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By Nathan Peck | MiBiz
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MUSKEGON — To look to the future of the banking industry, the United States should look to the past.

The lessons of the last two years are that personal relationships matter, said Muskegon-based Jose Infante, senior VP of lending for Independent Bank. With assets totaling $2.995 billion in 2009 on $2.5 billion in deposits, the bank has had to deal with losses in 2009 of $49.2 million.

Infante took some time recently to speak with MiBiz about the difficulties of the last two years and the opportunities Independent Bank hopes to capitalize on in 2010.

MiBiz: What is 2010 looking like for Independent Bank?

Infante: I think the biggest news is we are seeing a sort of renewed confidence by our customers. They are feeling better about the economy. Light industry is seeing orders coming back. They might not be expanding the workforce just yet, but they are calling people back that they laid off. Especially in Muskegon and Grand Rapids, I’m seeing a little more bounce in our customers’ step. Whereas they were flat or a little up at the end of 2009, I’m seeing between 5 and 10 percent growth this year.

MiBiz: What has you optimistic for the next year?

Infante: No question that the temporary workforce numbers are up. They are seeing unbelievable growth — the temporary services are doing very well. Part of the reason for that is that business is improving, but there has been hesitation on whether to hire permanent workers until other parts of the economy show strength. That is a big unknown.

The market is poised to slowly come back. Small to medium-sized businesses are our bread and butter, but they are slower to come back out of a recession. What banks like us rely on are vehicles like the (Small Business Administration) loan programs to help drive lending. I expect to see more traffic in the SBA area. In a lot of ways, they are a hedge on the risk of lending today. You will see more and more banks talking about SBA lending, using SBA loans to help get the economy going again.

MiBiz: Where are you seeing activity?

Infante: Our sweet spot is the $250,000 to $2.5 million loans. The requests on that level are what we feel comfortable with for us. The SBA covers all that range. We are seeing more interest from small manufacturers and the professional practices. The desire for more access to lines of credit is the same whether you are a doctor or manufacturer. We are seeing incremental indicators that the economy is starting to turn around.

MiBiz: How is Independent Bank dealing with the effects of the economy on your books?

Infante: For a while, we spent a lot of time trying to collect loans. Lately, we have been committing our staff to making sure that we are responsive to the needs of our customers — not that we have not been doing this. We have been so self-absorbed with how we tried to take care of our large losses — our shareholders demand we do everything to protect them from the losses. It is crucial that bankers take the lead in that.

We are in a tougher economic situation than before, no doubt. What is lost, I think, is that banks are still mainly character lenders. I can feel more comfortable with less collateral when I can trust the customer. Even when cash is there to make a loan, and I don’t feel comfortable with the borrower, I won’t do the loan. I get to know my customers very well. I have relationships that cover 25, 30, 35 years. (In the past), it became at times more a matter of the type of fee one could get on a loan, rather than if it made sense in the long run for the customer.

The economy is the other challenge. It still is not the best in the world. None of us can change that alone. But again, you are seeing signs that people are doing a little expansion. The state, and West Michigan in particular, is doing better.

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TAGS:

• finance
• independent bank
• jose infante
• muskegon
• western michigan