Unique bank, unique opportunity for Hancock
By Tom Larson
Morris Sun Tribune
Hancock has its bank back, and a unique opportunity to collaborate with its new owners to potentially spur community development.
The Community Development Bank officially took control of two branches of what was 1st American State Bank of Minnesota, in Hancock and Benson, last week.
CDB, which is headquartered in Ogema, Minn., has been in operation since 2001 when it purchased the Ogema State Bank, a family-owned bank that was founded in 1906.
CDB is unique, said president Kevin Shipley, because it is owned by three non-profit, community development corporations in Detroit Lakes, Almena, Wis., and Sisseton, S.D.
"(Acquiring 1st American) provides another tool for the non-profit to enhance community development," Shipley said. "We understand community lending and banking. This is a good fit for us."
Acquisitions are new for CDB. Ogema is a community of 147 people, and the purchase of 1st American is its first expansion. Any further expansion of CDB will be done with due diligence, Shipley said.
"If the opportunity presents itself, sure, we'd look into it. But it has to fit with our overall strategy," he said. "We're a small, community bank, even with this acquisition. We pride ourselves on customer service, and there's not a lot of running things us a chain of command. We can make decisions here and we can make them quickly."
CDB operates in an agricultural-based economy and that experience will be a benefit to customers in the Hancock and Benson areas, Shipley said.
Justin Cronen is the branch manager in Hancock. A son of a Kandiyohi farm family, he graduated from Minnesota State-Moorhead with a finance degree in 2004, spent a short time working in the Twin Cities, then moved to work with CDB in Ogema. His wife, Karla, is a Raymond native and works as a school counselor in Henning. The were married in 2005, have a son, 3 years, and a daughter, 18 months.
The situation with CDB in Hancock -- in a small, ag-based community -- is what Cronen sought when he chose a career in finance.
"This is where I wanted to get to," he said, adding with a smile, "I didn't know it would happen this fast."
It's been known in banking circles for some time that 1st American was struggling and probably wouldn't survive. CDB and others were allowed to investigate the 1st American operation, then submit bids to purchase it, Cronen said.
Once its bid was chosen, CDB worked with the Federal Deposit Insurance Corp. on the transition, he said.
The bank closed on a Friday, CDB and FDIC officials worked through the weekend, and the doors reopened at CDB on a Monday.
Customers were patient and relieved that the bank would remain open, Shipley said.
"We thank our customers for their loyalty," he said. "Without that loyalty, it could have been a lot worse for us."
Services such as check blanks, debit cards and automatic deposits and bill paying will not change, he said.
CDB, in the future, may consider moving to a new facility, but, for now, Cronen said, the emphasis will be on continuing service and getting to know the bank's customers.
"The main thing is to meet everybody as they come through the door, and get out and meet business owners," Cronen said. "I think customers are pretty relieved, more than anything. In a small town, I think they knew (1st American's) closing was coming. I think they're happy when (CDB) came in and they're relieved their bank is staying in town."
Cronen also stressed that the community and its economy had no impact on 1st American's failures.
"The local economy didn't have anything to do with this bank's problems," he said.
Thanks to bank employees and the FDIC's work, the transition went smoothly, Shipley said.
When the new owners and employees settle into their new working environment, CDB will assess its future plans, Shipley said.
What won't be a question is keeping the bank open and its services available, he said.
"When you increase your asset size there's more opportunity to provide lending and financial services," Shipley said. "This was an opportunity, at a reasonable price, to continue to serve the community. There was some concern in the community that the bank would be closed. It's important that the customers know we're here for the long haul."