State Bankshares in Fargo, North Dakota, has evolved on myriad fronts over the past decade, more than doubling in size and becoming one of the most successful community banks in the country.
The company, which does business as Bell Bank, is No. 1 on the 2021
The now $10.1 billion-asset company — it was just below that threshold in 2021 and continued to grow through the first half of this year — expanded from North Dakota’s Red River Valley around Fargo into western Minnesota several years ago. It gradually pushed toward Minneapolis and has been building up its presence in that larger market for about a decade. It also now banks the Phoenix area.
Along the way, the company has substantially diversified its revenue sources. Bell Bank is a prominent commercial lender, but it also runs regional wealth management and insurance units in the Midwest, and it operates a national mortgage business that produced $6 billion of loans in 2021.
The combination of interest income and fees spread across those businesses helped it generate revenue growth in 2021 of 43%, roughly five times that of the entire asset class, according to Capital Performance Group.
“Our outperformance speaks to the diversity of our business,” Bell Bank President and CEO Michael Solberg said in an interview.
The bank’s net income last year swelled 159%, more than triple the median rate of
It posted loan growth in 2021 of nearly 16%, versus a median of about 1.5% for its asset class. State Bancshares did so without sacrificing credit quality. Nonperforming assets as a percentage of total assets were just 0.08%. The median of all peers was 0.36%.
Inspired by the book "How Fargo of You," Bell Bank has an awards program that recognizes employees with a talent for the little touches that matter to customers.
To be sure, 2021 was a different time. Interest rates were historically low. Mortgage refinancing activity was robust. Economic activity was mounting.
This year, inflation is soaring and the Federal Reserve is
“Consumer concerns about rising rates, inflation and a potential recession are manifesting in softening demand,” said Sam Khater, Freddie Mac’s chief economist.
Solberg acknowledges the headwinds are blowing. But he said that, as with other business lines, Bell Bank has grown by investing in its businesses when others pull back — aiming to position the bank for long-term growth.
“We look at this downturn in mortgages as a time to invest,” Solberg said. “We are actively hiring. This is a time to grab market share.”
He said overall loan demand is holding steady at mid-year 2022 and there are no obvious
“From a demand standpoint, we’re cautiously optimistic,” Solberg said. “And knock on wood, we feel really good about credit quality.”
The big task, he said, is finding talent to help drive continued growth. “Hiring is a challenge here like it is for everybody,” he said, referring to low unemployment and fewer skilled workers than professional job openings.
But Bell Bank has long fostered a culture that prioritizes employees’ professional development, compensation and job satisfaction — helping it hold its own on the recruiting front and shine in employee retention. It routinely ranks among American Banker’s
“That’s always been our secret sauce,” Solberg said. The better the company does, the more employees earn, including bonuses. The more the company invests in its people, he said, the better its performance.
“To us, happy employees create happy customers,” Solberg said. “From there, the financial numbers take care of themselves.”
