June 3, 2009 — Two-year-old St. Thomas-based Merchants Commercial Bank is growing, according to an audit of 2008 numbers last week.
Up by $19 million in its loan portfolio, the homegrown institution is up to $61 million in total assets, according to a statement from the bank.
"The audit reflects deposit growth of $16 million due to its Federal Deposit Insurance Corporation insured status and the expansion of its product offering which now includes Merchant Card Services, ATM/Debit Cards, and Free Internet Banking," according to the release. FDIC insurance was recently upped from $100,000 to $250,000 until 2013.
The performance from such a young bank flies in the face of statistics for U.S.-owned banks in the economic downturn, but the bank sees this as an auspicious time to be in business.
"We view it as an extremely opportune time to be in a business where you are offering value-added," Ro Khiani, the bank’s vice president, said. "This is a time [when] more than anything that people are looking for value and service and things of that nature for basic needs such as banking. Not only have we ridden out the storm, we have done better than most would have expected as a new institution in this environment.
"We believe that if you treat the customer well, you make yourself accessible and you respond quickly and little things like that will make people want to bank with you," he said.
The bank is keeping its goals modest. It has moved its Port of Sale location into the Tutu Park building.
"We wanted to have a metered approach to growth," Khiani said. "If we try to take on more than we can handle then our responsiveness suffers and ultimately our customer service will suffer. From the outset we had very realistic goals about what our achievements and our growth rate should be. Of course we had to modify [our goals] a little bit given the economic conditions."
Merchants declined to accept the federal government’s Troubled Asset Relief Program (TARP) funding, although its strong performance made it eligible.
The bank’s eight board members all reside (some part-time) in the Virgin Islands, and decisions are made on-site, making the bank more responsive to customer requests, Khiani said.
One of the advantages of a homegrown bank is familiarity with its territory and its customers. Proof that Merchants knows their customer is reflected in the number of non-performing loans — zero.
The bank’s name often causes a misconception that it serves only business. Not true, according to Khiani, who added that while "the name is sticking," the bank encourages individuals to take advantage of their personal account offerings.
The bank is touting their free Internet banking and bill pay to consumers, but this earned them a knock from Bankrate.com’s narrative about non-interest income.
Khiani admits that the bank’s business is skewed more heavily toward commercial banking business than personal banking, with mostly commercial loans. Home mortgages are not part of their core business, but there are commercial business loans for construction of "owner-occupied, rental and for-sale commercial and multi-family residential real estate."
Khiani’s tips for looking after finances in the current economy include:
-seeking out a bank that is willing to go the extra mile without having to pay extra;
-creating a budget and temporarily cutting out frills;
-people should be very careful to ward off cyber-crime from those who can compromise your credit or even steal from the unsuspecting.
Merchants Commercial Bank has consolidated into one branch at 4608 Tutu Park Mall, on St. Thomas, which is open 9 a.m. – 4 p.m. Monday through Friday. The bank also has two night depositories, one at the Tutu Park Mall building, and one in Great Cruz Bay in St. John. The bank can be reached at 340-779-2265 or at the Merchants bank website.
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