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ANNUAL REPORT
COMMUNITY BANKING THAT’S BETTER THAN EVER
A Message from the CEO
A YEAR LIKE NO OTHER I can tell you that I’m not sad to have 2020 in the rearview mirror. It was a year of curveballs, pivots, and recalibrations. As so many experienced, the events of 2020 challenged us on many levels—with our employees, our customers, and business itself.
WE PERFORMED!
The pandemic brought circumstances we never had to deal with before, such as the complete closure of bank lobbies; shifting to a remote work force; working with business clients who were forced to shut down partial or all of their business; and administering the new SBA Payroll Protection Program (PPP), in just weeks, to help businesses in dire need of relief funds.
• We launched the PPP and approved more loans in three months than we had in five years, as part of our SBA lending program. Late in the year, we doubled down on our commitment to growing our SBA Division by expanding the breadth and depth of talent in that area and are now well positioned to be one of the top SBA Lenders in the nation.
I’m a firm believer that there is always opportunity in challenging times. In true community bank spirit, we did the right thing and took care of our employees and our customers. As a result, we not only survived, we thrived. We ended the year with net income ahead of our budget, which was remarkable considering we created our budget without knowing the uncertainties the year would bring.
• Equipment Finance and Leasing Division had a strong year in 2020. We’ve added a sales force on the East Coast, West Coast, and in Florida to better serve our customers in those areas of the country.
• Residential Construction Lending and Mortgage Lending was very brisk in 2020 and, with the prediction that interest rates will remain at alltime lows, I don’t see that slowing in 2021. • Helping customers navigate through challenging situations in 2020 built a lot of trust with new and existing customers. The respect and loyalty earned has fostered deeper banking relationships. We are certain to see that continue through 2021.
MORE CERTAIN THAN EVER! As we turn the page on 2020, we’ve emerged with a stronger focus. We have resolute clarity in what we do well and what our customers expect in a banking partner. Falcon National Bank is a trusted partner to small businesses. Our niche products and banking experts are perfectly positioned to deliver not only the very best banking solutions, but also a customer experience that’s rivaled by none. We could not have accomplished any of our successes without dedicated employees, trusting customers, and committed and engaged board and advisory board members and shareholders. Thank you for your past support, and I look forward to accomplishing so much together in 2021 and beyond.
CEO 1
FalconNational.com
Pandemic Response
STEPPING UP DURING A PANDEMIC Though 2020 created a host of new challenges, the pandemic gave us the opportunity to step forward as a partner to support our customers, employees, and communities in a number of important ways.
PAYCHECK PROTECTION PROGRAM When the Paycheck Protection Program (PPP) launched in April 2020, there was little guidance. Instead, we had to pull from our deep domain knowledge and acumen as experienced SBA Lenders and business bankers. Our bank staff worked extensive hours to help customers secure aid. All told, Falcon National Bank approved $60 million in desperately needed liquidity for 450 businesses disrupted by the COVID-19 pandemic. Each PPP loan represented tens, or even hundreds, of jobs preserved during the crisis. Our customers were counting on us to step up and lead. We did.
LOAN DEFERRALS In addition to issuing PPP loans, Falcon addressed our customers’ financial concerns by providing much-needed deferrals to those facing hardships due to the pandemic. By deferring certain payments for commercial loans, leases, and mortgage loans, we were able to offer those customers support when they needed it most.
STAFF SUPPORT They say tough times don’t build character, they reveal it. The shelter-in-place mandate, lobby closing, and quarantine precautions added unique challenges. Our Falcon team has shown over the past year that we are truly a team; pulling together to help our customers and one another. We are very proud and grateful for our dedicated staff.
COMMUNITY OUTREACH The pandemic created a host of needs throughout our communities. These are some of the ways we gave back. See more at FalconNational.com/Falcon-gives-back
ROCORI Food Shelf Toy Shop Donation
Salvation Army PhilanthroFEED
Operation Baby New Year Diaper Drive
Foley C.R.O.S.S. Center Donation
Quiet Oaks Donation Drop-off
Annual Report 2020
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Commercial Bankers
YOUR PARTNER IN BUSINESS BANKING Falcon National Bank is more than a financial institution or lender, we exist to support small businesses as they grow and achieve success across the communities they serve. With the products, services, and experts, we are perfectly poised to help you move your business forward.
SBA LENDING With a reputation of efficiency and expertise in the process, we offer flexible and competitive financing to help our customers launch, manage, and grow their business. As a Preferred SBA lender, we have a proven track record and the authority to underwrite SBA loans internally, issuing funds much faster. •R eal estate acquisitions • Business acquisitions • Business expansions •S tart-Up (targeted industries) •R efinances
EQUIPMENT FINANCE
DIGITAL PRODUCTS Convenient solutions to help you access and manage your finances, whenever, and wherever your business takes you. From the basics of easyto-use no-fee checking, to enhanced financial management tools, we have the solutions that are the perfect fit for small business. • No-fee business checking • Online account opening • Cash Management tools • ACH/Payroll services • Bill Pay • Remote Deposit • Personal, friendly, responsive bankers
COMMERCIAL LENDING
Equipment financing and leasing options preserve working capital and drive revenue by making it more affordable and easier than ever for our customers to get the business equipment they need.
With deep domain expertise in small business financing, and a genuine interest in helping our customers achieve their goals, our commercial lending solutions are the foundation of a lasting trusted partnership.
• Application-only financing up to $350,000 (industry dependent) • Competitive rates and flexible terms • Low down payments • Structured payments to match your seasonal cash flow • Leases or equipment finance agreements • Approvals within 2 hours • Same day funding possible
•C ompetitive financing options •F lexibility in financing structure •N imble and decisive loan approvals •A focus on building relationships •E xperienced bankers and trusted advisors
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Commercial Bankers
A DISTINCTION AND COMMITMENT WE HONOR
TROY CAMERON Senior Vice President Commercial Lending
Our business banking team focuses on not only finding immediate financing solutions, but we dig deeper and offer financing strategies that will benefit and complement your longterm goals. Its about building a relationship.“
BOB GERADS Chief Deposit Officer
We believe a bank should value your business and treat your goals like their own. We take pride in providing the right products that are the right fit for your small business as well as the personal relationship that you deserve.”
JOEL MIKOLICH President Leasing Division
WILLIAM JOHNSON Senior Vice President SBA Division Manager
In addition to our easy credit application and quick turn times, our devoted, customerfocused team is the driving force behind our growth. These are all clear differentiators that make us a superior choice in alternative financing options.”
The depth and breadth of our experience in the markets and communities we serve, the industries we specialize in, and the products we offer allow us to customize an offering that is specifically created for each client we serve. This is a distinction that most community banks cannot offer.”
MARKET PRESIDENTS
JESSICA BITZ Isanti
KYLE KNUDSON Richmond
SIDELLA OUTTEN Ham Lake
BRANDON VOIT Foley
JASON ERDMAN Maple Grove
Annual Report 2020
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Customer Spotlight
LIGHTHOUSE CHILD & FAMILY SERVICES Lighthouse is a mental health agency serving birth to adult, with five locations in Milaca, Princeton, Cambridge, and St. Cloud. Executive Director Julie Hanenburg says Falcon has always been friendly and responsive, but when the shutdown came, she really felt the essence of their partnership.
I had heard from many of my friends who didn’t bank with Falcon how horrible the SBA PPP experience was. Falcon was 100% there for me during the process. They were trusted advisors, informed, and very attentive to my business needs during a very scary and confusing time. I was very grateful for that.” JULIE HANENBURG
JULIE HANENBURG | Executive Director
HOUSE OF PIZZA HOUSE OF PIZZA is known for its thin-crust gourmet pizzas baked in signature revolving ovens. It’s a Minnesota favorite. Owner Brandon Testa had started construction on his new West St. Cloud location when his previous bank pulled out of the deal due to the pandemic. He reached out to Falcon, who responded in a true spirit of partnership.
From my initial conversation with Falcon, it was a rewarding partnership. It took just 12 days from the meeting to when financing was in place so I could get our third location up and running. Falcon made my needs a priority and they had my back. I have nothing but confidence that our banking relationship will continue to grow stronger.” BRANDON TESTA | Owner
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BRANDON TESTA
Customer Spotlight
QUIET OAKS HOSPICE HOUSE & RESPITE CARE Quiet Oaks provides quality end of life care and support for individuals and their families. Executive Director Linda Allen says Falcon has worked with the organization through some very challenging times—when it started the business in 2008 during a recession and recently through the impact of the Covid-19 shutdown.
Falcon supported us in getting access to funds to build out our dream, and our experience has been great ever since. They’re extremely responsive and knowledgeable—and a trusted non-profit expert. If I have questions or concerns, the team is quick to respond. They really care about community and want to help support the work of our communities. Their team gives back.” LINDA ALLEN | Executive Director
LINDA ALLEN
DYCAST SPECIALTIES DyCast Specialties produces aluminum and zinc die casting for telecommunications, electric motors, pumps, hand tools, and more. After looking at over 30 banks and meeting with ten in person, Financial Officer Ed Bolas says Falcon was the perfect fit.
We’ve been like a slingshot—we started with Falcon and never looked back. The biggest thing is the partnership. I know we can call and get straight answers. Falcon does a very good job making sure it’s a win-win situation for all of us. And they’re large enough that we know we can grow with them.” JON HAAVIG AND ED BOLAS
ED BOLAS | Finance Officer
Annual Report 2020
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Customer Spotlight
TWIN CITIES WRECKER SALES Twin Cities Wrecker Sales sells wreckers and fabricates parts. CFO Jenn Pearson says the relationship with Falcon started as a leasing partnership. They had a relationship with another bank for decades and felt the service they were receiving from the Falcon Leasing team was superior.
We switched our total banking relationship over to Falcon because of the partnership we had with the Leasing Division. Their digital banking technology allows us to do our business online, but we know when we call there will always be someone who answers and knows us by name and on a personal level.“ JENN PEARSON | CFO
INDEPENDENT LOCOMOTIVE SERVICE, INC Independent Locomotive buys, sells, leases, and services railroad locomotives to private industry and short-line railroads. Co-owner Mark Nesbit said his father, who established the business, believed the company was too small for a big bank and too big for a small bank, so it was a challenge finding a bank that would work with them in the beginning.
There weren’t a whole lot of banks out there that believed in our business. Community Pride had that faith in us, so we stayed with them when they became Falcon National Bank. They have always been able to get what we need quickly. In business, timing is everything. I know that if we call, every person at the bank is happy to talk with us and will give it their all to take care of our needs.” MARK NESBIT | Owner
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Customer Spotlight
AUDIO VIDEO EXTREMES Audio Video Extremes specializes in technology and security solutions for your home, business and car electronics, and much more. Co-owner Jodi Erkens says she switched to Falcon for the customer service and the partnership.
When you do business, you need partners, and they’re one of my strongest partners. Switching from our other bank to Falcon was an easy process. They walked me through everything that I needed. If I ever need anything, I can rest assured that it will be taken care of. Falcon helped me look forward and grow my business. That’s huge to me.” RICH AND JODI ERKENS
JODI ERKENS | Co-Owner
FAMO FEEDS Famo Feeds is a regional manufacturing feed facility with its own brand. Owner John Beste says John Herges was instrumental in helping his father get the financing he needed for the purchase of Famo Feeds in 1979. In 2020, that relationship came full circle when John returned to Falcon to fund the shares he needed to become full owner.
They made the experience as seamless as possible for me to step into this new role. Falcon has a lot of lending power, which makes it very easy to do business with them. If we need something, I know we can call Troy and he’ll get on it right away. There’s a comfort level there. Falcon makes the process feel like a handshake as they move us forward.“ JOHN BESTE | President
Annual Report 2020
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Community Involvement
REAL PEOPLE CREATING STRONGER COMMUNITIES. When you bank with Falcon, your money works to grow your local economy. That’s because we make it our mission to donate our time, talent, and treasure to the local communities we call home. Because when our communities are strong, it gives everyone a more vibrant environment to work, play, dream, and thrive. Here are just a few of the organizations Falcon gave back to in 2020.
Tri-County Humane Society extends heartfelt appreciation to Falcon National Bank for their partnership during a year like no other! Not only were we making adjustments to our day-to-day operations due to the challenges of COVID, we were also faced with the task of trying to raise money for a new shelter! Kudos to Falcon for stepping up with a generous donation to sponsor the new Board Room. We look forward to the day of Tri-County Humane Society Board Room Sponsorship
“business as usual” when our board meetings will resume in person in that room. On behalf of the people and animals of Tri-County Humane Society, thank you Falcon National Bank for your support!” VICKI DAVIS | Tri-County Humane Society Executive Director
Cars For Neighbors is an Anoka County-based nonprofit organization whose mission is to foster independence by providing car care for neighbors in need who cannot afford to have their vehicle fixed. Partnerships with local businesses like Falcon National Bank are essential for us to provide the services we do. We are thankful for Falcon National Bank’s monetary donations and for sponsoring our annual event. They have helped neighbors in our community become more self-sufficient, restoring hope one car repair at a time.” JOE MCKENZIE | Director of Philanthropic Partnerships
Falcon National Bank has been a great partner to the city of Richmond. It is our duty to be good stewards of the taxpayer dollars, yet move the city forward and provide amenities that continue to make Richmond a great place to live. Falcon has stepped up in big ways, helping to fund the city band shelter, pickleball courts, and electronic sign at the Richmond Arena. Our community recognizes those who give back. Falcon’s contributions Richmond Band Shelter
are genuine, meaningful, and appreciated. We look forward to continued partnership with the bank.” JIM HEMMESCH | Richmond Mayor
FalconNational.com
Community Involvement
We appreciate the partnership with Falcon National Bank. They are committed to serving the community as a whole and are invested in building relationships. They strived to find ways to offer their services to not only assist all of our banking needs, but also as a major contributor to our Ledge Amphitheater. We couldn’t be more pleased with the great relationship we have created with them.” Ledge Amphitheater
SHAUNNA JOHNSON | Waite Park City Administrator
The contribution Falcon National Bank has made to the City of Waite Park is a great way to support our community. It shows that they believe in the growth of the area and want to be a part of contributing to the region’s economy. The Ledge Amphitheater will be a great place for people to gather and socialize and we are thankful that Falcon National Bank will be a part of making this happen.” RICK MILLER | Waite Park Mayor
From mental health support to cancer care, emergency services to delivering babies, Cambridge Medical Center plays a vital role in the health of our community. It is through the generosity of supporters like Falcon National Bank that we can provide services and care that otherwise would not be available in our area. Like our dedicated caregivers, providers, technicians, and support staff, Falcon helps us build on our strengths and pioneer Cambridge Medical Center Pheasant Hunt Sponsorship
new approaches that lead to better treatments for our patients. They help us take care of the little things that really matter when a person is most vulnerable. They help us change lives. Thank you for all you make possible.” AMY DRAXTEN | C ambridge Medical Center Foundation Development Officer
Falcon National Bank is a part of our community and supportive of many aspects through donations and volunteer activities. Our new mural is only the most recent example. Falcon National Bank is an active participant in our Foley Fun Days, Falcon Bank 5K, and sponsoring the high school football stadium to name a few. Falcon National Bank is a valued partner and we look forward to working with them for many years to come.” Foley Historical Mural
SARAH A. BUNN | Foley City Administrator
Annual Report 2020
Advisory Boards
ST. CLOUD
RICHMOND
ISANTI
MARK OSENDORF Xcel Energy
BERNIE PERRYMAN Batteries Plus Bulbs
GARY BRINKMAN Brinky’s Liquor
DEB HUSCHLE Gabriel Media
LARRY ANDERSON Re/Max Results
TRACY NEIFERT Isanti Rental Inc.
TAMMY BIERY Career Solutions
DAVE JACOBS Jacobs Financial
SHAWN SPODEN, DDS Chain of Lakes Dental
WENDY GILK Gilk Plumbing
JULIE GOTHAM Healthcare Administrator
LISA BRADY Art & Science Academy
REBECCA KEMPENICH Board Vice-Chair Falcon National Bank
JOHN HERGES Board Chair Falcon National Bank
TRINITY SITZMAN Rocori High School Student
RICK BACKES Backes Wood Products
BRUCE NOVAK Retired Former Superintendent
JESSICA BITZ Board Vice-Chair Falcon National Bank
LAURIE KISSNER All State Traffic Control
DR. KIM SCHAAP, MD St. Cloud Orthopedics
TESA TOMASCHETT City Administrator
JOE BERTRAM SR. Bertram Farms
STEVE HAAG BJ Baas Builders Inc.
GARY ALBERTS Board Chair Midwest Medical Examiners
MICHELLE HENDERSON BadCat Digital
STEVE BAKER Steven V. Baker Ltd; Certified Public Acct.
LOGAN LOUIS Vice Chair Louis Industries Inc.
KYLE KNUDSON Board Chair Falcon National Bank
CHELSEY MUELLER, CPA Christianson PLLP
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FalconNational.com
Advisory Boards
FOLEY
RANDY KOTSMITH Foley Lumber
HAM LAKE
PAUL NEUBAUER Foley School District
BRENDA JEWELL Anytime Fitness
BRENDA NOLBY Jam Hops
RISE AWARD Every quarter, Falcon National Bank recognizes an employee who puts our mission, vision, and values into action. We call it our RISE award. While all of our employees consistently rise to the occasion, these are the individuals chosen as our 2020 winners. QUARTER 1 WINNER
BRIAN BAUERLY Knife River E-Ride Industries
REBECCA KEMPENICH Board Vice-Chair Falcon National Bank
CHRIS MICKMAN Mickman Brothers Nursery
SIDELLA OUTTEN Board Vice-Chair Falcon National Bank JENNIFER VOLKMANN
Retail Banking Supervisor QUARTER 2 WINNER BRANDON VOIGT Board Chair Falcon National Bank
CANDI JANSSEN Blattner Energy
JIM CORMIER Building Sites
MELVIN AANERUD Retired from the SBA
TRACI NUNEMACHER
Compliance Officer
BRIAN LAVERDIERE WebWizard Works, Inc.
SCOTT JOHNSON Johnson Farms
JACQUELINE SUNDSRUD Real Estate Professional
GARY ALBERTS Board Chair Midwest Medical Examiners
QUARTER 3 WINNER
MELISSA CHRISTENSEN ED POPP Benton County Commissioner
Mortgage Banking Assistants Manager
QUARTER 4 WINNER
KAYLA PETRON
Sr. Marketing Specialist
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Board of Directors
THANK YOU TO OUR BOARD OF DIRECTORS
MISSION WHAT WE ACTUALLY DO
Our Board plays an integral role in our success. Their business experience and commitment to our mission, vision, and values make us a more sound and strong financial institution.
To create a banking experience that develops into life-long relationships focused on customer growth.
VISION WHAT WE ASPIRE TO DO
BRIAN BAUERLY E-Ride Industries
MIKE DOTY Michael Doty, D.D.S.
LEE HANSON Hanson Law Office
We know the key to success is simple: You win. We win. You thrive. We thrive. This is our community. This is our future. This is our bank.
VALUES PRINCIPLES AND BELIEFS DIANE WOJTANOWICZ Prairie Farm Company
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MARK WARNERT Warnert Promotions
GARY BRINKMAN Brinky’s Liquor
CHAD MURPHY Murphy Chevrolet
STEVE TORBORG Torborg Builders
JOHN HERGES Falcon National Bank
GARY ALBERTS Midwest Medical Examiners
BRENT ANDERSON Anderson Trucking Service
TERRIE CLOUD Catalyst Consulting Group
FalconNational.com
Relationships Integrity Solutions, Service Execution At Falcon National Bank, we build long-lasting relationships with our customers, our communities, and our colleagues. With the highest level of integrity, we provide trusted solutions and exceptional service to deliver the very best banking experience. We pride ourselves on our fast and reliable execution. At our core we know that we can, and will, RISE to every occasion.
2020 Financials
AFTER A YEAR LIKE NO OTHER, WE’RE POSITIONED FOR EXCEPTIONAL GROWTH. CAPITAL
TOTAL ASSETS
In Millions
In Millions
100
1000
90
900
80
800
70
700
60
600
56
$
50 40
60
$
46
$
400 300
20
200
10
100
2018
2019
2020
With a strong local ownership group, we remain well capitalized and positioned to grow with our customers.
0
2019
2020
In Millions
600
550
546
$
500
481
$
450
500
400
380
$
350
300
300
250
250
200
200
150
150
100
100
50
50
2018
2019
594
$
550
486
$
450
400
0
2018
TOTAL DEPOSITS
In Millions
350
473
$
Growth of the bank is a direct reflection of growth in the customers and communities we serve.
TOTAL LOANS AND LEASES 600
574
$
500
30
0
687
$
2020
Hitting the radar of the Monitor 101+ Report for equipment finance and SBA top 10 lender list, Falcon’s niche products are seeing great success in the marketplace.
0
420
$
2018
2019
2020
Our traditional services coupled with enhanced digital solutions provided customers peace of mind throughout 2020; deepening existing relationships and forging new ones.
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REAL SOLUTIONS YOU CAN BANK ON. BUSINESS BANKING SOLUTIONS • Commercial Loans • Agricultural Loans • SBA Preferred Lending Options • Working Capital Loans • Equipment Financing and Leasing • Checking and Savings • Money Market • Remote Deposit • Cash Management • Positive Pay • Wire Transfers • Merchant Credit Card Services • Online Banking • Bill Pay and E-Statements • Online Account Opening
PERSONAL BANKING SOLUTIONS • Residential Real Estate Loans • Construction Financing • Consumer Loans • Checking and Savings • Money Market • Certificates of Deposit • Mobile Banking • Individual Retirement Accounts • Gold Club (50+) • Safe Deposit Box • Online Banking • Bill Pay and E-Statements • Online Account Opening • Remote Deposit
LOCATIONS SAINT CLOUD 1010 W. St. Germain Street St. Cloud, MN 56301 320.223.6300 FOLEY 183 Cedar Drive Foley, MN 56329 320.968.6300 HAM LAKE 1441 Bunker Lake Blvd. NE Ham Lake, MN 55304 763.862.6500 ISANTI 905 6th Ave Court NE Isanti, MN 55040 763.444.8800
FalconNational.com
MAPLE GROVE 9600 Upland Lane North Suite 100 Maple Grove, MN 55369 763.494.9800 RICHMOND 22 Central Ave S. Richmond, MN 56368 320.597.2145 FALCON LEASING ST. CLOUD 28 11th Avenue S., Suite 103 St. Cloud, MN 56301 320.968.2000