The North Dakota financial company is targeting Phoenix and Twin Cities for expansion.
Alerus Financial Corp. is muscling further into the Twin Cities market, buying Private Bank Minnesota, a boutique bank in downtown Minneapolis.
The acquisition gives Grand Forks, N.D.-based Alerus a downtown foothold and raises its Twin Cities banking assets to about $398 million. Terms of the sale, expected to close in mid-May, aren’t being disclosed.
Private Bank Minnesota has assets of about $142 million and employs 27 people. It specializes in high-touch traditional banking for executives, professionals and entrepreneurs and their companies, and will remain in the Campbell Mithun Tower as an Alerus branch.
Vicki Turnquist, Private Bank’s CEO and founder, said there is some overlap between the two operations, but there should be opportunities for affected Private Bank employees to find positions within Alerus.
“We’re going through those staffing decisions immediately,” Turnquist said. “I’m one of those staffing decisions. They don’t need another CEO, I know that.”
A key factor in the decision to sell, Turnquist said, was that Private Bank still has about $8.2 million it borrowed through the Treasury Department’s huge Capital Purchase Program in 2008. The program was aimed at helping healthy banks grow through the downturn.
The interest rate on that money is jumping from 5 percent to 9 percent, she said. “That certainly was weighing on us,” Turnquist said.
The Twin Cities and Phoenix are targeted growth markets for Alerus, and it has made nine acquisitions around the Twin Cities in the past decade.
Its last full bank acquisition in the Twin Cities was in 2009 when it bought Prosperan Bank in Oakdale after that bank failed and was taken over by federal regulators. Including Private Bank, Alerus now has about 260 employees in the Twin Cities.
Alerus shares trade over the counter. It has about 500 shareholders, the largest of which is an employee stock ownership plan, said Alerus President and CEO Randy Newman.
Alerus is actively eyeing other acquisitions, said David “Chip” Norris, president of the Twin Cities market for Alerus: “We’re not done here.”
Jennifer Bjorhus • 612-673-4683