Bank boom: Diversity makes F-M market attractive to financial institutionsFARGO – This week, Gate City Bank became the third bank within in a year to open along the Veterans Boulevard corridor between Fargo and West Fargo and the 20th to open in the metro area since 2004.
By: Angie Wieck, INFORUM
FARGO – This week, Gate City Bank became the third bank within in a year to open along the Veterans Boulevard corridor between Fargo and West Fargo and the 20th to open in the metro area since 2004.
This growth is contrary to a national trend of bank closures. The Federal Deposit Insurance Corp. reports that more than 2,100 banks have closed over the past 10 years.
Some of those were highly publicized bank failures. Others were the result of bank mergers and acquisitions prompted by more regulations and associated costs of doing business.
Online and mobile banking have also cut down on foot traffic at banks, causing many bankers to rethink opening additional brick-and-mortar locations. A study by the Pew Internet & American Life Project in 2013 showed that 51 percent of American adults bank online and 32 percent of cellphone owners bank using their mobile phones.
The diversity of revenue sources makes the Fargo-Moorhead market attractive to financial institutions, officials say.
Most point to oil money as a draw.
“No doubt, oil activity has touched all of our larger markets,” said Russ Erickson, president and CEO of Bremer Bank. “The way money spins from these businesses gets to all locations in North Dakota and into Minnesota.”
He said recent higher commodity prices are also a positive for the region.
Fargo-Moorhead also boasts a strong business climate. Commercial real estate has been profitable for institutions such as BlackRidgeBANK, said Darren Klabo, market president of Fargo-West Fargo.
Pete Fullerton, president and CEO of Cornerstone Bank, said a strong residential mortgage market also benefits area banks.
A growing population was one thing that attracted First International Bank & Trust. Chief retail banking officer Peter Stenehjem said the bank saw expansion into Fargo as a way to expand the client base of the Watford City-based bank.
While many area bankers are focusing on developing more mobile and online banking technology, they say a physical bank presence is still important.
“I think, to me, banking is about building relationships, and electronic banking is not going to replace that. It doesn’t replace good old-fashioned relationship banking,” said Kim Meyer, executive vice president and director of human resources and marketing at Gate City Bank.
Community banks such as VISIONBank seem to have an advantage in this market, said senior vice president Kelli Simonson. She thinks customers place more importance than ever on knowing their banker after seeing recent big-bank failures.
The opportunity to reach more customers and to build those relationships is the reason many bankers say they plan to continue to expand and build branch locations here.
Bill Russell, executive vice president of retail banking for Bell State Bank & Trust, said expansion has been a big success for them.
In addition to the Bell State Bank’s new branch near Veterans Boulevard in West Fargo, the bank has entered several new markets including Fergus Falls, Detroit Lakes, Alexandria and the Twin Cities over the past five years, and does not plan to stop there.
“We will continue to push full speed ahead,” said Russell.
Readers can reach Forum reporter Angie Wieck at (701) 241-5501