GRAND RAPIDS — The recently announced leadership transition at Mercantile Bank Corp. has been in the works for years and should provide continuity going from one CEO to another, executives say.
Between now and Jan. 1, Chairman, President and CEO Mike Price and Robert Kaminski Jr., the current executive vice president and COO for the corporate parent company, will steadily transition duties. Kaminski also currently serves as CEO of the Mercantile Bank business.
Putting a succession plan in place well in advance and publicly announcing his retirement six months before he steps down as corporate president and CEO assures a smooth transition of leadership, Price said. The transition won’t bring any changes in direction and strategy, or for internal operations.
“The main mission of the bank, I don’t think anyone’s going to hold their breath and go, ‘There’s a new CEO in town, and he’s going to totally flip things up in the air,’” Price told MiBiz. “If anybody understands the culture and mission of the bank as well as me, it certainly would be Bob.”
Price and Kaminski were among a group of banking executives who formed Mercantile Bank in 1997. The two have worked together for 32 years, which should also aid in a smooth transition and continuity for employees, clients and investors as the corporation changes leadership, sources said.
That continuity is important in an industry where clients and investors like consistency.
“People want to know what to expect and what they can count on,” said Kaminski, who’s been CEO of the bank since May 2015, on top of his corporate duties.
“From the customers’ standpoint and from the investors’ standpoint, they don’t want to see a lot of change,” he said. “Each person does things a little differently over the course of time. There are things that I may do that might be a little bit different than what Mike may have done, and that’s because people are different. But overall, we’re trying to emphasize the stability and continuity.”
Price, who became corporate CEO nine years ago when founding Chairman and CEO Gerald Johnson retired, will remain an executive officer and continue on as a member of the board of directors. He will retain the role of chairman until May 2018.
Mercantile Bank announced the executive transition a few weeks ago when releasing results for the second quarter. Brokerage analysts at Keefe, Bruyette & Woods Inc. who follow Mercantile Bank (Nasdaq: MBWM) indicated in a memo to investors that they expect no changes.
“While not necessarily an expected announcement, we expect this planned transition to be relatively seamless given Mr. Kaminski’s 30-plus years of community banking experience and extensive work as an executive at Mercantile,” they wrote.
Kaminksi moves into the role of CEO two years after Mercantile Bank’s $151.5 million merger with the former Firstbank Corp. doubled its assets, making Mercantile the third largest bank domiciled in Michigan.
As of June 30, Mercantile Bank had 48 offices in Western and Central Michigan with $2.99 billion in assets.
The corporation in July reported second quarter net income of $7.4 million, or 46 cents per share, which compares to $6.6 million, or 39 cents per share, a year earlier. Midyear net income totaled $16 million, or 98 cents per share, which compares to $13.2 million, or 78 cents per share, last year.
Brokerage analysts expect earnings for all of 2016 to grow to $1.91 per share, versus $1.62 per share in 2015, the first full year following the Firstbank merger, according to a consensus estimate at Yahoo Finance. Analysts expect earnings for 2017 to reach $1.93 per share.
“We’re kind of hitting on all cylinders right now and we’re doing very well, and we’ll keep that going for the rest of 2016 and beyond,” Kaminski said. “We have a lot of neat things on the horizon that we’re working on and are obviously continuing to reap the benefit of the merger that we conducted a couple years ago. That’s gone very well and we have a chance to really make some good impact in the market that we serve.”
One goal going forward is increasing the bank’s retail lending presence in the Grand Rapids area, a service line “Mercantile hasn’t been focused on” as it operated primarily as a commercial bank, Kaminski noted.
During the latter half of 2016, Kaminski will gradually assume duties from Price. That includes getting to know investors better. Price and Kaminski, along with CFO Chuck Christmas, were scheduled to begin meeting last week with institutional shareholders in Mercantile Bank, as well as other potential investors.
Price decided to retire at the end of 2016 and initiate the leadership transition because he has “a few things that have been on my bucket list” personally. Additionally, Kaminski “was ready” to move into the top executive role, he said.
“I’ve been running this place for 19 years, really, and it’s healthy for corporations to have a change every once in awhile, and 19 years is a long while,” he said. “Bob’s ready for it, the organization’s ready for it, and it’s in a great position.”
Given its “pristine” asset quality and good financial performance currently, Mercantile Bank’s strong recovery from the difficulties and losses of the Great Recession contributed to Price’s decision to retire now.
“The numbers look fantastic,” he said. “From my perspective, it’s as good as it’s ever been.”