Behind the Scenes with Our Credit Team

 

Startup Stock Photos

If you’ve worked with Merchants on a loan for your business, you know our Commercial Bankers have a team of people assisting them in the loan process. You may have even heard them mention a Credit Analyst, who would review your financial information.

Our Credit Analyst team plays an important part in the loan approval process. So we’re giving you a behind the scenes look at their role and what kind of expertise they bring to our commercial banking team.

How is a Credit Analyst involved in my application for a business loan?
Our team of 11 Credit Analysts assist in determining your credit worthiness and ability to pay back a loan. Upon application, your financial information is given to a Credit Analyst, who reviews all the details and provides a credit presentation to your Commercial Banker.

“Our job is to assess repayment ability of credit obligations and determine overall financial risk. This information helps the Commercial Banker decide on next steps,” said Chris Duellman, SBA Lending and Credit Underwriting Manager. “Our ultimate goal is to help the borrower gain loan approval, but we also need to identify potential risks – that’s why we review so many details about the business and business owners. We look at the full picture to create our report to the Commercial Banker.”

In some instances, you may also meet with one of our Credit Analysts and a Commercial Banker to collect your financial information. A face-to-face conversation is sometimes the best approach to obtaining all the details needed to gain a full understanding of your business.

What expertise does a Credit Analyst bring to the business banking team?
Most of our Credit Analysts have an accounting or finance degree and/or related job experience. In addition, they are well-trained on all different types of credit to be able to fully assess your business’s situation. Day in and day out, they work with the financial details of businesses of every size and industry – their incredible depth of knowledge is an asset to you, your Banker and the entire commercial banking team.

Because Merchants Bank provides many loans for agricultural businesses and farms, three of our Credit Analysts specifically concentrate on ag requests. Having grown up on farms or worked on farms, these Credit Analysts provide an additional level of expertise and insight when reviewing an ag loan.

How do I benefit from a Credit Analyst reviewing my loan application?
Talking with your Commercial Banker and Credit Analysts can give you more insight into the financial side of your business.

While gathering your financial information, the Credit Analysts may ask questions your business might not have ever considered. Or, the Analysts might even pinpoint some financial areas where your business could make improvements by working with your accountant or in-house finance department. In addition, tapping into the Credit Analyst industry-specific knowledge can be a bonus for your business.

“We’re here to provide an additional level of financial understanding and support to both the business and the Commercial Banker,” said Duellman. “It’s our job as part of the commercial banking team to help our business customers thrive.”

To learn more about business financing options at Merchants Bank, visit our website:

From the President’s Desk: Fall 2017

Greg Evans, Merchants Bank President & CEO

By Greg Evans, President & CEO

A few weeks ago, Merchants Bank was featured prominently in a Sunday news feature in the Business section of the Star Tribune newspaper. I sincerely appreciate the response I have personally received from so many friends and Bank customers about the exposure for the Merchants organization.

It’s gratifying to be associated with a company that is recognized throughout the state of Minnesota as a leader in our industry. The extraordinary business growth that Merchants has enjoyed over a period of many years was one of the reasons the Star Tribune reached out to us for purpose of doing the story.

The story focused on two primary things:

  • What has been the formula for our sustained track record of success
  • What perspective does our organization have in regards to the regulatory environment we operate in and what, if any, reform is appropriate for the banking industry

Addressing the first topic of the interview was the easy part. As I’ve already shared with you in previous submissions to our E-newsletter, our success is driven 100% by our people. At Merchants, we have made talent acquisition, retention and development a critical strategic priority. Nobody on our Merchants team is perfect, but we are purposeful in filling our team with difference-makers, people capable of providing great customer service and demonstrating community leadership.

Everybody on our team understands the importance of living up to our brand promise of being the Bank that Service Built. When we fall short of meeting our customers’ expectations, as we at times do, our goal is to learn from our mistakes and take the opportunity to get better.

Something that does create conflict at times with our intense desire to be customer-centric in all that we do is regulatory requirements. As I shared in the Star Tribune article, I do believe strongly that the banking industry – particularly the community banking sector – is over-regulated.

There is no question that there was a need for reform coming out of the Great Recession, and that increased regulation was enacted with the hope of protecting consumers. Unfortunately, corrective action resulted in unintended consequences associated with intense regulatory burden. As you may have experienced yourself, getting loans is more cumbersome, more costly and more onerous in terms of documentation today than prior to these regulations.

I believe strongly there needs to be some regulatory burden normalization. The reality is that for Merchants Bank we are fortunate to be of adequate size to absorb the additional burden and stay the course in being a major contributor to the economic vitality of our communities and this region. We have been able to put processes and best practices in place to help our customers work through documentation requirements. We rely on our team members to understand the impact of regulations and guide customers step-by-step through borrowing transactions.

In the community bank space, I believe we are driven to be as customer-centric as we can be in light of regulatory requirements. Banks like Merchants… with significant presence in outstate markets… are tremendous drivers of the economic vitality of the communities we serve. Playing that important role is one of the most rewarding things about this profession. The work we get to do each day allows us to have a powerful impact in changing people’s lives in positive ways.

The Best Home Projects to Finish Now

Backyard Deck

If you’ve been considering an outdoor house project, now’s the time to get it done. From decks, to driveways and roof replacements, it’s important to finish up these popular projects before the snow falls.

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Connie Fort, Vice President of Consumer Loans

“Many local homeowners come in at this time of the year to get financing to wrap up a project or two,” said Connie Fort, Vice President of Consumer Loans. “I truly enjoy finding affordable financing options for their home projects.”

To help you decide where to focus your dollars, here are cost estimates and what to consider for four projects that can be impacted by cold weather.

  1. Building or Repairing a Deck
    Average Cost to Build – $6,973*
    Average Cost to Repair – $1,490

A new deck adds value to your home – plus who doesn’t love another way to enjoy Minnesota and Wisconsin summers?

The cost of building or repairing a deck depends on several factors: size, materials, and extras such as stairs, railings or staining. To help you make an accurate estimate, consider that the average deck size is 10×12 feet and most deck builders charge an average of $35 per square foot. 

  1. Replacing a Roof
    Average Cost – $7,092*

Maintaining the quality of your roof is critical to keep your home protected and dry. Winter weather especially can aggravate small leaks and other problems, so take the time to assess your roof now.

If replacing your roof is necessary, there are several factors that impact the overall cost including size, pitch, materials, code requirements and special features like skylights or chimneys.

Make sure to get quotes from several different roofers so you have a solid price range for your potential cost. Be cautious of any business that bids extremely low – it’s most likely too good to be true.

  1. Installing Landscaping
    Average Cost – $3,328*

Whether you’ve moved into a new home or want to upgrade the look of your existing lawn and outdoor area, landscaping can be a great way to give your house a facelift.

When it comes to your landscaping projects, costs range based on how big your project will be and the size of your property. For example, are you simply looking to add some color with flowers or are you removing trees? Each piece of your project may involve hiring one or more professionals, so consider if you’ll need help with designing a garden, installing a patio, or even adding a water and irrigation system.

  1. Replacing or Adding a Driveway
    Average Cost – $3,916*

Having a driveway can be a huge convenience for you as a homeowner and can also add value to your house.

Durability is the biggest and most important factor when making decisions about your new driveway. Make sure you pay attention to which materials make sense for your landscape, climate and the amount of work you’re willing to put in to maintain the driveway. A professional can help steer you in the right direction based on your situation.

So now that you’ve settled on which home improvement project you’ll tackle this fall, how can you pay for it? At Merchants Bank, our Home Equity Line of Credit can help qualified applicants pay for fall home improvements or repairs. If you have equity in your home, now is the time to take advantage of our great introductory rate of as low as 2.9% APR for the first six months and 4.00% APR after that.**

Contact your local Merchants Bank Personal Banker to get started, or apply online now.

*http://www.homeadvisor.com/cost

**Subject to credit approval. As of June 15, 2017, the Annual Percentage Rate on a home equity line of credit with an 80% or less loan-to-value and a credit score greater than or equal to 700 was 4.00%. This special offer has fixed-rate pricing as low as 2.9% APR for the first six months, based on relationship reward discounts. Following that six-month period, the rate will become variable, subject to change, based on U.S. Bank, N.A., prime rate plus a margin that is determined based on the loan-to-value in your home and your credit score at the time of application. Current rates vary from 4.00% to 6.75% APR. Maximum possible APR is 18%. Minimum possible APR is 4.00% An origination fee may apply, in addition, you are responsible for certain fees to third parties, such as appraisers, credit reporting firms and government agencies, which are generally from $100–$1,000. Following the first year, there will be an annual fee of $25. Offer available on new home equity lines of $10,000 or more only or on existing lines of credit with an increase of at least $10,000. Consult your tax advisor regarding the deductibility of interest expense. Property insurance will be required. Limited time offer.

Andrew Guzzo Joins Merchants Bank as Regional President

Andrew Guzzo, Merchants Bank Regional President

Andrew Guzzo has joined Merchants Bank as Regional President, according to Merchants Financial Group, Inc. (MFGI) President & CEO Greg Evans.

Evans said Guzzo’s primary responsibility will be to provide leadership for Merchants Bank’s Winona locations, along with meaningful community engagement for the Winona area. Additionally, Guzzo will have supervisory responsibility for the strong team of Market Presidents in Onalaska and Eau Claire, WI, and Minnesota locations in La Crescent, Caledonia, Spring Grove, St. Charles, Rushford and Lanesboro. He will have a presence in all of the markets for the southern tier of Merchants’ service footprint.

“We are excited to have Andrew leading our team in the region,”Evans said.  “Andrew brings an intense passion for customer service and community leadership. He also has had significant sales and management experience, both outside and inside the banking industry. We believe his skill set is the right mix to help facilitate our continued growth for our community banking organization.”

Guzzo has spent the past 11 years in the banking industry, working for American Bank & Trust in the Quad Cities (Iowa/Illinois) area, and most recently leading NXT Bank in Cedar Rapids, Iowa. Prior to that, he had more than 15 years of sales and sales management experience for US Foods.

“I look forward to helping to establish, build and grow long-term customer relationships around our region,” Guzzo said. “By every measure, Merchants Bank’s enviable culture and customer-centric commitment to the communities it serves continues to raise the bar among community banks across the region. I am humbled by the responsibility to customers and shareholders and excited at the possibilities that come from working with this team.”

Guzzo and his wife, Dawn, have four children, two boys and two girls.

The Merchants organization has reached record earnings each of the past two years and is tracking for another significant year in 2017.

Since the retirement of former MFGI President & CEO Rod Nelson in January, Evans has been serving as the Winona Bank President, as well as overseeing the banking operations for all of Merchants Bank’s 21 locations, in addition to his role as MFGI President and CEO.

With the addition of Guzzo, Merchants will have three regional presidents reporting to Evans – Guzzo for the Winona and Southern region, Dan Massett for the Central Region and Lawrence Stovern for the Twin Cities Region. Evans points out that all are supported by local presidents who have decision making responsibilities in their markets.

“Real local decision making is one way we stand apart from others in our industry. It allows our local leaders to positively influence the people and the communities they serve,” Evans said. “We recognize it is a unique model, but it best serves our customers.”

Leading Merchants’ locations in the region are: Steve Christiansen in Onalaska and La Crescent, Matt Schuldt in Caledonia and Spring Grove, Larry Accola in Eau Claire, Ken Graner in Lanesboro and Rushford, and Jim Allen in St. Charles.

MFGI owns Minnesota locations in Winona, St. Charles, Goodview, Rochester, Rushford, Lanesboro, Caledonia, La Crescent, Spring Grove, Cannon Falls, Red Wing, Hampton, and the southern Twin Cities metropolitan suburbs of Apple Valley, Cottage Grove, Hastings, Lakeville and Rosemount. Merchants has Wisconsin locations in Eau Claire and Onalaska. Additionally, MFGI also owns Twin Cities-based Merchants Bank Equipment Finance, a division of Merchants Bank, N.A.

Our Community Banking Commitment

PresidentsFeature

A few weeks ago, Merchants Bank was recognized by the Winona Area Chamber of Commerce at its annual Business Celebration Luncheon as the Business of the Year for 2017. Eligibility for this distinction was based on a comprehensive assessment of outstanding achievement in all five of these categories:

  • Economic Development
  • Workforce Development
  • Environmental Awareness
  • Business Achievement
  • Community Engagement

While this specific recognition was isolated to Merchants’ contributions to the vitality of the Greater Winona area, the documented achievement for the categories identified above as part of the nomination process was based on the collective team effort that is contributed to by every one of my teammates in each of our markets throughout the entire region.

At Merchants, we do what we do not for the purpose of accolades and recognition, but simply to contribute to the economic well-being of our communities and the financial success of our clients. That said, we sincerely appreciate this recognition by the Winona Area Chamber of Commerce. Most gratifying was the fact that quantifiable achievements in each of the five categories of the nomination was representative of business as usual for the Merchants organization during the past year, not the result of nonrecurring incidents of extraordinary achievement.

In accepting the award at the recognition banquet in May, I articulated that at Merchants we have a fundamental philosophy as it relates to our commitment to community banking: Simply, we know that when our clients and communities thrive and prosper, we, too, will do well. That approach has served us well for more than 140 years, and it’s what drives the commitments we make to providing active community leadership.

It’s an appropriate time of the year to share with you the importance we place on active community involvement and engaged leadership in each of our markets. With the arrival of summer, it becomes festival season for this entire region. That means you won’t have to look real hard to see visible signs of the extraordinary involvement in community activities that all of us at Merchants take great pride in demonstrating.

Community leadership is a critical differentiating component of the Merchants Brand. The members of our employee team are truly humbled by the opportunity we have to serve the needs of our clients and communities. Again, when our clients and communities prosper, we know we, too, will do well. And in the case of the recent Chamber award, I would add that when one wins, we all win! Thank you for your continued trust and confidence. It’s your loyalty that allows us to continue to do great work in our communities!

Fraud and Scam Updates for May

Fraud-Blog

Review our most recent fraud alerts and updates to help keep your personal information secure. Want to be automatically updated about recent scams and fraud? Sign up for our Alerts emails here: http://bit.ly/1G1dF0n

Internal Revenue Service Scam

Some of our customers have fallen for a recent scam involving fraudsters posing as employees from the Internal Revenue Service (IRS). The fraudster will call you – stating to be an Internal Revenue Service employee – and claim you owe back taxes, which can be paid via wire transfer.

The truth is that the IRS does not use phone calls to make personal contacts. If the IRS wants to contact you, they will send a letter first. If you receive a phone call from an individual claiming to be from the IRS, it is a scam. For more information on how and when the IRS might contact you, see these two articles from the Federal Trade Commission:

Check Fraud

Merchants has recently seen an increase in fraudulent checks. Customers have fallen for some “too good to be true” scenarios including being asked to be a secret shopper for a fake business or receiving a winnings check in the mail from a drawing they did not enter. When you receive a check, make sure to consider where it came from.

Some questions to ask yourself:

  • Did I recently enter any contests or drawings where I could win money?
  • Can I verify the information on the check through a third-party? For example, can you confirm a person’s contact information through the phone book? Or confirm a business’s information through an online directory like the Yellow Pages?
  • Does it sound too good to be true?

Be a skeptic. If the situation doesn’t sound right, it’s time to do some more investigating before depositing that check. For more information, read this article on check fraud from the Federal Trade Commission.

Next Steps If You’ve Experienced Fraud

If you think your bank account information has been compromised or you are a victim of identity theft, contact your local Merchants Bank and ask to speak to a Customer Service Representative.

Your Top HELOC Questions Answered

HELOC-Blog2

You may be able to use the equity in your home to your advantage with a Home Equity Line of Credit (HELOC). While the idea sounds simple, HELOCs can be confusing. Get the basics here.

What is a difference between a Second Mortgage and a HELOC?
There are two types of loans that use the equity in your home as collateral. They are either a Second Mortgage (also known as a Home Equity Loan) or a Home Equity Line of Credit.

A Second Mortgage, or Home Equity Loan, is simply borrowing money, using the equity in your home to secure the loan, much as a personal loan may use the equity in a car to secure the loan.

Home Equity Line of Credit is a revolving loan that works very much like a credit card. The equity you have in your home secures a credit line with a variable interest rate that is available to you for a certain amount of time. The monthly payments are determined by how much money you owe the bank, not by how big the line of credit is. As you pay down the amount you owe on your line of credit, the rest is available for other uses. The line of credit works well for do-it-yourself projects or a series of projects because you only make payments on the money you’ve already used.

Each loan works differently and which one may be best for you is often determined by your purpose for taking out the loan. The interest rate the bank charges on these loans typically takes several factors into account, such as your credit score, the loan to value or the loan type.

What is Loan-to-Value?
As mentioned above, loan-to-value is one of the factors taken into consideration when determining the loan interest rate. To calculate your loan-to-value, add the amount you want to borrow to the unpaid balance of your mortgage then divide that number by the appraised value of your home. The result will be a percentage that is referred to as the Loan-to-Value of your home. The lower the percentage, the lower your interest rate may be. 

Can I borrow more than the value of my home?
While some mortgage lenders offer loans that often will go over 100% of your home’s value, we don’t think it’s a good idea. Borrowing in that manner will make it difficult, if not impossible, to sell your home should you want, or need to move.

Can I use a HELOC for something other than home improvements?
Yes. A Home Equity Line of Credit can be a great way to get that new roof or finally finish the lower level, but it can also be used to buy a new car or to pay for a college education.

The flexibility of a HELOC means you can make your home equity work for current financial needs. In addition, the interest you pay may be deductible on your federal tax return. The interest you pay on car loans, credit cards and almost all other loans definitely is not. We suggest you consult your tax advisor regarding interest deductibility.

What’s the next step?
If you’re interested in learning more, check out these HELOC resources: