A North Dakota bank that's a relative newcomer in the Twin Cities is fast becoming a local mortgage powerhouse.
The Fargo-based parent of Bell State Bank & Trust is buying the Business Bank in Minnetonka and its Prime Mortgage division.
The purchase, announced Tuesday, nearly doubles Bell State Bank & Trust's mortgage business in the area, creating a company that originated nearly $3 billion in mortgages last year.
"It's a big day here," said Todd Lee, Bell State's executive vice president and Twin Cities managing director in Golden Valley.
Financial details of the all-cash purchase weren't disclosed. The sale is subject to regulatory and shareholder approval and is expected to close by the end of March.
Gary Kirt, president of the Bell mortgage division of Bell State Bank & Trust, said he thinks the combined mortgage business puts the bank around the No. 3 spot in Minnesota, behind home loan giants Wells Fargo & Co. and U.S. Bancorp.
Lee said the mortgage operation fed other types of new business to the bank throughout 2012 and that he expects more of that synergy with the acquisition.
The Business Bank, based in Minnetonka, is a small-business lender with assets of $200 million. Prime Mortgage joined it in 2007, and the two employ more than 200 people in 15 offices in Minnesota and a satellite office in Naples, Fla.
It's a rapid ascent for Bell State Bank & Trust, which officially entered the Twin Cities market just two years ago. Formerly known as State Bank Trust, the North Dakota bank changed its name after acquiring Bell Mortgage, a residential mortgage lender that's been around the Twin Cities for more than 130 years, in 2011.
Bell State's local headquarters are in Golden Valley, and it employs about 200 people around the Twin Cities.
Bell State sells most of the mortgages it originates, in some cases retaining the servicing rights. President Michael Solberg said in an interview that the acquisition will help it expand its servicing operation.
"We have just under $1 billion in mortgages that we service," Solberg said. "We look forward to growing that number exponentially because of this transaction."
The Fargo-based bank has assets of more than $2.5 billion, making it the largest family-owned bank operating in Minnesota.
It's not immediately clear whether there will be layoffs.
"We are at the very beginning of this transaction, so we will be in a better position to answer that in the weeks and months to come," Lee said. "One thing I can say for sure is that our company cares about people and our track record following bank acquisitions is, even where there is overlap, to try hard to find other positions for all high-performing people."
Jennifer Bjorhus 612-673-4683