Stevens Remains Constant

June 5, 2002
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GRAND RAPIDS — It’s time to review a bit of local bank merger history.

Michigan National Bank, a seemingly permanent local institution, was acquired two years ago by National Australia Bank which, in turn, folded into ABN AMRO North America, which, come October, will become finally amalgamated with Chicago’s LaSalle Bank with its own new local presence into Standard Federal Bank.

But some things don’t change.

Tom Stevens, for instance.

Last September, the commercial banking veteran of Michigan National was appointed to the new corporate post of senior credit officer for the firm’s west and southwest regions.

The appointment made him responsible for overall loan approval and credit administration in the two regions.

With the AMRO acquisition, his venue was expanded to include the central region. In West Michigan alone, this means he is responsible for roughly $2 billion in commercial loans to small, mid-sized and larger businesses.

That number likely will rise because, as Stevens points out, Standard Federal will be Michigan’s second-largest bank. Technically, the merger is all but complete.

The final juncture will occur in October when all of the bank’s 300 offices and 800 ATMs and $35 billion in assets are operating with the same computer system.

But the firm’s commercial loan base should be growing because the prime rate is dropping.

Not that repeated cuts in the prime rate have meant market acceleration in borrowing, Stevens said.

“The effect of changes in the prime rate is never immediate,” he said. “Whether it’s an increase or a decrease, a change in the rate usually takes six months to have an impact because our economy is so complex and has so many synergies.

“I think we’re just now starting to see the effects of that first prime rate cut back at the first of the year.”

From his perspective, he said, the initial interest rate cut hasn’t generated a big upsurge in the economy.

But what has been just as important as the interest rate cuts, he feels, has been the reassurance the business world has taken in the Federal Reserve’s obvious close attention to economic condition. “One of the other tools that the Fed has is that its action does a couple of things. It cuts the cost of money and it sends a message. It’s saying, ‘Don’t panic.’

“And I think it’s important that the business environment is devoid of any panic,” he added. “What we see are owners taking a close look at things and positioning their businesses to take advantage of an upturn if it comes, but also being prepared in case further challenges come along.”

He said one should bear in mind that the Federal Reserve recognized early in the year that the economy was sluggish. “It was moving at perhaps 1 percent in the first quarter of the year, and the Fed was aiming for a 3 percent rate of growth by the last quarter.”

Stevens is making no predictions about whether the economy’s landing will be hard or soft. But with almost 30 years in the industry and nearly a quarter century in commercial lending, he has been through business cycles and the time of stagnation. And he sounds relaxed.

In fact, he had a response to a recent Wall Street Journal commentary that said the Fed’s deliberation in cutting rates is keeping the economy slow by encouraging borrowers to keep waiting for a lower rate.

“Don’t wait too long,” he said. “Many times people wait for rock-bottom rates and they make a mistake,” he said. “They saw the rates at 9 percent and now they’re at 6 ¾ and they’re waiting for it to get down to 4 ¾.”

What often happens, he said, is that the rates never reach whatever the rock bottom is supposed to be. “It kind of reminds me of the old saying about the stock market,” he said, chuckling. “Bulls and bears run away, but hogs always get slaughtered.”

He said he’s excited about the merger and his place in it because Standard’s Troy headquarters recognizes the strength of the West Michigan economy and is leaving a good deal of decision-making power here in Grand Rapids.

This focus, he said, will improve the bank’s ability to deliver products and services to small and middle-market businesses.

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