New Bank Thinks Big Goes Small

August 29, 2003
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MUSKEGON — After building a solid foundation serving small and medium-sized businesses, Community Shores Bank Corp. is looking to add business by going after an even narrower market niche.

The four-year-old community bank has put in place an initiative to pursue new customers from among the smallest of small businesses in Muskegon County and northern Ottawa County.

The market niche includes “mom and pop” small businesses that have fewer than 20 employees, need to borrow $10,000 to $100,000, and could use the business services the bank offers, Community Shores Chairman and CEO Jose Infante said. Community Shores is aggressively targeting the approximately 3,600 small businesses in Muskegon County and northern Ottawa County that fall into that market category.

Market research shows the bank can grow further through the pursuit of those small businesses that feel underserved by larger financial institutions, Infante said.

“We’re drilling further into our core. The market’s big enough, and while we think we’ve done a good job, there’s more to be mined,” Infante said.

One of the growing number of small banks founded by executives from larger institutions who ventured off on their own in the wake of intense industry consolidation in the 1990s, Community Shores has carved out a share of the Muskegon-area banking market by targeting small and medium-sized businesses and retail customers from its three office locations.

As a small business itself that touts a high level of customer service, Infante believes Community Shores is in a position to offer those potential small-business customers “the same kind of service as the big guys,” while picking up a market niche that is very loyal. As an added benefit, he said, there’s a potential for the bank to receive additional retail customers from small business owners in the market category who may move their personal accounts as well.

Community Shores Bank has assets of $185.6 million and a deposit base of $147.8 million. Loans as of June 30 totaled $150.6 million.

The bank during the second quarter recorded net income of $138,685, or 10 cents per share, down from the $170,700, or 14 cents per share, during the same period a year ago. The lower earnings are attributable to the $72,468 in federal income taxes the bank paid for the first time ever, Chief Financial Officer Tracy Welsch said.

After 11 straight profitable quarters, the bank has erased its initial start-up costs and losses and now must pay federal taxes, Welsch said.

Through the first six months of the year, Community Shores’ net income was $648,146, or 47 cents per share, a 92 percent increase over the $336,371, or 28 cents per share, in the same period in 2002.

Infante stressed that even as Community Shores targets the smallest of new customers, the bank intends to remain aggressive in other market categories and pursue larger commercial customers.

“We’re still as aggressive in those as we were before,” he said.           

Community Shores Financial Picture

Net income
2Q 2003: $138,685, 10 cents EPS
2Q 2002: $170,700, 14 cents EPS
YTD 2003: $648,146, 47 cents EPS
YTD 2002: $336,371, 28 cents EPS

Total assets
2Q 2003: $185.6 million
1Q 2003: $188.7 million

Total loans
2Q 2003: $150.6 million
1Q 2003: $147.3 million

Total deposits
2Q 2003: $147.8 million
1Q 2003: $148.3 million

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