Kelly Potes took over in June as CEO at ChoiceOne Financial Services Inc., the parent company of ChoiceOne Bank, adding to his duties as president. During 2016, ChoiceOne Bank opened a lending office in downtown Grand Rapids and may follow up in the future with a full-service branch. The Sparta-based ChoiceOne has 12 offices in rural Kent, Ottawa, Muskegon and Newaygo counties with total assets of $598.6 million as of Sept. 30.
How’s business holding up as we close out 2016 and look ahead to the new year?
For the first three quarters of the year, it’s been very good for our bank. We had both loan and deposit growth over that time, and in the third quarter, we had record earnings. We’re seeing good loan demand, especially out of the Grand Rapids office we opened in March. It should be a solid year.
What are some of the issues that emerged this year that could continue in 2017?
Just the general increase in business. The recovery that we’ve had since 2009 has been steady, but it’s been slow. I think that is something that looks like it will continue, just kind of that slow growth. Grand Rapids and the Grand Rapids area is one of the more high-growth markets in Michigan and in the Midwest, and we would expect that to continue.
For your industry, do you expect to see changes in the regulatory environment with the new Trump administration?
At this point, it’s a wait-and-see approach. We’ll see as the president-elect picks the rest of his cabinet and who he may appoint to those regulatory posts if there’s a change. But I would say that the trend that we’ve been seeing is there’s a little bit more tiered regulation where community banks are sometimes not required to meet some of the same requirements as some of the larger banks — that would be those banks of $10 billion and over — because they get involved in a lot of different types of banking at that level that community banks don’t. There’s been a trend that way and we hope to see that continue.
If the president-elect were to call and ask for advice on how to make things better, what would you tell him?
I would say anything he can do to help working families. Lower taxes for working-class families and some help on the regulatory front would be good, especially for community banks.
How’s business lending changing in terms of what borrowers need moving into next year?
Very similar to what we’ve seen through 2016, it’s generally been throughout the economy. We’re seeing it in construction and expansion opportunities and in purchasing businesses. The industry’s looking for much of the same in ’17 and I think that’s what we’ll see going forward on the commercial side.
There are a lot of expectations that interest rates are going up next year. How will that affect your bank?
We feel as though it shouldn’t change things too much because we think they’ll be measured increases. If the Fed decides to raise rates, it will be because there’s strength in the economy to handle a rate increase. We don’t really think that should affect demand too much.
What’s your biggest opportunity in 2017?
To continue to grow in our markets that we serve, particularly the new office in Grand Rapids. There will be continued growth in that market.
What’s your biggest challenge?
The regulatory environment is one of the biggest challenges. Other than that, it’s staying ahead of and moving along with the technological improvements and some of the things that are coming out in the baking space. You have to try to anticipate what is going to be the next thing that our clients want. There’s a lot to choose from out there so you have to pick and choose to see what do you think will have the most impact and will be the most beneficial to our clients.
When we talk again in a year, what do you think you’ll be telling me?
We’ll still be wondering when the next rate increase will be.