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growth into a large community of banks is the result of strong management and a very
Independent Bank Corporation
230 West Main Street
Ionia, MI 48846
Michael M. Magee
President and Chief Executive Officer
Interview conducted by:
Lynn Fosse, Senior Editor
May 18, 2006
Chuck Van Loan, Chairman
During Van Loan's 28 years in the banking industry, he spent the majority of his career at
Independent Bank Corporation; he joined the bank as vice president of personnel and branch
administration in 1980. Chuck progressed up the ranks and was named president and CEO of
Independent Bank Corporation in 1993. When Chuck assumed this position, the Corporation's
assets were $360 million, through his leadership the assets rose to $3.4 billion.
Founded as First National Bank of Ionia in 1864, Independent Bank Corporation now operates
111 offices across Michigans Lower Peninsula through four, state-chartered bank
subsidiaries. These subsidiaries Independent Bank, Independent Bank East Michigan,
Independent Bank South Michigan and Independent Bank West Michigan provide a full
range of financial services including retail and commercial banking, mortgage lending,
investments and title services. Financing for insurance premiums and extended automobile
warranties are also available through Mepco Insurance Premium Financing, Inc., a wholly
owned subsidiary of Independent Bank Corporation. Independent Bank Corporation is
committed to providing exceptional personal service and value to its customers, its
stockholders and the communities it serves. Independent Bank truly is Large enough to serve you. Small enough to know you. Please
visit the website at www.independentbank.com.
CEOCFO: Mr. Van Loan, what was your original vision for the
bank and how has that developed?
Mr. Van Loan: When I became CEO, my primary goal was to
have an acceptable return on equity for the bank as well as earnings per share growth.
Pretty much everything else follows from that."
CEOCFO: Will you tell us
about the bank?
Mr. Van Loan: We are a super community bank and we try
very hard to maintain the community bank service and personal knowledge of customers, and
yet we are large enough with nearly $3.5 billion that we can bring the resources that
allow us provide the variety of products and services that allow us to compete with the
largest banks. We have 111 offices in Michigan. We operate with four separate bank
charters in order to make sure that we maintain our customer centric perspective. The
people that make decisions about customers need to be people that live and work in the
same areas that those customers are from. And not just the management; we have boards of
directors in those banks that also know the community.
CEOCFO: Do your
customers in the various banks realize that they are part of a bigger entity and does it
make a difference?
Mr. Van Loan: Some of them realize and care because
there are offices throughout Michigan. They can use any of our offices or ATMs. For some
groups of customers it is important to have that wide geographic dispersion; for others it
is not key and what they find important is that they can go into any of the offices and
talk to someone that can assist them.
CEOCFO: How do you
divide up between commercial and consumer and are you looking to alter the mix?
Mr. Van Loan: We have always had a strong retail aspect
to our banking organization. In recent years, it has probably leaned more toward an even
balance between commercial and retail. So right now, we are fairly equally divided.
CEOCFO: What do people
find different when they come into one of your branches?
Mr. Van Loan: "There will be variations; not every
office is going to be the same. We try hard to make sure that customers walk in and find
someone that can meet all of their financial needs, a person that can make sure the right
resources are applied to their individual needs.
CEOCFO: Are there any
services that you do not provide now, that you think should be made available for your
Mr. Van Loan: We pretty much provide any financial
service. I cannot think of any that we need to add.
CEOCFO: Where do you
find and attract your customers?
Mr. Van Loan: We attract many customers because people
are moving into an area. As a result, location of our offices continues to be an
important determiner if people bank with us. Many people like banking online; we have a
very good commercial and retail internet banking product. Like many other banks, we have
benefited from consolidation in the industry, particularly among our larger brethren as
they have acquired each other over the years. It is difficult for them to meet customer
needs sometimes, so they fall through the cracks in the larger organizations. We have
capitalized on getting many new customers out of that. We were one of the first commercial
banks in Michigan that offered free checking. We have done a good job of getting our share
of new checking account business and the other business that comes with that.
CEOCFO: Is there a large
amount of community involvement for your bankers?
Mr. Van Loan: Very much so! We expect our people to be
very involved in the community. It is unusual not to have our people involved in the
chamber of commerce, local boards, hospital boards, as well as other charitable
CEOCFO: You have
recently been named 2006 banker of the year, will you tell us about what the award means
for you and for the bank?
Mr. Van Loan: The Michigan Bankers Association, many
years ago, started a banking school. It is a very effective school that meets the needs of
banks in Michigan for training officers in technical areas as well as general management.
That school has a board of directors with more than 20 people that are primarily made up
of bank CEOs from Michigan. Every year they select a Banker of the Year. This year, I was
honored to be chosen. Since this is a peer selection, they know the job and know the
indicators of performance. The award tends to be more about an individuals career
performance rather than any specific action. Being the recipient of the award this year is
very flattering and humbling to say the least. Since the vast majority of my career has
been at Independent Bank Corporation, the people Ive worked with at the organization
probably deserve the award as much or more than I do. Independent Bank Corporation has
gone from a small collection of community banks to a much larger and high performing group
of community banks. This has been the result of the efforts of hundreds of people working
very diligently to make that happen. To me, the honor of what I received is very much a
reflection on the efforts of those people.
CEOCFO: Do you see
acquisitions and new branches in the future?
Mr. Van Loan: That will be a continued direction of our
organization. We have acquired banks and offices of banks for many years. Our current
president and CEO, Mike Magee, is on record as saying that it will be a continuing effort.
Yes, we expect to open new offices, maybe 2 to 5 per year depending on the opportunities
that exist and our ability to handle the upfront cost while still hitting our performance
targets. We also continue to look for other opportunities to acquire offices from other
organizations that may not fit their banking model any more. We are also open to acquiring
other banking organizations.
CEOCFO: In closing, why
should the investment community be interested in Independent Bank Corporation?
Mr. Van Loan: I came up on the human resource side of
the organization, which is kind of an unusual background for a banker. There is an old
truism of human resource management that says the best predictor of an individuals
future performance is their past performance. I think it is true that things change and
people develop but the absolute best predictor if you are trying to select between
individuals to hire for a position, or promotion, is their past performance. I think the
same is true of an organization. When you look at Independent Bank Corporation, and you
look at the five-year, ten-year or fifteen-year performance indicators for our
organization, they are at a very high level, among the top in the industry. Our earning
per share growth rate compares very favorably with growth organizations; well over 15% on
average over the years. That is why I would look at investing in an organization like
Independent Bank Corporation.
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