer-focused services out of the branch downtown, but the focus isn’t as large as it is up north. Brant said the bank has reached out to multiple recently completed apartment developments to offer incentives for residents to sign up for accounts, but it also understands it lacks the convenience of other banks in the community for consumers.
For future growth in Grand Rapids, more branches could be in the plans.
“We think we have a good physical presence right now,” Brant said. “We’ll look beyond that and maybe look to have more coverage, but the main focus is on the lending team and making sure they have what they need to get out and work with the business owners.
“As we continue to grow the market, we’ll look at other ways to serve it.”