New bank nearly ready to open downtown

May 20, 2012
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One of the youngest banks in Kalamazoo is about to become the newest bank in Grand Rapids.

First National Bank of Michigan, which has two offices in Kalamazoo and one each in Portage and Oshtemo Township, is putting the final touches on its latest location at 141 Ionia Ave. NW in the downtown district.

First National was founded by Chairman and CEO John M. Schreuder and Larry Lueth, bank president and senior lender, six years ago. In about six weeks, Daniel Bitzer, the bank's market president for West Michigan, will unlock the doors to First National's first Grand Rapids' office. It will be located in the historic structure once known as the Republic Bank Building.

"The work is being done to historic standards. Pioneer Construction is doing the build-out, inside and out. So, basically, we're redoing the entire building. We hope to be up, operating and open by July 15. That's our goal," said Bitzer.

"We are investing over $750,000 in this downtown project and are bringing a significant payroll to downtown Grand Rapids. Both are good things," he added.

Bitzer, who has 28 years in the industry, came to First National in January to lead the bank's team in Grand Rapids. His lengthy and broad experience includes specialties in bond financing and municipal lending. He has managed commercial real estate portfolios in Michigan and northwest Ohio and served as treasurer for Otsego Public Schools.

Bitzer earned a mathematics degree from Ferris State University and a master's in economics from Western Michigan University, where he also taught in the economics department. He has spent 20 years of his career working alongside Schreuder and Lueth. "So for me, it's like coming home," he said.

First National will bring 10 new jobs to downtown. Bitzer said all the managerial positions have been filled, but when he spoke with the Business Journal, he said the bank was still looking for a head teller and part-time teller.

First National had a strong 2011. The Michigan Bank Performance Report ranked it first in a field of 121 banks for overall operations. The ranking was based on a measurement that included total assets, asset quality, efficiency ratio, return on assets and return on equity.

"We see business owners doing a great job of managing difficult times, and our customers should expect the same from their bank," Schreuder said about the ranking.

The bank was an active lender last year. First National's net-loan portfolio grew by $15.3 million in 2011 to end the year at $159.2 million. Deposits rose by $26.8 million to $173.5 million, while net income went up by $625,000 to $2.1 million. The bank ended the first quarter of this year with net loans at $154.8 million, while net income rose by 13 percent from the same period last year.

"Although loans and deposits are projected to increase in 2012 due to start-up expenses being incurred for the Grand Rapids office, net income is not projected to increase over 2011," wrote Schreuder and Lueth in a recent letter to shareholders. "The benefits of our expansion into Grand Rapids will accrue to the bank in 2013 and beyond."

Bitzer said First National selected the city for its expansion because the bank has a bit of history here, and a number of individuals in the area own stock in the company.

"We are a locally owned bank servicing locally owned businesses. We have 225 shareholders, and 10 to 15 percent or more of them are from West Michigan," said Bitzer. "We have been doing business in Grand Rapids for probably the last two to three years. So this isn't new to us."

Bitzer added that the bankers at First National are veterans with at least 15 years in the business. "The talent that we've attracted is very seasoned, long-term West Michigan bankers," he said.

As business owners and real estate developers know, it often costs more to locate an office downtown. Bitzer said First National purposely chose a downtown street that requires its center to be historically built — an additional expense.

"I personally am a big proponent of downtown. I feel that downtown is the main hub of the community and business. Downtown is where businesses are, and I felt our start needed to be downtown. Any major bank in any market has a downtown presence, and I felt that is what we needed to have," said Bitzer.

First National focuses on businesses, offering a full range of commercial services, such as courier service. Bitzer added that the bank also caters to individual depositors and offers them an array of consumer products such as residential mortgages and home-equity lines.

"We are a full-service branch, as we thought that was important. We could have gone to a loan-productive office and not had a full-service branch. That was an option, but we thought it was very important that we have a full-service branch," he said.

Schreuder said it was important to First National that potential clients know its bankers want to gain the reputation of being partners in their business and personal financial growth.

"Our bank's high-touch approach to delivering services has been well-received, and we know that locally owned businesses want to know bank-decision makers," he said. "As a Michigan bank, we are excited about Michigan's future and think that a presence in the Grand Rapids area will help us lead the state to that future."

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