Spotlight On: Greg Evans, President & CEO, Merchants Bank
October 2024 — Merchants Bank’s vision is to be the choice for “independent family-owned businesses where I think we bring the most value and where we shine in terms of what matters to those customers,” says Greg Evans, president and CEO. Evans spoke with Invest: about growth opportunities, attracting and retaining talent, and the future of community banks.
What are the overall contributions of Merchants Bank within the region in this past year?
The story of merchants continues to be one of success. The current environment is probably not great for the industry as a whole, and certainly, Merchants Bank is not immune from economic pressure, rising interest rates, bank failures in 2023, and tightened liquidity. There are a lot of headwinds for the industry as a whole, but Merchants’ prudent, conservative, middle-of-the-road approach to community banking has positioned this company to be successful in any cycle, and that continues to be the case. Tightened liquidity and high-yielding opportunities to our loyal deposit customers, especially some of our corporate and municipal customers for which we continue to be the primary depository, has been key. But some of the excess liquidity that they maintained with our bank was either stimulus that has been spent down or reinvested in their businesses or their operations.
We’re back to banking as normal, pre COVID. The priority focus is on growing the core funding franchise because deposits represent the raw material with which we provide our customers, our communities, and our businesses with the access to capital that they need.
What makes Minneapolis-Saint Paul an ideal location for business expansions or relocations?
The economic climate in the Twin Cities continues to be fairly robust. Overall capital investment and growth in capital investment throughout that particular market area has slowed to some degree, but it remains a vibrant market area, rich with growth opportunities. Merchants’ position in that market is niche-focused. A big part of our core franchise is in outstate Southeastern Minnesota. However, the Twin Cities market area is a healthy diversification in terms of our strategic approach to business growth.
We can be selective. We’re not positioned to be the bank for everybody in the Twin Cities, but we are uniquely positioned as a community bank with size and scale, capable of delivering all of the solutions that virtually any provider serving that market is positioned to provide.
We can do it for those customers who see the true value in having a trusted advisor in the form of their banker; a personal customer relationship management partnership with our bankers. It’s that value proposition that we deliver in the form of our bankers as trusted advisors, being clear about who we are capable of delivering real value to.
The Twin Cities market area just gives us a rich abundance of those opportunities. We’re primarily located in the Southern fringe of the Twin Cities. But we have some relevance with entrepreneurs, commercial real estate developers, and capitalists throughout the Metro area. We’re selective about the relationships that we take on.
The Twin Cities are aggressively banked because it is an attractive market in terms of one of the most significant drivers of economic growth in the state of Minnesota. I think we’re uniquely positioned with all the solutions and services, most notably in the treasury management space, and deliver it with a differentiated level of personalized service and relationship management.
Are there any particular sectors where you’re seeing more demand or more growth opportunities for you to tap into?
Up until probably the last twelve months, there was an explosion of commercial real estate development, especially in the multifamily housing space. We’ve taken advantage of some of those opportunities. Our true niche and where we bring the most value is to smaller businesses, more traditional commercial and industrial enterprises, and those businesses that are represented in the communities where we have established our branch footprint, as being true local community drivers of economic vitality: Lakeville, Rosemount, Apple Valley, Hastings and Cottage Grove. Rosemount, specifically, is poised for residential development growth.
Because of our intense focus and expertise in residential mortgage lending, that’s a natural fit for us on the retail side. But those independent family-owned businesses are where I think we bring the most value and where we shine in terms of what matters to those customers in terms of their hopes and dreams and the hopes and dreams of their families and their employees.
How are you focusing on attracting and retaining talent?
We focus a lot of time, energy, and resource capacity on employee engagement and orientation. We have this service orientation and this servant leadership focus that brings real value to our customers, but we leverage those same core values and those same principles of servant leadership in terms of how we engage our employee teams, and how we onboard employees.
Finding talent is harder, but we have a powerful story to tell. The opportunity for employee ownership is a real part of that story and something that we leverage in both the recruitment process and then just the ongoing engagement process in terms of the fact that the people who work here are not renters in this business. They have an ownership stake, and their contributions to our success pay directly in the form of tangible dividends when our shareholders benefit from our performance.
How are you implementing any additions in technology for customer experience, but also to create efficiencies within?
Our technology spending over the last six to eight years has increased significantly. Accelerating our technology spend is not optional if we are going to continue to earn our independence. We have to be able to deliver the utility of digital solutions as if we had unlimited resources to spend on technology, which for a company of our size, we do not.
We also have to be fairly precise in how we prioritize and where we’re making those spends. We do have projects in flight that will allow us to deliver to our customers and within our communities the digital ability to open new deposit accounts online, and open and have fulfillment of consumer credit products online.
That isn’t real cutting-edge technology, but for community banks, the investments are real. It’s not insignificant in terms of the ability to implement those solutions. These are not intended to be drivers of an expanded market area. These are to deliver utility to customers, prospects, friends, and neighbors in our communities where the brand relevance and the reputation of the company are already strong.
One thing that I think is relevant in the Twin Cities is that a lot of the spending over the last two to three years has been to propel forward our competitive positioning in the form of commercial and corporate treasury management, digital products, and services.
We’ve added several solutions that allow us to be more relevant as a bank of choice for larger companies. The solution suite that we offer today in the commercial and treasury management space compares favorably with almost any financial institution serving the Twin Cities market area. We are doing the same with the value-added service and support that comes with our relationship management focus on the treasury management side, and typically at a lower price point for those solutions than many of the bigger banks are charging their customers.
What is your outlook and the future of community banks like yours?
There’s no guarantee. We have to earn it every day, and earning it requires the investments that we’ve already talked about. We have to be relevant to banker talent. We need to have a powerful story to tell because it’s still our people who, at the end of the day, deliver on the value proposition in our communities and to our clients.
We’ve had a wonderful run here in the last two to three years of attracting well-trained, highly experienced bankers with a lot of solution expertise from larger institutions. They recognize that our story is powerful, and they’re joining an organization where they can have a profound impact and make a difference in the lives of our customers, and in terms of the overall performance of the institution. Our head of treasury management came to us from a big bank. Our regional presidents for the North region, which includes the Twin Cities, and the South region, which includes the markets of La Crosse Township and Rochester, both joined us from big banks. Some of those have been within the last couple of years. What we can now deliver is on par with the big banks.
For more information, please visit:
