A 146-year-old Northfield institution will soon be no more.
First National Bank of Northfield, known by history students across the globe as the bank that defeated Jesse James and his gang, is being acquired by Winona-based Merchants Bank. The announcement was made Monday, and is expected to be finalized by year’s end.
The move will provide customers with a wider array of financial services and technology tools, as well as access to Merchants’ 21 branches located throughout southeast Minnesota and west central Minnesota. Both Northfield branches are expected to remain open after the acquisition is complete.
Rick Estenson, First National’s vice president for business development, said the decision, which has been approved by the banks’ boards of directors, was made with an eye on the future.
While it’s a challenging time for small community banks, which, like their larger counterparts, must keep pace with technology, provide cybersecurity, offer an ever-changing array of customer services and adhere to strict federal regulations, Estenson says First National accepted Merchants’ offer during a time of strength. Doing so now, he said, allowed it to select the right partner.
“Our due diligence identified Merchants as an organization absolute in its commitment to shared values of community leadership and strong service culture,” said Dave Shumway, CEO of First National. “We are looking forward to expanding our ability to serve our customers and this community with the additional resources of a larger banking organization.”
Merchants, established in 1875, not only knows the area, said Estenson, Northfield is a perfect fit geographically. Among Merchants’ locations: Lakeville, Apple Valley, Cannon Falls, Cottage Grove, Hampton, Hastings, Red Wing, Rochester and Rosemount.
It also has “great experience with the ag community,” Estenson said.
“We are thrilled with the opportunity to be joining the Northfield community and continuing First National Bank’s tradition of high-quality customer service and community involvement,” said Gregory M. Evans, president & CEO of Merchants Financial Group, Inc. “We are also humbled by the stewardship responsibility that comes with ensuring First National’s legacy with its customers and the community will continue to be nurtured and never forgotten.
“Merchants’ success has come from our commitment to community banking, center on the fundamental understanding that when our communities and customers thrive, Merchants will prosper as well. The partnership with First National aligns perfectly in terms of culture, and our strategic plan for the expansion of the bank’s strong community bank brand throughout this region.”
Evans on Monday had praise for all First National employees he’s met and plans to be on site two days this week and one next to get to know the Northfield staff better.
While Evans said it’s Merchants’ intent to retain as many employees as it can, he pointed to its 2007 acquisition of First National Bank in Cannon Falls as evidence of its commitment to its people.
“Most of the [Cannon Falls] employees from the time of acquisition are still with us,” he said, later adding, “The people are always what make a successful organization in my opinion in this industry.”
Under the terms of the agreement, Merchants Financial Group Inc. will acquire any outstanding stock of First National Bank of Northfield in all cash transactions. The amount of the sale was not disclosed.
First National Bank of Northfield has $207 million in assets, $157 million in loans (plus an additional $60 million in sold loan participations) and $183 million in deposits.
Merchants Bank, member FDIC, is a full service community bank. Merchants Bank Equipment Finance, a commercial lease financing division, is located in the Twin Cities and services clients throughout the United States. In keeping with the bank’s commitment of community leadership, in 2018 Merchants employees volunteered 14,953 hours to 286 organizations and contributed nearly $680,000, or 2.6%, of pre-tax income to more than 500 organizations throughout the service footprint. The bank is the fifth-largest banking organization headquartered in the state of Minnesota, with more than $1.75 billion in assets.
The agreement is subject to Heywood Bancshares shareholder and regulatory agency approval.
Customers should see little change other than the name, said Estenson, noting it and the 1876 robbery in which townsfolk banded together to defeat the notorious bandits, are an integral part of Northfield’s identity.
“We, too, are disappointed that we are going to lose the name [of First National Bank of Northfield], we are grateful that the site is fully entrenched in Northfield history,” he said, referring to the robbery site at 408 Division St. “Merchants has a deep history as well and has shown respect for what this means to Northfield”
Evans said that Merchants plans to find ways to “celebrate” the First National Bank of Northfield name and look for ways to permanently memorialize it.
“We don’t take for granted how important that is in the Northfield community,” he said.