Merchants Bank has reached an agreement to purchase the current Associated Bank branch locations in Rushford and Lanesboro, according to officials from the two companies.

The sale includes about $47 million in deposit and loan relationships, as well as the physical locations of the banks in Rushford and Lanesboro.

"Acquiring these locations aligns with our long-term vision to provide our banking services to customers across our region," said Richard L. Mahoney, Merchants Financial Group, Inc., president and CEO. "We recognize Rushford and Lanesboro as important communities in terms of our area's economic development, and we look forward to serving all the financial needs of these important customers."

Merchants Bank is also acquiring a small pool of agricultural loans and related deposits from the Associated branch in Red Wing. One of the focuses of the Merchants organization is ag lending. Associated will continue to operate its Red Wing location. Affected customers will be notified individually at a later date.

The sale is pending regulatory approval. Barring complications, Mahoney said he expects the sale to be completed by late November. Terms of the sale have not been disclosed. Mahoney said that Associated Bank's community banking emphasis helped in coming to an agreement because of a common customer-first focus.

"We, too, pride ourselves in being a community bank that exceeds the needs of our customers. We know that those needs of our Rushford and Lanesboro customers will soon be well taken care of by Merchants," said David L. Stein, Associated Bank executive vice president and head of retail banking. "The Rushford and Lanesboro locations are at the western edge of our reach geographically. They are more central to Merchants' footprint, which should result in greater overall convenience to bank customers."

Associated Bank, headquartered in Green Bay, has total assets of $24 billion. It has approximately 240 locations across 150 communities in Wisconsin, Illinois and Minnesota.

Merchants Bank has $1.3 billion in assets. It currently has 18 locations in southeastern Minnesota and west-central Wisconsin, including Winona, St. Charles, Goodview, Rochester, Caledonia, La Crescent, Onalaska, Spring Grove, Cannon Falls, Red Wing, Hampton and the southern Twin Cities metropolitan suburbs of Apple Valley, Cottage Grove, Hastings, Lakeville and Rosemount. The "flagship" Merchants Bank in Winona was founded in 1875. Merchants Capital, the company's leasing arm, is based in the Twin Cities. All banks are FDIC members and equal housing lenders. Additionally, Merchants manages a large correspondent mortgage banking operation and has a loan-servicing portfolio of approximately $2.2 billion.

Merchants Bank stock is closely held, but is available to the public when shares become available. There are approximately 400 shareholders, mostly individuals and families from southeastern Minnesota and west-central Wisconsin. Merchants also has an Employee Stock Ownership Program (ESOP).