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Sparta-based ChoiceOne Bank plans to open a new full-service branch in downtown Grand Rapids near Founders Brewing Co. this year. The bank mostly serves rural areas, but first broke into the Grand Rapids market in 2016 with a lending office. Sparta-based ChoiceOne Bank plans to open a new full-service branch in downtown Grand Rapids near Founders Brewing Co. this year. The bank mostly serves rural areas, but first broke into the Grand Rapids market in 2016 with a lending office. Courtesy Photo

Community banks eye growth with stronger Grand Rapids presence

BY Sunday, January 07, 2018 12:40am

HUDSONVILLE — After assembling a team of veteran commercial lenders, West Michigan Community Bank is putting more focus on growing in the greater Grand Rapids area.

The hiring of Michael Skinner last spring as Grand Rapids market manager and the later addition of two other commercial lenders marks the first time the Hudsonville-based community bank has a group dedicated solely to the market. West Michigan Community Bank also plans to look at extending its branch network over the next several years in Kent County, said President Phil Koning.

The move to better target the Grand Rapids-area market represents “a natural progression for us” after carving out a wider presence in neighboring Ottawa County.

“We’ve really made a big commitment now and we’re there in a bigger way,” Koning said. “We are aggressively seeking to grow our franchise.”

The bank is among a growing number of financial institutions — including Sparta-based ChoiceOne Bank — that have announced plans to establish or grow their presence in downtown Grand Rapids in recent months. 

For an institution like West Michigan Community Bank, the market’s size plays a key role in those decisions. For example, the Kent County market is four times larger than the bank’s home market of Ottawa County in terms of deposits. 

West Michigan Community Bank has recorded strong growth of late, with its six offices in Ottawa County, plus a downtown Grand Rapids branch. 

As of Sept. 30, the bank had total assets of $432.1 million, an increase of more than 18 percent from a year earlier, according to a quarterly financial report filed with the FDIC. Total assets have grown nearly 80 percent since the end of 2014.

Deposits totaled $388.6 million at the end of the third quarter, up nearly 16 percent from the same period in 2016, and the bank recorded net income of $2 million for the first nine months of 2017.

West Michigan Community Bank entered the Grand Rapids-area market in 2014 and “tried to dip our toe in the water” with the opening of a downtown branch that was part of a “little less aggressive strategy,” Koning said. The bank got off to “a little bit of a slow start” in the market when a former branch manager became ill and eventually had to step down, he added.

The bank then recruited Skinner to lead commercial lending in Grand Rapids. Skinner previously served as chief lending officer at Muskegon-based Community Shores Bank and before that worked at the former Bank of Holland.

After securing a market leader, West Michigan Community subsequently hired Gary Palmitier, also formerly with the Bank of Holland, and Robert Klimczak, who previously worked at Grand Rapids-based Mercantile Bank, as vice presidents of commercial banking.

With a commercial lending team focused on the market and working to build a bigger book of business, the bank has begun considering expansion with a “limited number” of new branches, Koning said. The first new office in the Grand Rapids area could come within two years in southwest Kent County, he said. 

“I could see us some day with four to six branches in the Grand Rapids market. That will be quite a ways down the road, but absolutely we’ll build a franchise around downtown,” Koning said. “The long-term plan is a branch every other year or something like that.”

Given customers’ greater use of digital technology to complete transactions, any new branches the bank develops would use a smaller footprint, employ fewer people with deeper training, cost much less to operate, and “look very, very different than they have historically,” Koning said. 

Some 80 percent of customer visits to a bank branch today are for service and 20 percent are for transactions, he said.


West Michigan Community is one of two locally based community banks looking to spread deeper into the Grand Rapids area.

Sparta-based ChoiceOne Bank plans to open a branch on the south end of downtown Grand Rapids next year, near Founders Brewing Co. 

ChoiceOne Bank closed in mid December on the $1.1 million purchase of a building at 330 Market Ave. SW from Kantor & Wassink Properties LLC, according to city property records. The bank plans to renovate the site into a full-service branch that should open by late summer, said President and CEO Kelly Potes.

The bank, which primarily serves small rural markets, first ventured into downtown Grand Rapids in 2016 with the opening of a lending office to offer commercial loans to small businesses and residential mortgages. ChoiceOne’s plan to open the full-service downtown office comes after the lending office generated $40 million in loans since opening, a majority of them commercial credits, and exceeded expectations, Potes said.

“It’s going very well for us so now we want to expand,” he said.

Additionally, ChoiceOne recently added to its Grand Rapids staff with the hiring of Rodney Prahl, previously at Independent Bank, as vice president of commercial loans, and Aaron Griffin, who spent 10 years at Huntington Bank, as an assistant vice president and business development officer.

ChoiceOne has no current plans for additional locations besides the downtown office, although the bank may consider it in the future.

“As we see growth and maybe see we’d like to grow further in the county, there could be opportunity for another branch,” Potes said.

ChoiceOne Bank’s parent company, ChoiceOne Financial Services Inc., had total assets of $642 million as of Sept. 30. The corporation in October reported higher earnings of $1.7 million, or 50 cents per share, for the third quarter. Net income for the first nine months of the year totaled $4.8 million, or $1.39 per share, versus $4.4 million, or $1.28 per share, through three quarters of 2016. 

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