Bell State Bank primes its Twin Cities operation

State Bankshares, Inc., the parent company of Fargo, N.D.–based Bell State Bank & Trust, has agreed to purchase The Business Bank and its Prime Mortgage division, both based in Minnetonka, a suburb of Minneapolis. The acquisition will bring together the largest independently-owned bank and mortgage company in Minnesota, South Dakota and North Dakota with another major privately-held bank and mortgage company..Organized in 2000, The Business Bank had a correspondent banking relationship with Bell State Bank from the beginning. In recent years, The Business Bank's board became serious about selling the bank as interest grew from potential buyers. In the end, Bell State Bank emerged as the final purchaser in an all-cash transaction because of the banks' long relationship. "They knew we had a shared history and privately-owned culture," explained Michael Solberg, president of the Bell State Bank. .Already a $2.5 billion bank, Bell State Bank & Trust will gain The Business Bank's $228 million in assets and will grow to more than $2.7 billion. Bell State Bank's mortgage division, Bell Mortgage, will nearly double in size. With Bell Mortgage and Prime Mortgage underwriting $1.6 billion and $1.3 billion in loan volume last year respectively, the combined company will approach third place in the region for size after mortgage leaders Wells Fargo and U.S. Bank. Bell Mortgage now adds Prime Mortgage's 15 offices in Minnesota and Florida to its 28 offices in the Minneapolis-St. Paul area and in Phoenix, Ariz..The purchase also advances Bell State Bank's strategic expansion into the Twin Cities area. Before the bank purchased Bell Mortgage in 2010, its branch footprint was limited to North Dakota and in the lakes region of Central Minnesota. "It was difficult to achieve growth there," Solberg said. "We needed to have a much larger footprint and a place in larger markets. The Twin Cities is our opportunity.".Now, Bell State Bank's burgeoning mortgage business also offers the bank an opportunity to grow its retail presence in the Twin Cities. "The big win for us on the mortgage side of the business is the ability to grow our mortgage servicing business," Solberg said..While Bell Mortgage will continue to sell many of its loans into the secondary market, it plans to retain the servicing rights to the loans. This will allow the bank to draw mortgage customers into the retail side of the bank. If the bank just sold the loans, it wouldn't get a chance to cross sell, Solberg explained. With $1 billion in loans serviced by the bank, it already has around 14,000 possible points of sale, Solberg said. "We want to grow even larger in that business," he said..The Business Bank's office in Minnetonka will become Bell State Bank's second branch in the Twin Cities. Solberg says that while the bank isn't out hunting for acquisitions, the bank has a large network of relationships through its correspondent banking services that could offer future opportunities. "We'll look at acquisitions in the future, if they are the right fit," he said. "But we have had great success growing, even when the right fit hasn't been there. We put organic growth first.".While the sale has no specified closing date, The Business Bank CEO Brad Krohn and President Theresa Tembreull, as well as the founders of Prime Mortgage, Tom Olson and Sally Turrittin, will consult with Bell State Bank and Bell Mortgage on a part-time basis after the acquisition is complete.