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.

From the President’s Desk: First Quarter 2017 Edition

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By Greg Evans, President and CEO

In today’s commoditized banking arena, we know we must continue to find value-added ways to differentiate Merchants from a myriad of traditional bank and non-bank competitors. Our primary differentiators are aligned with the community banking business model we deploy.

Our community banking model includes our commitment to deliver an unparalleled level of personalized service and care to our customers. We choose to staff our local market branches in a manner that allows us to deliver on our brand promise to be the Bank that Service Built. The staffing model also includes our commitment to having Market Presidents who are empowered and required to deliver on an expectation of community engagement and leadership.

Another aspect of our Brand that I believe is a differentiator is our ownership structure. One thing that I’ve come to realize is that many of our customers are not aware that Merchants is a publicly-traded Company. That might seem somewhat irrelevant, but the ownership structure of the Merchants organization is unique, and has absolutely contributed to our business success over our history of more than 140 years.

Our employees own approximately 18% of the organization through an Employee Stock Ownership plan. Pride of ownership on the part of our employees helps drive the commitment we make to serving you in a manner that results in customer loyalty and business growth.

In addition to being an employee-owned Company, the balance of the ownership structure for Merchants is loosely held by approximately 600 individuals and organizations, mostly in the form of friends, neighbors and business leaders throughout our service area footprint. Our stock is available to anybody who might be motivated to take an ownership interest. Merchants Financial Group, Inc., shares are traded over the counter (OTC) under the symbol MFGI. If you would personally have an interest in acquiring Merchants stock, contact Merchants Bank for more information.

I personally take a great deal of pride in having an ownership interest in our Company, but value even more greatly the fact that ownership is comprised of my teammates and business leaders in our communities that I have a tremendous amount of respect for. I do believe this ownership structure has been critical to our long-term success.

The long-time loyalty of our shareholders has allowed us stay the course with an intense focus on slow, steady growth. In addition to holding management accountable for meeting financial performance expectations, our shareholders also have high expectations for us to deliver on community leadership responsibilities. As customers, they also demand a high level of personalized service and attention to their many banking needs.

This ownership structure really is a differentiator for Merchants. It allows management to take a disciplined approach to strategic thinking, one that allows a long-term focus. Local ownership is a strength of the Merchants Brand. If you have an interest in becoming another of our local Shareholders, contact Merchants Bank for more information.

Merchants Financial Group, Inc. Reports Record Year to Shareholders and Appoints Directors

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Greg Evans, President & CEO

During its annual meeting Thursday, the shareholders of Merchants Financial Group, Inc. (MFGI) heard about the organization’s second consecutive record year, re-elected two Directors and elected a new Director to the MFGI Board of Directors.

Re-elected to three-year terms as Directors were: Kenneth J. Mogren, Retired President Winona Agency, Inc., and Richard T. Lommen, Jr., President/Owner Courtesy Corporation. Elected to a three-year term was Gregory M. Evans, President & Chief Executive Officer, Merchants Financial Group. Also recognized was Rodney R. Nelson, who retired as MFGI President & CEO and the MFGI Board at the end of January, 2017. Evans succeeded Nelson. Also recognized for his long service was MFGI Director David H. Keller, Retired President Lucas Body Systems, NA. Keller retired in 2016 after 31 years of service to the MFGI Board, including more than 15 as Board Chairman.

“One of the reasons we were able to experience a second consecutive record year has been the leadership of the MFGI Board of Directors and the leadership Rod exhibited as MFGI President and CEO,” Evans said. “With the support of our customers, shareholders and employees, we look forward to meeting our responsibility to continue to grow this exceptional community banking organization.”

During the meeting, Evans formally reported MFGI’s 2016 record year of $14,154,891 in net income, surpassing 2015’s record year if $13,454,698. Other high points reported were a loan growth increase of 6.8% over 2015. Deposits increased by 9.1% and MFGI’s share price grew 27.25% in 2016, ending 2016 at $54.50 per share. Total assets ended 2016 at $1.623 billion.

“Our shareholders provide all of us with exceptional support,” Evans said. “We are fortunate to be able to formally celebrate our achievements with them and look forward to the year ahead.”

Evans, Chief Financial Officer Sue Savat, and Chief Credit Officer Mark McGrory were featured speakers during the meeting.

MFGI owns 21 Merchants Bank locations, including 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. All banks are FDIC members and equal housing lenders. Additionally, MFGI also owns Twin Cities-based Merchants Bank Equipment Finance, a division of Merchants Bank, N.A.

The ownership of Merchants Financial Group is made up of its more than 440 employees and its shareholders, mostly individuals and families from southeastern Minnesota and west-central Wisconsin.

Greg Evans Appointed Merchants Bank President/Chief Banking Officer

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Greg Evans, President/Chief Banking Officer

Greg Evans has been appointed Merchants Bank President/Chief Banking Officer, according to Rod Nelson, Merchants Bank President and Executive Vice President of Merchants Financial Group, Inc. (MFGI).

“Greg is a true community banker. He gets involved in the community and provides leadership for community efforts. We look forward to him sharing this leadership with all of our locations,” Nelson said. “He is passionate about providing the very best customer service, and his focus on building customer relationships will contribute to our organization being even more successful in the future.

Evans is a Winona native and spent the first 18 years of his banking career in Winona, ending as the Senior Vice President of Marketing before moving to Cannon Falls in 2007, where he currently serves as Merchants Bank’s northern regional president with oversight of the Cannon Falls, Red Wing and Hampton locations.

“I am grateful, humbled, and excited for the opportunity,” Evans said. “I’ve been fortunate over my time with Merchants to work closely with most of the employees throughout the organization. They are talented, energetic, and they care about our customers and the communities they serve.

Nelson will be succeeding Richard L. Mahoney as MFGI President & CEO as of January 1. A date has yet to be set for Evans to take over his new role, which will include a broader role in providing direction and oversight to all of Merchants Bank’s 20 locations. With the help of a national search firm, Merchants Bank conducted an intensive search for the position

“Perhaps most important to me is our corporate culture. That is the true defining aspect of what makes any business great, and that will stay in place,” Evans said.