ABOUT ERIK BAKKER:
Erik is Executive Vice President, Chief Commercial Loan Officer of Bank of Ann Arbor, a locally owned and operated full-service community bank with eight locations serving Michiganders throughout southeast Michigan.
Erik joined Bank of Ann Arbor in June 2016 as the Executive Vice President and Manager of the Trust and Investment Management Group. He assumed the role of Birmingham Chief Lending Officer in September 2017. He became Chief Lending Officer of the Bank in April 2022.
During his tenure at Manager of the Trust and Investment Department, Trust Assets doubled from $1 billion to greater than $2 billion and annual Trust revenue has grown by over 50% to $7.4 million. The Birmingham loan portfolio has grown over 30% in the three plus years under his management and is approaching $300 million.
Prior to joining BOAA, Erik spent 28 years at JPMorgan Chase and its predecessor banks, most recently as Senior Vice President of the Midwest Business Banking practice where he managed a group of 450 bankers and a staff responsible for a $20 billion deposit portfolio and a $5 billion loan portfolio. Prior responsibilities included management of JPMC's commercial banking practice in the Eastern Michigan/Northern Ohio market, Managing Director of the Automotive and Transportation Group and various assignments in the corporate and capital markets banking businesses.
Erik's involvement in the community has included board participation at the Ann Arbor Summer Festival, the Ann Arbor Hands-On Museum, and the Rotary Club of Ann Arbor. He currently is on the Board of the United Way of Washtenaw County and the Michigan Bankers Association Trust Executive Committee.
Erik and his wife, Becky, have three grown children. He is an avid cyclist who enjoys all outdoor activities, including traveling, hiking, and gardening.
Erik holds degrees from Kansas University; a B.A. in Journalism and Editorial and M.B.A in Finance.
ABOUT ANDY LABARRE:
Andy LaBarre was first elected to the Washtenaw County Board of Commissioners in 2012, representing District 7, located in the eastern half of the City of Ann Arbor. Andy is a proud Democrat. He served as Vice Chair of the Board of Commissioners and previously served as Chair of the Board (2017-18), Chair of the Ways and Means Committee (2015-16), and Chair of the Working Session Committee (2013-14). Andy lives in northern Ann Arbor with his wife Megan (a teacher at Dexter Community Schools), son Declan, daughter Delaney, and dogs, Monster and Frankie.
Andy now serves as Executive Vice President and Director of Government Relations for the Ann Arbor/Ypsilanti Regional Chamber and is David Fair's co-host for "Washtenaw Business Lens."
RESOURCES:
TRANSCRIPTION:
David Fair: This is 89.1 WEMU, and it's time for our monthly look at the business community in Washtenaw County. I'm David Fair, and welcome to Washtenaw Business Lens. Each month, we partner with the Ann Arbor/Ypsilanti Regional Chamber to look at how the news of the day impacts the local business community. Andy LaBarre is Executive Vice President and Director of Government Relations for the Chamber and is a part of each month's conversation. It's good to see you again, Andy!
Andy LaBarre: David, you as well! Happy April!
David Fair: And today, we want to take a look at how banks play a role in supporting our local businesses, and that industry has its own perspective on what is happening and what may lie ahead. I'm glad to say today we're joined by Erik Bakker. Erik is Executive Vice President and Chief Commercial Loan Officer at Bank of Ann Arbor. Thank you so much for your time today, Erik!
Erik Bakker: Oh, it's my pleasure, Andy and David! Happy to be with you!
David Fair: Well, my impression of things, Erik, is that most people do not have a highly favorable view of the big multinational banking industry in America. Too big to fail is kind of scary these days. How does Bank of Ann Arbor differ from banks like your former employer at JPMorgan Chase?
Erik Bakker: I'd answer that this way, and this is a very basic view in terms of small business lending. But in general, I think local banks lend to people in places, and national banks lend to to models and portfolios. And it's not unusual because large banks need to scale their business. They have disciplined credit standards across their markets, and they're required to do things differently as result of that. So, they have large credit and profitability models, and they put variables based on the company's financial condition and maybe a proposed credit structure into a model. And that model provides a recommendation on a credit rating and maybe return requirement for the credit that meets a bank's target. So, the model typically doesn't vary, regardless of whether you're in Michigan or Texas or California. And typically, the decision that's made from the model does not get overridden, so those decisions are made in the central location, not in the local market. So, local banks, they have credit standards, no question about it, in return expectations, but they typically have a better understanding of local market and rely less on models to drive their credit decisions. And they can bring some customization in credit structure into the profits.
David Fair: And, Andy, given all the uncertainty that we're dealing with in the present and for the near-term future anyway, what kind of sentiment are you getting from the local business community at the Chamber when it comes to securing loans and having a relationship with the banking industry?
Andy LaBarre: Yeah, David, I think it's twofold. One is just the world is a busy, active place. And so, trying to stay abreast of the news and the conditions and what that means for rates and other things, that's one challenge. But Erik really sort of hit that nail on the head in terms of how do you translate a unique business or organizational idea into a financial package alone or what have you that works for you? And part of the sentiment that we hear is a disconnect from local small owners and operators. And, as Erik said, this model used nationwide juxtaposed to, say, Bank of Ann Arbor or another community bank that has sort of human beings in and of the community with community understanding. Because each and every successful business idea is generally unique unto itself, if not in the concept, at least in the operation. Connecting those human-to-human interactions, that's a real challenge that can be hard for our members to meet in a busy world.
David Fair: Well, Erik, and that speaks to relationships. How do you view personal relationships as part of the business process of small business lending?
Erik Bakker: Yeah, it's a good question. I'd say they definitely count. And obviously, it doesn't preclude anyone who doesn't have a relationship from a bank to get credit. But if we know somebody or know a business, we'll have a view of their character, issues like integrity, communication, reliability, and how they might partner with us in a difficult situation, that's all very important to us and makes it a little bit easier for us, let's say, to stretch on a potential transaction with an experienced business person who might have a track record with the bank or a track record in business. If you're applying for credit for the first time, we'll just need to dig a little bit deeper with our due diligence to get a handle on some of these character issues. So, your referral sources, your work experience, we will dig deep on your resume, we get your credit rating. So, those are all things if you're a new client to the bank, we do a little more due diligence on if you have a business request.
David Fair: Washtenaw Business Lens continues on 89.1 WEMU. Andy LaBarre is here. He's from the A2Y Chamber. And today, we're looking at our business community through the lens of the Bank of Ann Arbor. And our guest is the bank's Executive Vice President and Chief Commercial Loan Officer Erik Bakker. Now, Erik, is this, amid all the uncertainty, a good time, a bad time or a time to be cautious when it comes to potential business owners in launching right now?
Erik Bakker: I would say it's a difficult time, and it's difficult because of the uncertainty in the marketplace. When we get a credit request coming in, we look at a number of different factors. And a few of your listeners might know about the five C's of credit. One of those C's is condition. And some of the conditions are just difficult for people that are requesting credit to analyze. We have an uncertainty in the market in terms of the price of goods and services. And as a result of that, it just makes it more difficult for us to look at a business plan with certainty and to determine how we should move forward on a credit request. It's not the end-all be-all, but it's just another factor that you have to lend to the mix or add to the mix, which makes it a little bit more difficult to access credit in an environment like this. What banks like to see is just certainty with all the inputs in a business model, and the more difficulty we have in analyzing those inputs, the harder it is for us to make a credit decision.
David Fair: And, Andy, as we face this uncertainty and difficult time to launch new business as you project forward out beyond this first quarter of 2026, what does the Chamber see when it comes to local business growth in Washtenaw County?
Andy LaBarre: I think it's generally optimistic, but I would agree with Erik that part of the challenge is the uncertainty or the lack of clarity. And obviously, the world is always in motion, so that's always a component of it. But it's sort of sped up certainly over the last generation here, and that's before you look at not just what's happening in the world, but also the implementation of broad technological changes, the difference in the commercial interactions. COVID was a great disruptor of that sort of normal, in-person model for a lot of businesses. So, as we've come out of that, and as we look at the world in motion, there's cautious optimism, but it's a complex time. And I think, as Erik said with one of those Cs, condition, I'd add complexity. We're cautiously optimistic in a complex, active time.
David Fair: And how does Bank of Ann Arbor, Erik, go about supporting its existing clients, those who you already have established relationships with and have a business track record but may be undergoing some of the difficulties presented by this uncertainty?
Erik Bakker: We work very closely with our clients. And most of the time, we have built pretty long-term relationships with our clients, and we understand their financial condition. And if they're undergoing a difficult time, we'll get our hands dirty and work closely with them to try to figure out the best solution to move forward. That's the other thing about community banks, that we're making decisions locally. And we usually have a little bit longer timeline to work through problems with the bank with a client person versus maybe from the larger banks that might move things to a workout group sooner than we would because that they don't have the local knowledge that we have
David Fair: And, Erik, are there key industry metrics you are looking at to kind of assess the overall condition of the local economy in Washtenaw County and in this region you serve? And if so, how do they look right now?
Erik Bakker: We definitely look at those factors, and a good example, let's say, is the commercial real estate sector right now. There's obviously demand for different parts of that market, let's say, the multifamily Ann Arbor is different than retail or office of industrial. So, we'll get factors within that industry to determine how we might want to proceed forward with a credit decision. We are a bit insulated in in this county because of the university and the health care systems, which provide a bit of a buffer to the economic climate here. So, I would say, the factors right now, and I'd agree with Andy, people are optimistic, but the uncertainty is causing just a bit of a slowdown in our business activity as people have difficulty in determining what those cost inputs might look like when they're putting a business plan together.
David Fair: Well, Erik, I'd like to thank you for making time to talk with us today! I certainly appreciate you sharing your perspective!
Erik Bakker: Well, thank you, Andy and David! It was nice being with you, and I enjoyed it!
David Fair: That is Erik Bakker. He serves as Executive Vice President and Chief Commercial Loan Officer at Bank of Ann Arbor and has been our guest on Washtenaw Business Lens. This regular conversation series is brought to you in partnership with the Ann Arbor/Ypsilanti Regional Chamber. And each month, we also hear from the Chamber's Executive Vice-President and Director of Government Relations. That's Andy LaBarre. Andy, we'll see you in May!
Andy LaBarre: Looking forward to it, David! Thank you!
David Fair: I'm David Fair, and for more information on Washtenaw Business Lens and today's topic, just stop by our website at WEMU.org. This is your community NPR station. It's 89.1 WEMU, Ypsilanti.
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