Great Northern Bank in St. Michael is now a branch of First American Bank of Hudson, Wis., as Minnesota’s multitude of community banks continues to shrink.
First American’s holding company, First American Investments Inc., bought Great Northern Bank, which has $71 million in assets, and will operate it as a branch of First American, said Craig Mueller, managing director of Oak Ridge Financial Services Group in Golden Valley, which advised on the deal.
Terms of the transaction aren’t being released. Mueller described it as a merger of two healthy one-branch banks, and said he expects to see more such mergers in the Twin Cities this year as they struggle to grow revenue amid lackluster loan demand and increasing regulatory costs.
Pete Alworth, former chairman of Great Northern Bank, agreed. “As community banks look to make more money and figure out how to be more efficient,” Alworth said, “you just simply have to get bigger.”
Last year Minnesota lost 15 of its more than 300 community banks, mostly to mergers.
Alworth said he is now the executive vice president at First American Bank. Combining the two banks allows them to make larger loans, Alworth said, and he sees opportunities in regular business lending and small-business commercial real estate loans.
“We’re going to be expanding both locations,” Alworth said.