Money Magnet: Banks, credit unions make move to capitalize on Traverse City’s economic growth

Banks and credit unions are making numerous moves to capitalize on the region’s bustling business and population growth. Some are building new offices and branches. Others are consolidating to improve efficiencies. And there are a couple of new entrants into the market.

Construction is underway on a $15.5 million, four-story building that will house a new administrative center for 4Front Credit Union. It will occupy the upper two floors.

Construction is underway on a $15.5 million, four-story building that will house a new administrative center for 4Front Credit Union west of downtown Traverse City. The upper two floors of the 73,000 square-foot building will be occupied by 4Front. Other office and retail tenants are expected to fill the lower two floors. The building is slated to be finished by late next year.

About 120 4Front employees who are now scattered among seven different locations will be housed in the new building. Branch operations will not be affected, 4Front officials said. “We think there will be a huge boost to collaboration” by locating administrative workers together, said Jason Acosta, 4Front’s vice president of branch operations.

4Front also will open a new $2 million branch office in Cadillac in late October. The branch will have four employees and video tellers in the lobby and drive-through. Live tellers also will be available at the branch, which 4Front calls its “branch of the future.”

The video tellers are located at a 4Front office on Cass Street in Traverse City. The center also serves video tellers at its branches in Mancelona, Petoskey, East Jordan, Kalkaska and Traverse City. 4Front plans to install video tellers in the drive-through lanes of all 15 branches by the end of 2020.

“We’re really marrying the digital experience with the face-to-face experience of banking,” Acosta said.

The Cadillac branch, at 2,200 square feet, is about half the size of a traditional 4Front bank branch. Acosta said it will serve as a prototype branch for possible expansion into new locations, although none are currently planned.

A new four-story development planned for a long-vacant waterfront property along the Boardman River on East Front Street is one of two new Honor Bank sites anchoring the company’s expansion into downtown Traverse City.

Construction began in August on Honor Bank’s new four-story building on a long-vacant parcel along the Boardman River on East Front Street. Honor Bank plans to lease out two floors of the building, including the first floor that is expected to be leased to retail tenants.

Part of the building will be leased to other tenants as office space. As many as a dozen Honor Bank employees, including commercial lenders, will occupy the new building. Honor Bank President and CEO Mike Worden said he would be “pleased if we can move into the building by the end of 2020.”

An initial plan to include residential units in the building was scrapped because of difficulties in melding building code requirements for residential and commercial construction, Worden said.

The bank also recently opened another downtown branch in the former Urban Diversions building at the corner of Eighth and Union streets. That office replaced a closed branch near the Buffalo Ridge Center, where its lease had expired.

“Downtown Traverse City is just a great, vibrant downtown,” Worden told The Ticker in April, adding that Honor Bank had long wanted to have a presence there.

Big changes are occurring at the corporate level of Chemical Bank, but the impact on northern Michigan operations is likely to be minimal, said Scot Zimmerman, Chemical’s Traverse City community president.

Zimmerman

Chemical relocated its headquarters from Midland to Detroit in 2018 and then acquired Minnesota-based TCF Financial Corp. in a $3.6 billion all-stock deal earlier this year. The deal closed on August 1.

The bank will operate under the TCF brand, but the Chemical signs won’t be changed on the bank’s northern Michigan offices until the third quarter of 2020, Zimmerman said.

Customers won’t experience any immediate changes to their accounts, loan payment terms, or access to mobile and online banking, debit cards or ATMs, according to Chemical.

“It’s business as usual, which is kind of nice,” Zimmerman said.

In other moves, Chemical recently sold the historic downtown Hannah-Lay building, where it continues to have an office presence, to Traverse City developer Thom Darga. But the bank has moved about a dozen employees to its main office in Garfield Township, where its collocating wealth management and commercial banking to take advantage of “synergies” between the two groups, Zimmerman said.

Chemical has 450 employees in northern Michigan, including 135 in the Traverse City area.

Robinson

Fifth Third Bank closed its long-held branch at Fourteenth and Division streets near the end of July in response to more customers using online banking functions, said Stephen Robinson, Fifth Third’s vice president of retail regional banking in northern Michigan. “Customers continue to migrate (from conducting business in branches) to digital platforms,” he said.

For Fifth Third as a whole — the bank operates in 10 states across the Midwest and South — 54% of customer checks are transacted digitally through mobile banking applications and ATMs, Robinson said. That has led to “market saturation of the branch network,” he said, adding that Fifth Third also operates another branch on South Airport Road, three miles from the Fourteenth Street branch.

Two new institutions are entering the Traverse City market, heating up the competition for business and consumer financial services. Traverse City financiers George Cochran, Casey Cowell and Lowell Gruman have opened Cochran, Cowell & Gruman, a merchant bank that assists middle-market and early-stage businesses seeking capital for growth, liquidity or succession planning.

Michigan State University Federal Credit Union (MSUFCU) announced in May that it planned to open two branches in the Traverse City area, one in downtown Traverse City and the other in Garfield Township. MSUFCU plans to open a temporary branch at 312 South Union St. by

Ranville

the end of the year. Construction on the second branch at 3750 North U.S. 31 is expected to start next spring and take about a year to complete. Following its completion, the credit union will convert the temporary Union Street branch into a permanent office. April Clobes, MSUFCU’s president and CEO, said in a news release that the credit union decided to expand to here “after many years of receiving member requests for branch access in Traverse City.”

At Independent Bank, Tom Ranville, senior vice president of commercial lending, became the bank’s top executive in the Traverse City market in January. He previously held similar positions at Wells Fargo and Fifth Third banks in Grand Rapids. Longtime President Connie Deneweth retains that title, but is working on special projects for the bank and is expected to retire in the coming months, Ranville said.

Wolak

State Savings Bank in June named Bob Wolak as senior vice president of commercial lending, responsible for originating commercial loans and business banking relationships in Michigan’s thumb area.

Wolak, who has 40 years experience in banking and is currently chairman of the Community Bankers of Michigan association, will be based in State Savings Bank’s Caro office. Caro is located about 30 miles east of Saginaw.

SSB also completed its combination with Central State Bank in July. Both banks were primarily owned by members of the Calcutt family and now do business under the State Savings Bank name.

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