Bell State Bank & Trust in Fargo, N.D., is buying a friendly rival in Minnesota.
The $2.5 billion-asset bank, which already makes home loans in Minnesota, said Tuesday that it is bulking up in the state by acquiring The Business Bank in Minneapolis and its mortgage subsidiary, Prime Mortgage. A sale price was not disclosed.
Prime Mortgage and Bell State's Bell Mortgage division have been competitors for many years in the Minnesota market. Last year Bell Mortgage, which lends in Minnesota, Wisconsin, and Florida, did just over $1.6 billion in volume, while Prime Mortgage, which lends mainly in Minnesota and has a satellite office in Florida, did a little more than $1.3 billion.
"These two companies were almost mirror images of each other. We joked that they were twins separated at birth," Bell State Bank & Trust President Michael Solberg said in an interview. "They had the same number of employees, they did nearly the same mortgage volume, and when other companies got in trouble a few years ago, they both kept doing things the right way."
The Business Bank has $228 million of assets and one branch in the Minnesota. Bell State operates 19 branches in three states, including nine in Minnesota, according to Federal Deposit Insurance Corp. data.
Solberg said that the management teams of both The Business Bank and Prime Mortgage have agreed to remain in place as consultants during the transition. The Prime Mortgage and Business Bank brands will be merged with the Bell State brand by the end of 2013, Solberg said, though he expects the full integration to take several years.
If regulators and shareholders approve the deal, Solberg expects it to close in the first quarter of the year.