National City ‘Blitzes’ Michigan

August 22, 2003
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GRAND RAPIDS — In teams of two, National City small business banking officers, branch managers and executives blanketed Michigan Wednesday, paying personal visits to small business owners across the state.

The “Small Business Super Blitz” targeted 1,500 small businesses singled out by National City banking officers as prospective clients.

The goal? To win business customers from competing banks by delivering information about National City products and services directly — up close and personal — to potential new clients.

All National City business lines were represented among those making contacts last week — such as Corporate Banking, Private Client Group, Private Investment Advisors, Armada Funds, Treasury Management and National City Card Services, among others.

“We wanted to show the marketplace the breadth and depth of our team,” said William E. MacDonald III, vice chairman and member of the Office of the Chairman of National City Corp.

The company conducted a similar one-day blitz in western Pennsylvania two months ago and is planning to do the same in all the states in which it does business.

The new business generated by the Pennsylvania blitz was equivalent to the business generated by a de novo bank in its first couple of years, MacDonald said.

“In the first three to five years with a de novo branch, you’re probably looking to get $20 million, or something like that, in deposits, so that shows you the impact of this thing,” MacDonald said. “What we want to show is that we are committed to small business in all of our markets.”

The company began planning the Michigan blitz months ago, noted Sean Welsh, regional president for Grand Rapids, Holland and Muskegon. The blitz included a three-question, economic mini-survey designed to connect with all 1,500 businesses targeted:

  • Do you think the economy will be getting better or worse in the next six months?

  • Will your business be expanding in the next six months?

  • Do you plan to hire additional staff in the next six months?

Survey results, MacDonald said, will help National City get a sense of whether or not the economy is coming back and will serve as an indicator of how much better 2004 might be.

National City, headquartered in Cleveland, Ohio, is the fifth largest small business lender in the nation and leading Small Business Administration (SBA) lender in its six-state footprint that includes Ohio, Pennsylvania, Indiana, Kentucky and Illinois, in addition to Michigan.

It also has been the top SBA lender in Michigan for two years running, with 213 SBA loans totaling $25.5 million in fiscal 2002.

Historically, National City has always been a very strong middle-market and lower-middle market small business lender, MacDonald said. But the bank has been increasing its focus on small business in the past few years.

“We want to be No. 1. That is the objective,” MacDonald emphasized. “Across our whole footprint in the Midwest, the volume of small business lending is growing for us. Basically, our growth in all loans (consumer and business) is coming from getting new customers from other banks right now. We’re not seeing utilization from our existing customers on their credit lines.”

Douglas Morgenstern, senior vice president and area manager for small business banking, pointed out that in June, Michigan had the largest number of loans of any division across the company.

National City’s business model is a local delivery model, with local product managers and local decision-making, Welsh noted.

“Whether it’s the life sciences initiative or low income housing tax credits, we really are the leader in innovation and in activity in finding ways to make those projects work,” he said.

“To be a leader in small business lending goes hand in glove with investing in our local economy. This is a market that respects commitment over a long period of time and we’ve been showing that here.”

MacDonald said it’s clear more consolidation in the financial services industry is ahead. There are still too many banks chasing too few customers and too little business, he said.

“From National City’s standpoint, there’s no question we’re working hard to be a survivor in this industry. We need to take our model to a broader geographical base because we believe we are very good at what we do. We’re very good at our basic, largest business, which is corporate banking and retail banking. There’s no question about the fact that we want to continue to expand our footprint and add share.”

MacDonald added that bank branches continue to be “incredibly” important and National City has a program to build more. A new branch will be opening in Grandville next month and there are a handful of other locations the company will consider in this market over the next 12 months, he said.

Welsh said National City has “good” market share in West Michigan, but there’s a lot of potential market share it doesn’t have in both retail and corporate banking.

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