Small and Smart
Since the crisis of 2008, all of the state's community banks have been hit, however, and thirteen have closed their doors. The financial losses stemmed mostly from commercial real estate loans. When mortgage lending dried up, subdivisions were left unfinished, and eventually the developers couldn't make their loan payments to the bank.
"We had a significant number of charge-offs," Mann admits.
Innovation took over at that point, as some of the players looked for creative fixes. When several foreclosed lots came back into Chelsea State Bank's hands, the bank partnered with Ann Arbor-based builder Norfolk Homes for a solution.
"I don't know who contacted who," says CSB vice-president Jim Wolfington. "But they said they have a new model to build, so we worked together. We're not in the business of holding land. And our experience with foreclosed properties was rare prior to 2008."
Norfolk built homes on the foreclosed lots and was able to sell them, getting the land off the bank's books. While CSB remains wary of making large loans to new developments, at the same time, its leaders know business must go on.