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By Nathan Peck | MiBiz
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HOLLAND — Sometimes a victory comes in the form of avoiding the missteps of your competition.

Garth Deur, president and CEO of the The Bank of Holland, recently spoke with MiBiz about how his institution handled the uncertainty that has plagued the banking industry over the last 24 months. Deur has helped guide the 12-year-old institution that has grown from its start in a former bike shop in Holland into a local bank with $574 million in assets and 70 employees in two locations in Holland and Grand Rapids.

MiBiz: The Bank of Holland saw growth in 2009, with more than $5.5 million in income. How did you achieve these results?

Deur: 2009 was a year where you won by avoiding problems. Fortunately for us, we avoided a lot of the problems that plagued the rest of the industry. It was a positive year; we saw improvement over 2008. We avoided a lot of the issues that others have encountered in the real estate market. We take a long view of our portfolio. We pulled way back from speculative real estate lending a few years ago (and) it has proved to be a good decision.

You have to segregate the real estate market into several pieces. The end result is that owner-occupied, commercial real estate has held up far better than the multiple-tenant (commercial) real estate market where there is a glut of supply and a lot of competition. It has been the multiple tenant spaces, and strip malls, and the condominium-ized real estate products that have really taken the brunt of the real estate downturn.

MiBiz: As regional banks move out of some markets, what opportunities are there for The Bank of Holland?

Deur: We see a great deal of commercial and business lending opportunities. A lot of those companies that had a great deal of difficulty in late 2008 and early 2009 and resized the business to their current levels. We look at 2010 as a year of great opportunity. With so many institutions being hobbled by loan problems, we continue to be in the market. We continue to be in the market working with businesses that have more conservative views.

We only do business in West Michigan — we don’t have an alternative. This is where we live and work. Our decisions are made locally. Small-business owners are decision makers, and they want to do business with decision makers. The closer to their markets their decision makers are, the more comfortable they are with their lenders. We don’t evaluate businesses by SIC codes. We evaluate businesses individually, specifically the management teams, their track records, address them each as individuals, not as an industry.

MiBiz: There is still a lot of criticism that banks are being too slow in freeing up credit markets. How do you respond?

Deur: Credit is absolutely available for strong companies with good balance sheets. I don’t think there is a lot of demand for new credit. There are a lot of people trying to move credit around. Credit expansion follows business recovery, it doesn’t lead it. It is very difficult to move credit right now, but don’t confuse that for access to credit.

2010 is going to be a year of challenges, but challenges yield opportunities. There are still a lot of businesses in West Michigan that are doing fine.The companies who survive have a wonderful opportunity to grow and gain market share. When (larger banks) take a dim view of a sector, they take that approach across all companies in that sector.

We are not making decisions by industry sector. There are a lot of good companies in those challenged industries that are very committed.

MiBiz: How are you dealing with increased regulation?

Deur: We’ve found that the regulators who know the community banks understand which are institutions that have behaved appropriately and which have not. While the regulatory climate is changing, we have found them to be very fair. They expect to find problems, (and) sometimes they are surprised when they don’t.

I don’t think there is any question that the regulatory environment in the industry is going to be different. And I believe that is appropriate. We anticipate (regulators) will raise the required capital levels for banks and we’ve been preparing for that. Twelve percent is the new 10 percent. We think we know what the answer is going to be, so we’ve been aiming at that for a while.

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• finance
• western michigan