Moving Money: Bank, credit unions expand in the face of COVID
COVID-19 changed the way banks and credit unions operated, shifting many branch services to online platforms. But the pandemic didn’t stop some from moving to brick-and-mortar expansions and, in one case, undertaking a major merger.
The big news roiling the local banking scene was Columbus, Ohio-based Huntington Bancshares’ announcement in late December that it was acquiring Detroit-based TCF Financial Corp. in a blockbuster $22 billion deal.
TCF and Huntington both have a large presence in the Grand Traverse region and considerable overlap of branches. That will result in consolidations, but neither bank is saying how it all will shake out locally.
Huntington CEO Stephen Steinour told analysts in January that the deal would result in the closing of 198 overlapping Huntington and TCF branches, including all 97 Huntington offices in Michigan Meijer stores. That will include the Huntington branch in the Traverse City Meijer.
The deal is expected to close by the end of June, pending regulatory and shareholder approval.
The acquisition comes as TCF barely finished changing the signs on its northern Michigan branches from last year’s merger with Chemical Bank, in which the former Chemical branches branded under the TCF name. TCF did not have a presence in the area prior to the merger.
TCF and Huntington are the second- and fourth-largest banks in Grand Traverse County, respectively, measured by deposits. The two banks had combined deposits in the county of just under $1 billion as of June 30 last year, according to the Federal Deposit Insurance Corp.
Huntington has 36 branches in northern Michigan, including five in Grand Traverse County. TCF has more than 100 branches in the region, including six in Grand Traverse County.
Scot Zimmerman is TCF’s longtime northern Michigan regional president. His local counterpart at Huntington National Bank is Nick Florian.
Meanwhile, several local banks and credit unions have either recently moved into or are completing new office buildings.
4Front Credit Union began occupying its new four-story $15.5 million administrative center at the corner of West Front and Pine streets in February. About 100 employees who had been scattered in various other locations will work in the building.
Another 40 employees who have been working from home during the pandemic also will eventually move into the building.
“We believe in collaboration and the power of working together,” 4Front President and CEO Andy Kempf said.
The 73,000 square-foot building will house 4Front’s banking and credit card back office functions on the top two floors. OMPT Specialists, a physical therapy practice, was expected to open on the first floor this month. Barrio Tacos, a Cleveland-based taco restaurant chain, is expected to open there in May. 4Front is talking with potential tenants interested in leasing 13,000 square feet of available space on the second floor of the building, Kempf said.
Honor Bank expects to move into its new four-story administrative building at 415 E. Front St. in April. The building has been under construction since August of 2019. Bank President and CEO Norm Plumstead said the building will house his office, the commercial lending team and the board of directors’ room. It’s seeking tenants to occupy the lower three floors.
Plumstead said he’s optimistic about leasing prospects and the bank’s business future as vaccines aimed at taming the COVID-19 pandemic become more widely available this spring.
“Like others, we sense a strong rebound ready to happen,” he said. “We are, therefore, very optimistic about the short- and long-term economic health of our communities.”
Ludington-based West Shore Bank broke ground last June on a three-story building at the corner of Eighth Street and Boardman Avenue, and expects to occupy it this fall. The 40,000 square-foot building will house about 30 employees and offer a full range of banking services, said West Shore Vice President Donna Yager. The building also will contain interior parking.
“We wanted to make a significant investment in the community in a meaningful location,” she said. “The Eighth Street corridor is a great fit.”
Yager said West Shore will occupy the entire building. The top floor will contain conference space that will also be available for meetings by community organizations.
West Shore, which entered the Traverse City market in 2017, also has a banking office at 627 West Front St.
The growing Grand Traverse area economy also has lured the Michigan State University Federal Credit Union to Traverse City. MSUFCU opened its first branch here last year downtown at 312 South Union Street and expects to open its second office at 3750 N. U.S. 31 South in June. The two branches replace traditional teller lines with “one-on-one stations and partitions, allowing members and employees to sit down and have more meaningful conversations,” said Deidre Davis, MSUFCU’s chief marketing officer.
Also featured are “tech bars,” where members can get customized assessments of progress toward their financial goals, free gaming apps for young members and drive-up video tellers.
“These locations give us the opportunity to expand our services to our 2,447 existing members living in the Traverse City area,” she said.
MSUFCU has been rapidly adding brick-and-mortar branches across the state to exploit new markets. Davis said while customers are increasingly utilizing online services for transactions, they still want face-to-face advice on complex financial planning and problem resolution. The credit union’s new Traverse City branch will be its 22nd in the state.
Frankfort-based State Savings Bank opened a loan office in Suttons Bay in February, its second location in Leelanau County. The office is located at 212 N. St. Joseph St., next to the Bay Theatre. The office offers mortgages and consumer loans. Customers also have access to the bank’s commercial lending services.
“State Savings Bank has long had a retail office in southwest Leelanau County (Empire), and we already do some business in the rest of the county,” spokesman Doug Zernow said. “We see opportunity for a community bank approach on this side of the county. Suttons Bay is a good place for us to be.”
Bucolic Leelanau County is becoming a popular destination for well-heeled retirees and remote workers relocating from metropolitan areas. Median household income in Leelanau in 2019 was $65,249, which was $8,135 above the state average. That also was the highest in the Traverse City Business News’ coverage area of Benzie, Grand Traverse, Kalkaska and Leelanau counties.
TBA Credit Union, which has only two physical branches, has long eschewed brick-and-mortar expansions in favor of more online banking services. For instance, it allows customers to use electronic signatures for all deposit accounts and loans. That paid off during the COVID pandemic. Online banking traffic jumped 25% prompting the credit union to temporarily shift several employees from branches to its service center, where it handles calls, texts and web chats.
In addition, it permanently moved one employee to the service center and hired a second to handle the increase in digital services said Karen Browne, TBA’s president and CEO. That’s freed up space in its branches for physical distancing and work space for employees who work at home but occasionally need to come into the office.
“We have plenty of room to grow,” Browne said.