Published in Finance
Michael Hollander Michael Hollander Courtesy photo

A year in, Commerce Bank pursues additional growth via GR office

BY Saturday, September 15, 2018 09:35pm

Bank focuses on middlemarket clients

In the 12-month period from June 2017 to June 2018, Commerce Bank’s outstanding commercial loan balances in West Michigan grew by 100 percent.

The growth came in the Kansas City, Mo.-based bank’s second year in the market, which it entered in May 2016 with the opening of a commercial lending office in downtown Grand Rapids.

Now housed in new and larger quarters on the 12th story of the downtown Waters Building, Commerce Bank plans to pursue more growth across West Michigan after establishing a foothold in the market and operating ahead of plan “on all accounts.”

“We’re seeing some pretty significant fruits of our labor,” said Michael Hollander, senior vice president and Commerce Bank’s Michigan market leader.

“We’re solidly profitable and sustainably profitable (in Grand Rapids), so we decided to enter the next phase of growth because of that,” he said. “We want to be here for the long haul.”

That next phase includes building up staffing at the three-person office, such as the hiring this summer of Vice President Dan VandenBosch, who previously worked at Huntington Bank.

Commerce Bank will look to grow its book of business in the market for commercial lending and business banking through acquiring talent and driving organic growth. The bank could potentially pursue acquisitions “if the right fit were to come along that would be supportive of our primary objective of growing in a quality manner,” Hollander said.

The bank eventually intends to offer a full spectrum of business banking services out of the Grand Rapids office to serve “all of our clients’ needs,” such as commercial lending, equipment financing, and systems for accounts payable, Hollander said.

“We want all of our client-facing positions to be local over time,” he said.

The Grand Rapids office serves as Commerce Bank’s single location in Michigan and generally targets middle-market business with annual revenues of $10 million to $500 million. How fast the bank grows in West Michigan and deploys additional commercial banking services hinges on market and client demands, Hollander said.

“We’re going to let the community and the customers drive where we go next,” he said. “We’re not just going to build it just to build it. Really, it’s going to come down to client demand.”

Commerce Bank has 172 full-service bank branches in Missouri, Kansas, Illinois, Oklahoma, and Colorado. It operates commercial banking offices in Dallas and Houston, Texas; Nashville, Tenn.; Cincinnati, Ohio; Des Moines, Iowa; Indianapolis, Ind.; and Grand Rapids.

Parent corporation Commerce Bancshares Inc., which is publicly traded but closely held by the Kemper family in Missouri, had $24.5 billion in total assets as of June 30 and $20.3 billion in deposits. Commerce Bancshares (Nasdaq: CBSH) in July reported $108 million in second quarter net income and $206.8 million for the first six months of 2018.

As Commerce Bank entered the West Michigan market, it sought to carve out a position in the middle market for its business banking arm where it could best compete, rather than take a broad-based approach and face more competition, Hollander said.

“At a time when it’s ultra-competitive, you have to sharpen your arrow,” he said. “It has caused us to have to sharpen our focus on where we can differentiate.”

Commerce Bank’s future in West Michigan could include an acquisition to drive growth and establishing a retail branch network in the market, Hollander said. The bank in the past — in Denver in 2007 and Oklahoma in 2013 — followed up commercial banking offices with the subsequent acquisition of a local bank.

“We’re always willing to listen to opportunities that would be the right fit for us and the markets we serve,” Hollander said. “Our goal is to make sure the demand is there and it’s something the clients need.”

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