Street Talk: Banks keep reshuffling; Mercantile keeps watching
“There’s a lot of M&A activity going on, and especially in Michigan,” notes Mike Price, CEO of Mercantile Bank.
And yes, he’s talking specifically about bank mergers and acquisitions.
Mercantile was among the notable bank deals in West Michigan lately, having completed its acquisition of Firstbank in Alma in 2014. That boosted Merc’s standing to fourth largest bank domiciled in Michigan, with assets of almost $3 billion.
In mid-2014, while the Mercantile deal was wrapping up, another Grand Rapids bank was in the news. National Bancorp of Evansville, Ind., announced it had reached an agreement for the acquisition of Founders Financial Corp. in Grand Rapids. Old National, founded in 1834, had more than $10 billion in total assets and 173 banking centers in Indiana, Illinois, Kentucky and Michigan as of June 30, 2014. It is the largest financial services holding company based in Indiana and has been growing in Michigan.
Yet another major acquisition took place in early January when Chemical Bank — the second largest bank headquartered in Michigan — revealed it had acquired privately held Lake Michigan Financial Corp. for $184 million in cash and common stock. LMFC founded The Bank of Holland in 1998 and two years later The Bank of Northern Michigan, which had total assets of $1.2 billion back in September.
Meanwhile, we learned in January that Independent Bank Corp. in Ionia was shedding six more branches throughout the Lower Peninsula, leaving it with 69. Back in 2012, Independent sold 21 of its branches as part of its recovery from the recession. However, with assets of about $2.25 billion, it is still the fifth largest bank headquartered in Michigan. It marked its 150th birthday last year.
Brad Kessel, president and CEO of Independent, said the bank showed improvement in 2014, but “we recognize the importance of improving our performance even further. Thus, we are announcing a branch consolidation and the authorization of a share repurchase program …”
Kessel said branch transaction volumes are declining, while mobile and other electronic channels continue to experience greatly increased use, so Independent is continuing to evaluate the branches and “make necessary adjustments in response to these changing transaction patterns.”
Mercantile is doing well, enough so that it increased its dividend in January from 12 to 14 cents per share. So is Mercantile contemplating any more acquisitions?
“Nothing is pending right now,” said Price, but added Mercantile is “an active participant from the standpoint that we are looking for banks to acquire. But it’s a very disciplined approach. While we would prefer to grow organically — which we have very strong outlooks for this year — if the right opportunity comes along, like the Firstbank opportunity, we would certainly take a hard look at it.”
He quickly added that a hunt for more acquisitions is “not our number one mission right now, but we certainly are trying to be involved in the conversation.”
First, anyone who is a native of or has been associated with “East” doesn’t fail. Second, a professional hockey player performing at the highest level cannot be deemed a failure.
If your mind flipped over to “true” on either or both of those statements, reserve some time to get out of the house tonight.
Failure:Lab, the international movement showcasing individual and personal stories of failure, is hosting Failure:Lab East Grand Rapids, 7-9 p.m., Feb. 2, in the Performing Arts Center of East’s high school.
The event showcases several speakers’ personal stories of failure, courage, determination and the strength to get back up. The public event is paired with a private Failure:Lab that morning, attended by EGR juniors and seniors.
Speakers at each event will share their most vulnerable moments.
“Human nature is to fear failure, and we often teach children at the youngest age to avoid risk. We want to teach and influence kids about failure to best prepare them for college and beyond,” said Jennifer Fee, principal of East Grand Rapids High School. “In addition, we want to provoke a dialogue with families and keep the conversation going at homes.”
All of the speakers have connections to East. One of the more fascinating revelations might come from Luke Glendening, a star athlete for the Pioneers who ended up walking on with the University of Michigan hockey team. By the time graduation rolled around, Glendening was captain of the Wolverines.
After being passed over in the National Hockey League draft, he hooked on with the hometown Grand Rapids Griffins and flourished as the club skated its way to the American Hockey League’s Calder Cup. He eventually earned a look with the Detroit Red Wings and now shares the ice with Hockeytown stars Henrik Zetterberg and Pavel Datsyuk.
Other speakers are well known within the community and also will offer insights on perseverance. They include Peter Secchia, diplomat and businessman; Peter Stuursma, East varsity football coach and middle school principal; Lorie Tensen, author and speaker; Joel Peterson, builder; Joe Carroll, Broadway performer; and Mal Merpi, actress.
“The willingness to risk failure is critical to producing new innovations. I have spoken with my children about taking small risks for years, and it’s been my goal since the first Failure:Lab to bring the event to a larger group of students,” said Michael Sytsma, senior vice president at The Bank of Holland.
“Celebrating those moments when our youth try new things — be it sports, music or academics — or meet new people is a trait that is transferable from preschool to their adult years.”
Visit failurelab.com/events/east-grand-rapids for tickets and information.
When the Business Journal hosted Reshma Saujani as the speaker at its February 2014 Most Influential Women in West Michigan event, her presentation centered on her national organization Girls Who Code.
The mission of the nonprofit organization is to inspire, educate and equip middle school and high school girls with 21st century computing skills.
On Jan. 12, Calvin College launched a local Girls Who Codechapter that will meet weekly. The volunteer instructors of the new chapter are Ruth Holtrop and Heather Bremer, software developers at Open Systems Technologies in Grand Rapids.
The club is meant to introduce young girls to the field of computer science and the opportunities it creates.
The Girls Who Code curriculum includes monthly, project-based activities and opportunities to build real-world software including mobile apps and games. Students also work on a project of their choosing that impacts the community.
“By making it problem-oriented, they can see that this isn’t just abstract stuff of no consequence. This can be used for social good and it can make a difference,” said Joel Adams, chair of the computer science department.
Camille Emig, a junior at Grand Rapids City High, was behind the efforts to start the new chapter. Her excitement for computing is contagious among the 23 girls that have been attending. Emig’s hope is to share with them what she knows and loves about computing.
“If you have an idea, the amazing thing about computers is the fact that you can almost always make that idea come true," said Emig.
Just ask Saujani; she will tell you the same.