Minnesota-based Merchants Bank makes a move

Northwestern Financial Review, May 1-May 14, 2005 by Dullum, Justin

Merchants Bank officially opened a 13,500-square-foot branch in Lakeville, Minn., on March 22. "We've waited a long time for opening day," said Pat Farrington, president for the group of Merchants Bank locations in the Twin Cities area. Farrington said the bank entered Lakeville because of the area's growth. Lakeville is an outer suburb south of Minneapolis.

"The pace of its expansion is remarkable," he said. "They recently put in a second high school, and a number of industrial parks have sprung up. We think there is a lot of opportunity."

Bob O'Brien, who recently joined the Merchants organization and brings 30 years of community banking experience to the effort, will manage the branch.

"It's a very competitive field," said O'Brien. "There are at least 15 other banks here, and every one of them offers the same products and services. We can't say we offer different services, but we hope to be able to take better care of clients. When my customers leave this lobby, I want them to remember they were here."

O'Brien, who can "see Lakeville from my front porch in Burnsville," said he intends to leverage the relationships he's cultivated in the area.

"I was a commercial lender for many years and built around that. Now my new role is more as a contact person and community builder. My role is mentor and coach."

Merchants Bank in Lakeville will operate as a branch of the $694 million Merchants Financial Group's Twin Cities Charter, which commands $74 million in assets. The Winona, Minn., holding company holds four Minnesota charters, one Wisconsin charter, and operates 15 offices.

"The separate charters allow us to operate autonomously," said Farrington. "It's more expensive to work this way, but we think it's worth it."

Bank serving Iowa and Illinois enters Minneapolis

Bettendorf, Iowa-based National Bancshares, Inc., the holding company of THE National Bank, has made a move into the Minneapolis area. Its new Edina bank will operate under a separate de novo charter.

"A lot of banks have moved into the region because it is an excellent market," said Perry Hansen, chairman and chief executive officer of THE National Bank, Bettendorf, and a director of National Bancshares, Inc. "And even considering the good number of new banks filling the market and shifting within the market, a number of recent regional franchise buyouts have opened up even more opportunity for community banks."

The bank raised $9 million in start-up capital, said Hansen. "We'll have a nice loan limit to start this thing out. Along with our bank's strong parent company, we're confident we can fuel the capital growth," he said. Hansen expects the new bank to break the $100 million mark in three to five years.

The bank will focus on small- and medium-sized business customers, and aggressively develop its mortgage lending portfolio. "We've put together a team of four seasoned mortgage professionals," said Hansen. "We feel that market niche is open for the way we do business."

Importantly, said Hansen, a separate charter affords the bank regulatory flexibility.

"We feel that it makes the bank responsive," he said. "We started this process last year with the OCC, FDIC, and Federal Reserve. That entire experience was positive and reinforces our view that a new charter can do much better within a market and with regulation."

Donald Ackerman will serve as president of the new bank, which embarks into business with 16 employees.

The $406 million National Bancshares, Inc., operates three offices in Iowa and nine in Illinois.

Montana Bank completes two acquisitions

Glacier Bancorp, Inc., Kalispell, Mont., has completed the acquisition of Citizens Bank Holding Company in Pocatello, Idaho, and its commercial bank subsidiary, Citizens Community Bank. Citizens has assets of approximately $113 million and three offices. The bank will operate as a separately chartered subsidiary of Glacier, and retain its name and brand.

"This is a very well run bank that is located in two of Idaho's leading markets - a market where we have desired a presence for some time," said Mick Blodnick, Glacier's president.

The deal, which was finalized on April 1, comes on the heals of Glacier's March 1 acquisition of First Nation Banks -West Co., Evanston, Wyo., the $243 million holding company of First National Bank - West. First National Banks held seven locations in western Wyoming.

"We believe that George McKinley [president, First National Bank - West] and his team have done a great job in growing the franchise and establishing FNB as one of Wyoming's strongest banks," said Blodnick.

Blodnick said the Idaho merger geographically fits, "very nicely with our expansion into western Wyoming, which is benefiting from significant energy development and strong growth in recreational building."

Glacier Bancorp, Inc. is a $3 billion parent company with seven community bank subsidiaries. Its market includes Idaho, Utah, Washington, Wyoming and Montana.