Merchants Financial Group, Inc. Announces Earnings of $18.16 Million through Second Quarter of 2021

Greg Evans, President & CEO

Merchants Financial Group, Inc. (MFGI) announced net income of $18,157,527 through the first two quarters of 2021, according to MFGI President & CEO Gregory M. Evans.

Performance was driven by the Bank’s active involvement in the origination of Small Business Administration (SBA) Paycheck Protection Program (PPP) loans for small businesses throughout the region and continued strong origination volume of residential mortgage loans.

“Our strong earnings reflect our commitment to continue showing up in our communities as a trusted advisor and resource. As community bankers, it’s our privilege to serve our communities and do our part to help local economies and neighbors recover from the pandemic,” said Evans.

Net income is $9.7 million ahead of mid-year earnings performance for 2020 when the early onset of COVID dramatically impacted MFGI’s performance results. All four Bank regions, Merchants Bank Equipment Finance and the Secondary Market Mortgage division have exceeded earnings plans for the first six months.

Merchants has originated an additional $80 million of PPP loans during a recent round of SBA funding and approximately 65% of Merchants’ total PPP origination volume of $290 million has been forgiven, providing area small business owners a much needed resource to survive the pandemic. Merchants’ residential mortgage loan volume for the first half of the year has been $484 million, and mid-year performance was also bolstered by reversal of excess Allowance for Loan/Lease Loss Reserves.

“We continue to focus on walking our business customers through the forgiveness process for PPP loans, and those proceeds have been a significant lifeline for owners of family-owned businesses that are the backbone of our communities’ economic viability,” noted Evans. “Our market leadership in mortgage lending has afforded many families to take advantage of low interest rates by purchasing a new home or refinancing their current mortgage.”

Merchants Financial Group, Inc. is a publicly-traded Company. Ownership is made up of its more than 440 employees and mostly individuals and families from the communities the Bank serves.

Merchants Bank is a full-service community bank with 23 bank locations in southeastern Minnesota and west-central Wisconsin and a leasing division, Merchants Bank Equipment Finance, in Edina. Headquartered in Winona, MN, MFGI has more than $2.5 billion in assets. Merchants was founded in 1875.

Tirzah Warren Promoted to Assistant Vice President/Teller Administrator

Tirzah Warren, Assistant Vice President/Teller Administrator

Tirzah Warren has been promoted to Assistant Vice President/Teller Administrator at Merchants Bank, according to Sue Hovell, Director of Retail Banking Performance.

“Over her 20-year career, Tirzah has consistently demonstrated her commitment to serving our customers and her leadership ensures they are taken care of professionally and compassionately by our teller team,” said Hovell.

Warren has been with the Merchants Bank since 1999, when she started as a Teller at the Winona-Goodview location. In 2001, she was promoted to Lead Teller in Goodview and served in that position for 10 years. Then in 2011, she moved to the Winona-Lakeside location and was Lead Teller there for three years. She was promoted to Teller Administrator in 2016 and oversees all tellers at the Winona locations in Goodview, Lakeside, Downtown and Downtown Drive-Up.

“I have had the joy of serving some of our customers for the entire time I’ve been with Merchants – 21 years – and it’s been an honor to get to know them and watch our families grow together,” said Warren. “Tellers are one of the Bank’s greatest assets for serving our customers and I feel it’s my privilege to help develop, and hopefully inspire, every teller on our team.”

Merchants Bank is a full service community bank with 23 bank locations in southeastern Minnesota and west-central Wisconsin and a leasing division, Merchants Bank Equipment Finance, in Edina. Headquartered in Winona, MN, MFGI has more than $2.5 billion in assets. Merchants was founded in 1875. Loans are subject to credit approval. Member FDIC.

Company Update from Greg Evans, CEO: 2nd Quarter, 2021

During the past month, I have had the true privilege of being able to participate in in person gatherings, celebrations and fund-raising events for Winona State University, Winona Health, Winona’s Steamboat Days, Habitat for Humanity, and the Minnesota Bankers Association.

It has never felt so good to have my personal calendar filled up with community engagement activities. It is simply wonderful to be back enjoying the people and organizations who make our service footprint such a special place to live, work and play.

Back to Seeing Smiles in Our Lobbies

In early June, we also celebrated a milestone at Merchants Bank by re-opening all of our physical branch locations to normal activities. After the long and arduous journey of the past 15 months, it is our genuine hope and intent to stay this way.

Thank you for the understanding, patience, and adaptability you have demonstrated with your banking relationship throughout the pandemic. Obviously, all of us faced significant challenges as part of the experience. I’m tremendously proud of the members of the Merchants Bank team for embracing the challenges as opportunities and working unconventionally to meet the needs of our business customers.

Community banking is a people business. When our customers enter one of our branch locations, it’s the people willing to help and serve that they come to visit. While we know our customers now expect the convenient utility of a broad array of digital solutions, the team of bankers at Merchants remains grateful for the opportunity you give us to serve as trusted advisors when you need us. Thank you for favoring us with your loyalty.

Working Through Challenges

One gathering last month that was extra special was my time at the Minnesota Bankers Association annual meeting, when I had the privilege to network with dedicated community bankers across the state. The challenges we faced at Merchants during the past year were the same challenges all banking organizations had to deal with. The industry responded so effectively to those challenges and never wavered in the collective commitment to meeting the emergency needs of our clients and communities throughout the pandemic.

In addition to loan payment deferments and grants that the industry mobilized to provide in support of all customers and communities, the community banks of Minnesota mobilized aggressively and expediently in delivery of Small Business Administration (SBA) Paycheck Protection Program (PPP) loans in effort to support our small businesses and stabilize local economies.

At Merchants, we continued to support the PPP program throughout the first half of 2021 as new funding became available. We originated approximately $80 million in additional PPP loans to our local small businesses during the latest round of funding, which was expanded by the SBA and allowed us to focus more aggressively on helping sole proprietors (including farmers) who deservedly qualified for assistance. Our total PPP origination activity over the course of the last year was more than 3,000 loans for a total of nearly $300 million in origination volume. We now are focused on helping our borrowers and small business owners work through the application process necessary to obtain loan forgiveness.

Recent travel for both business and personal reasons has allowed me to interact with proud small business owners and operators in several different parts of the state. The resiliency of these drivers of our local economies has been amazing. The pandemic undoubtedly took a real toll on virtually every business in some manner. The stimulus that business owners benefitted from along the way was a source of modest stability, but everybody I talk to is eager to get back to business as usual while being cautiously optimistic about the future.

Thank You

The best part of being a community banker is the opportunity to work with business owners and community influencers like you. You and your teams are what make our local economies strong and vibrant. Supporting your hopes and dreams with the financial solutions we offer is what makes this profession especially rewarding to me. Thank you for your resiliency. Best wishes for a healthy rebound as we all transition into whatever our “new normal” is destined to be. Have a great summer, and I sincerely hope our paths will cross at an upcoming community event!

Don’t Find Yourself Fumbling – Set Your Business up to Catch Fraud.

Preventing or catching fraud can feel like a huge task – like keeping track of an influx of orders during your busy season. Being a victim of fraud can not only hurt your bank account, but your business’s reputation too. With this much at stake, make sure you know what security measures to take so you can focus on your customers and keep them a top priority.

Here are our 3 best tips for fraud prevention for your business:

1. Report fraud immediately – do you know that businesses only have a 24-hour window of opportunity to report fraudulent or unauthorized transactions? Businesses are not covered under the same protection that personal accounts are, which mens business owners and staff need to be diligent about monitoring their account activity on a daily basis to help reduce risk and potential loss from fraudulent activity. 

If you have the tools mentioned in our third tip below, then you know it’s as easy as clicking into your notification from an ACH debit filter or Positive Pay and either approving the charge or reporting it as fraudulent – no paperwork, no stopping into the bank to sign anything, just returning the item right away.

If you don’t have those tools, then you’ll want to keep a close eye on your business accounts – if you identify fraud on your business account, it is crucial to report it immediately.  If it is reported and disputed within 24-hours of posting to your account, you’ll likely receive your funds back. However, if it is outside 24-hours, this is not guaranteed. Filing a dispute requires paperwork and in some cases, a police report. These steps make the process a little more time consuming.

If you aren’t able to report the fraudulent charge within 24 hours of it occurring, your bank can still put together the paperwork and try to return the item, but there’s no guarantee that you’ll get your money back. 

2. Have dual-control internal processes – that means checks and balances between your employees’ responsibilities.

Nick Benz, our Treasury Management Sales Officer Lead, has 17 years in the Treasury Management field and is a Certified Treasury Professional (CTP), which means he’s proven mastery of essential business finance functions like liquidity, cash flow and risk management. Nick has seen what works, and how satisfied and relieved businesses are when they catch something before it becomes a bigger problem.

“One of the best ways to prevent fraud is to make sure you have secure, dual-control internal processes in place for when your business makes payments – especially large ones.

“‘Dual-control’ means that making a payment (or other action) has to be reviewed and approved by two people before it is completed. Making sure that a transaction is approved by two or more parties increases your chance of catching any fraud attempts,” Nick said. “Many phishing attempts start as a hacked email address asking a coworker to send a payment – it can be invaluable to have a second set of eyes on a transaction to make sure it is a legitimate request.”

If you’d like more details on where and how to build those internal processes, see our guide from Security Officer, Kerri Bronk.

3. Use tools to make catching fraud easier. Would you rather: check on your business’s transactions every day in online banking, or get a notification when a suspicious check, that you haven’t pre-approved, comes through?

We highly recommend that businesses use fraud management services like Positive Pay and ACH Blocks & Filters. Positive Pay services monitor checks, while ACH filters monitor electronic activity. The fraud management system will automatically let you know when something that needs to be reviewed hits your account. If a transactions happens to be fraudulent or unauthorized, you have the ability to return it immediately.

We’re here to do our best to make your life easier. With tools like Positive Pay and ACH Blocks & Filters, you can find some peace of mind that you’re doing the right things for your business. And when you care about your business’s security, it shows that you care about your customers, employees and other stakeholders.

For more information on how the fraud management services work or how to get set up, contact your local Treasury Management Sales Officer – they’re the first step to enhancing your fraud protection. Our team is always ready to discuss ideas, opportunities and options for your business as we work toward your goals together.

Want to learn more about common business fraud and scams? Check out our Scam & Fraud Alerts for businesses.