Three years ago, Shirley Wikner was at wits' end with her bank.
Her family-owned Aviation Charter and Executive Aviation aircraft services, at Flying Cloud Airport in Eden Prairie, had cut back during the Great Recession. But Wikner was current on her building mortgage. Demand had returned, and she needed working capital to expand and invest in a business that flies businesspeople as well as medical teams and organs.
Moreover, Wikner's husband and business partner died in 2012, increasing the legal and emotional uncertainty.
But her lender, the former M&I Bank, was in trouble with federal regulators, weakened by huge commercial real estate losses, and in the process of being acquired by BMO Harris Bank, the Chicago-based subsidiary of one of Canada's largest financial institutions. And Wikner couldn't get anybody to call her back.
"No one ever told me I was in 'workout,' " Wikner recalled last week. "We were paying back $500,000 in principal yearly. Never late on a payment. And profitable.
"But we hadn't really grown our business for about three years. We were holding from about 2008 through 2011."
According to Wikner and her current bank, Venture Bank, M&I had tossed her loan in the purgatory known as workout. She would repay her loans and be discharged. But she'd get no more credit and less service as M&I was devoured by BMO. This is not unusual, particularly during periods of business decline, bank ownership changes or strategy changes at large institutions as they increase or decrease their exposure to small-business lending.
Bloomington-based Venture, unlike institutions that do some of this and some of that, is almost exclusively a small-business lender. And it has grown over 14 years to be one of the Twin Cities' largest small-business lenders, even though it is smaller than several competitors.
Venture, thanks to a stick-to-its-knitting strategy, never strayed into commercial real estate development, which cost big banking losses during the Great Recession.
Still, the recession hurt its growth and profits as customers' businesses declined.
Venture Bank President Michael Zenk said he didn't call any loans, but did refer some deteriorating customers to higher-risk, asset-based lenders. Venture stayed profitable. And in 2014, it posted a very strong return on assets of 2.3 percent and return on equity of 25 percent, thanks to profitable loan growth that has averaged 20 percent since 2010.
"My little part of the economy is 4,000 business clients who average about 60 to 70 employees apiece," Zenk said.
The bank is outperforming its rivals, financials filed with regulators show. "But we are most proud of helping our business customers succeed," Zenk said.
In June, Venture Bank will open a fourth suburban office, in Roseville. Zenk, 60, doesn't claim to be a genius. He's just not a fan of huge diversified financial conglomerates. And it's tough to compete with them on products or price. So, successful small bankers make it on service.
And Zenk does believe he's got a pretty good formula for serving and making a buck from small-business lending.
Zenk learned the trade beginning as a loan officer in 1979 at Riverside Bank. The bank's president, Dave Cleveland, ran that storied small-business lender based on service and a good eye for choosing the right customers.
Cleveland and his partners, including Zenk, sold for a premium to consolidator Associated Bancorp of Wisconsin in 1999. Zenk, who had risen to chief lending officer at Riverside, hung around for a couple of years. Then he got the itch to start his own bank.
Zenk and Gwen Stanley, Riverside's former chief financial officer and now Venture's chief operating officer, and a couple of dozen other investors put up $8 million to start Venture.
They wanted to see if they could duplicate the Riverside experience. And they've exceeded it, in terms of numbers, after 14 years.
Last year, Venture Bank earned a record $10.6 million and finished the year with shareholder equity of about $42 million. Venture is owned by about 60 employee and nonemployee shareholders, and has a growing employee stock plan that the 100 Venture employees get into after a year on the job.
According to figures from Venture and the U.S. Small Business Administration (SBA), Venture was the third-largest issuer of SBA-guaranteed loans last year in Minnesota at $32.2 million, behind giant Wells Fargo and U.S. Bank.
Wikner, who started her aviation business in 1986, is one happy customer.
Her CPA referred her to Venture amid the issues with M&I.
It took nearly two years for Venture Bank to consolidate and refinance several million in a mortgage and operating loans for her. The process was hampered in part because she operates her business on land owned by the Metropolitan Airports Commission and because of legal issues surrounding her late husband's estate.
"It was as complicated a deal as our staff had ever experienced," said Venture banker Kevin Doyle, ironically a onetime M&I banker.
Last year, Venture lent Wikner an additional $800,000 to buy another aircraft.
"The business is doing well," Wikner said of her 49-employee firm, which owns several propeller-run and jet aircraft. "Venture has helped me sleep at night. I was in limbo for three years."