Groothuis Prefers Community Banking

October 21, 2002
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GRAND HAVEN — In an industry where “high ouch” has become the mantra alongside “high tech,” John Groothuis has found that smaller is better.
Community banking, with its high level of personal customer service and attention, is the style he prefers. That’s why he went to work in late 1994 as president and chief executive officer for the fledgling Grand Haven Bank, a unit of a Lansing-based corporation that develops and owns autonomous, locally controlled community banks.

“I felt the system here would work,” said the 37-year-old Groothuis, a former commercial lender whose career includes stints at the former First of America Corp. and FMB Corp.

“I felt Grand Haven was ready for a community bank,” he said. “I just like the small-town community bank and the way it functions.”

Under Groothuis’ leadership, Grand Haven Bank has gone from its origins as a branch office of sister bank Paragon Bank & Trust in Holland to a highly successful and growing community bank that serves retail and mid-sized commercial customers, and has more than $120 million in assets, $110 million in loans and $100 million in deposits.

This year, Groothuis said, is shaping up as a “record year” for earnings.

“We just tried to take a very common sense approach to banking and make things work for people, because they have a lot of alternatives out there,” Groothuis said.

But things weren’t always going so well for Grand Haven Bank, which was formed in early 1995 when Capitol Bancorp acquired Paragon Bank & Trust. The corporation decided to make Paragon’s Grand Haven office a separate bank, with a local board of directors and local decision-making powers.

The early months, Groothuis recalls, were not easy for the new bank and its staff of three employees.

“We were the new kid in town,” he said. “We would literally go days when the phones would not ring and the doors would not open.”

So Groothuis and his staff “began knocking on doors,” making cold calls on potential customers to generate business. The bank’s directors, consisting of several local successful businessmen, also stepped up to try to steer business its way, Groothuis said.

After about two years, the bank had positioned itself from having to actively solicit customers to where business “started coming in,” he said.

The difficult period reinforced to Groothuis the importance of the one-on-one relationship between the bank and its commercial and retail customers in the community. It also gave him a far greater appreciation for the small business owner or entrepreneur who comes to the bank with a business plan and a dream, seeking the capital he or she needs to pursue it, as well as the need to be there for customers through the good times and bad.

“We can relate a little easier,” Groothuis said. “Most small businesses are going to go through hard times, and as a bank you can’t be hot and cold. You have to be consistent.”

Groothuis began his banking career after graduating from Grand Valley State University in 1988 with a degree in finance. He joined the former FMB Corp. as assistant vice president of commercial lending.

Four years later, he moved over to the former First of America in Holland as a commercial lender.

In late 1994, then-Paragon Bank CEO Scott Kling approached him about joining Paragon as a commercial lender. Groothuis wasn’t interested in changing jobs at the time. Groothuis and Kling knew each other from their past positions at FMB and served together on the board of a former nonprofit housing agency in Holland.

A few months later, Kling called again with another opportunity: Was Groothuis interested in becoming president of Capitol’s new bank in Grand Haven?

“I didn’t think I stood much of a chance of getting it, but here we are,” Groothuis said. “It worked out.”

Looking ahead, Groothuis sees plenty more challenges for Grand Haven Bank, including growing its deposit base in an increasingly competitive market and a need to extend its service area.

The key to growing, he said, is maintaining the high level of service that customers have to come expect and demand.

“As you look for growth you don’t want to forget the customer base you have. They’re the ones that have gotten you where you’re at,” Groothuis said.    

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