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Sunday, 05 July 2015 22:00

West Michigan Community Bank to expand biz lending after capital infusion, key hires

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Phil Koning, president and CEO of West Michigan Community Bank. Phil Koning, president and CEO of West Michigan Community Bank. MIBIZ FILE PHOTO: MARK SANCHEZ

HUDSONVILLE — Backed by a $15 million capital infusion from its owners and a newly expanded commercial lending team, West Michigan Community Bank aims to further grow market share after doubling in size in four years.

The primary growth target right now for the Hudsonville-based West Michigan Community Bank is the Holland-area market. In Holland, the bank has a single downtown location that opened in 2012, but it began construction in June on a $1.1 million northside branch. It also plans to add an office on the south side of town in 2016, President and CEO Phil Koning told MiBiz.

The bank targeted Holland for branch expansion and growth because the market holds greater potential for small community banks such as West Michigan Community, as opposed to the Grand Rapids market where competition is much more intense.

“You don’t run into the big banks. You’re competing more against the regionals and the other community banks,” Koning said. “Where if you go to Grand Rapids, you’re competing against everybody.”

Completion on the new northside office on Douglas Avenue in Holland Township is targeted for early October. Once the Holland-area branch network gets built out next year with the planned southside office, “then we’ll probably turn our attention toward Grand Rapids or up and down the lakeshore,” Koning said.

“We’ll be patient but opportunistic,” he said.

West Michigan Community Bank is privately held by Bad Axe-area owners who just upped their investment with additional capital. The bank has five offices in Ottawa County — two in Hudsonville, and one each in Holland, Jenison and Zeeland — plus a location in downtown Grand Rapids.

The bank had assets of $244.2 million at the end of the first quarter, according to a quarterly financial report filed with federal regulators, and recently surpassed $250 million. Deposits as of March 31 totaled $216.7 million.

Part of the bank’s growth strategy is putting an even greater emphasis on commercial lending to small and mid-sized businesses.

To that end, West Michigan Community Bank last month hired four commercial lenders from The Bank of Holland following its merger with Chemical Financial Corp. The team includes Jim Bishop, a long-time commercial lender with The Bank of Holland who is now West Michigan Community’s senior vice president and lakeshore market manager.

The bank was already looking to grow commercial lending and the availability of talent out of The Bank of Holland sale provided an opportunity that “was just too good to pass up,” Koning said.

“We had a desire to grow, but this was opportunistic and did provide the vehicle,” he said.

Commercial lending now accounts for about 85 percent of the bank’s lending portfolio. Koning believes it’s an area that still represents a good opportunity for growth. The bank typically lends to small and medium-sized businesses that need loans ranging from $100,000 to $5 million.

“One of the only markets left where we can really thrive and show value is in the commercial lending area,” Koning said. “It’s probably where community banks today can be most effective and most successful.”

In addition to the four commercial lenders, West Michigan Community Bank hired two residential mortgage officers and two support staffers who were previously with The Bank of Holland.

Gregg Dimkoff, a finance professor at Grand Valley State University’s Seidman College of Business who follows the local banking scene, calls the hirings significant, especially given the size of West Michigan Community Bank.

The movement of talent to another bank following a merger is a common occurrence in the industry, often because of the resulting uncertainty or because a person gets a signal that things are going to change in a way that’s not to his or her liking, Dimkoff said.

Once one key person moves and he is in a position to hire additional staff, he typically looks to his former employer for people he trusts.

“You hire who you know,” Dimkoff said. “So one defection can lead to more.”


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