TRAVERSE CITY — The largest independent bank in northwest Michigan will have new leadership after its longtime president and CEO announced his retirement.
Harry “Scrub” Calcutt III, president, CEO, and chairman of the board for Northwestern Bank, informed bank employees by email on Monday that he’ll leave.
“This is something I’ve been thinking about for some time,” Calcutt wrote. “I’ll be turning 65 in January, and there are a number of projects – some business-related, some community-related – that I would like to be able to spend time on.”
Calcutt was not available to comment, bank spokesman Doug Zernow said.
Calcutt has run the closely held private bank as CEO and chairman for 12 years and tripled its size over that time, Zernow said.
“Our capital has never been stronger and all the measures of a successful bank are there,” Zernow said.
Since August, the bank has operated under a consent agreement with the Federal Deposit Insurance Corporation and Michigan’s Office of Financial and Insurance Regulation. The agencies found the bank operated with “unsound” practices, primarily in relationship to a large group of bad real estate loans connected to one organization.
Zernow said Calcutt has talked about retiring for the last year and his resignation is not related to the consent agreement, nor does it come at the request of the bank’s board.
“We finished the year profitable and the bank is doing well,” Zernow said. “The timing puts it out of context.
“Scrub’s retirement is not a result of the consent order,” he said.
The consent order specifically required the board add two independent members with bank experience and “have and retain qualified management.”
The consent order mentioned management 17 times and retaining an experienced, qualified CEO was the first condition of the agreement, said Tom Hinkel, director of compliance for banking industry consultant Safe Systems, and author of the online column Compliance Guru.
“Regulators consider virtually any problems to be reflective of management,” Hinkel said.
“Could it be that he’s perfectly qualified, sure, ... but it’s a pretty tough case to make,” Hinkel said. “It just begs the question ... if (Calcutt) is the right guy, why is he being called out in a consent order for mismanagement.”
A successor has not been named, but Zernow said the process already is in the works. He declined to speculate when a new CEO might take over but said the board wants someone who understands the bank’s system.
“We have a very unique culture that is not typical of other banks,” Zernow said. “We have empowered our people to make decisions to solve a problem for a customer on the spot.
“They don’t need to seek management approval, and that’s rare for a bank,” he said.
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Related Photos
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(Record-Eagle file photo/Jan-Michael Stump) The Northwestern Bank building at 625 S. Garfield Ave.
UPDATE: Northwestern Bank president to retire
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