Company Update from CEO Greg Evans - April 2024

News | 04.29.2024
This past week, we celebrated the community ownership of our Company by hosting, as we always do in April, the Annual Shareholders Meeting for Merchants Financial Group, Inc. (MFGI). The ownership structure for our Bank is unique relative to the industry and contributes to our differentiation in the marketplace. 

Merchants’ ownership is spread loosely across approximately 800 shareholders. Collectively, the Company’s employees represent the largest “shareholder” through an Employee Stock Ownership Plan (ESOP) that owns 18% as part of the Company’s primary retirement benefit. ESOP companies across many industries tend to perform better than peers because of the elevated employee engagement that results from pride in Company ownership. The remaining 82% of ownership in Merchants is spread out mostly among Winona area families, and business and community leaders throughout our service footprint.      

The majority of the approximately 400 community banks headquartered in Minnesota and Wisconsin are privately-owned, many with controlling interest held by a single family or small number of investors. On the opposite end of the spectrum are the SEC-registered companies traded on the public market exchanges like NASDAQ or the New York Stock Exchange, which would include large national/regional banks that have meaningful presence in Minnesota but generally don’t have a strategic interest in serving the types of markets in which Merchants has branches.

While Merchants is not an SEC-registered company, many of our customers are probably not aware that our stock is, in fact, publicly traded. Public trading in our stock occurs through the Over The Counter (OTC) market exchange, under the symbol MFGI. Trading activity in our stock is very light, mostly because over the years the local families that have maintained an ownership interest in Merchants have been “buy and hold” investors, with the stock repeatedly transferring from one generation to the next. The stock has performed admirably and consistently over decades, and ownership in “the local Bank” is a source of pride with the teammates, customers, friends, and neighbors who make up most of our ownership group.

Our ownership structure contributes significantly to Merchants continued strength and stability. The loyalty of our shareholders is what allows us to focus on doing good and doing right for our customers and our communities. While we embrace our fiduciary responsibility to our shareholders at the highest level and hold ourselves highly accountable for financial performance required to protect our continued independence in a consolidating industry, we are not beholden to interests that prioritize quarter-to-quarter earnings over the fulfillment of our mission to help our customers and communities realize their financial hopes and dreams. 
Community banks like Merchants serve as the backbone of our local economies. Our approach to the business of banking is straight forward: 
  • We know our customers and communities because we’re community members, too.
  • Our customers know their bankers.
  • The access to capital we provide funds “hopes and dreams” that include home ownership, accumulation of wealth, business creation and expansion, job stability, access to community support resources, and contributes to the economic diversity and vibrancy of this region. 
  • Most of our revenue and source of earnings come from direct loans to local businesses, farmers, friends, and neighbors. Providing access to capital for small businesses and commercial development partners in a prudent and conservative manner is why we have been in business here for 149 years. 
  • Our deposit base is the funding source for those loans and our deposit customers have a similar makeup to our loan customers. They’re local people and business-owners like you.

At our Annual Meeting last week, we had three customers share their powerful stories with our Shareholders about how Merchants has made a difference. The testimonials represented a cross-section of our role as a trusted advisor and partner in meeting the needs of independent/family-owned businesses, serving the rich non-profit community we enjoy in our markets, and investing in identified community needs of significance, like affordable housing. 

It was important for our Shareholders to be reminded in a powerful and reaffirming way how much their investment in Merchants matters. Your continued loyalty as a valued client is equally important to our ability to fulfill our mission as a community bank. Your loyalty is not something we take for granted. We will continue to work to earn your trust and confidence every day, but please know how thankful we are for the business relationship you maintain with our Bank.

Community banking is a tremendously rewarding profession. Bringing life to hopes and dreams provides all of us at Merchants a great sense of meaningful purpose. Thank you for giving us the opportunity to demonstrate that purpose in how we serve you. 

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