Non-bankers form winning team at new bank

Northwestern Financial Review, May 15-May 31, 2002 by Dullum, Justin

A banker, a farmer, a construction worker and a dental hygienist sat at a table. This isn't a joke. This is a Community Pride Bank board meeting. The Ham Lake, Minn., bank has grown to $32 million in assets from $2.8 million in 2000 - certainly no joke. But the bank's board members, who come from all walks of life, do find the time to enjoy their new venture.

"At our board meetings, there are at least half a dozen bursts of laughter," said Mary Wasche. "People outside the room must wonder what's going on in there. We enjoy each other. We take this bank very seriously, but it's actually been a lot of fun."

Only one of the bank's board members has a banking background. Wasche was a dental hygienist for 20 years, ran a family-owned commercial painting business and now pursues freelance writing. Board member Bob Olson is a farmer. Al Sannerud, an accountant, runs A.M. Sannerud and Associates P.A., and is affectionately known in the area as "Mr. Ham Lake."

"Every one of the people on the board brings customers in and everyone on the board helps to make the bank better," said Olson. "There are many banks with lots of investors, but I'm not sure there are as many banks with a board as large and diverse as ours. Having this board brings in ideas from people with very different backgrounds. It shakes loose good ideas."

The board, all investors in the bank, is the brainchild of John Post, Community Pride president and the only member with a banking background. Post had been a banker in the area since 1985. In 1999, he began to whisper the idea of a new bank into a few ears around town. Sannerud's ear was one of the first - and most instrumental.

At a casual lunch, Post asked Sannerud if he thought Ham Lake needed another bank. He did. Then he asked Sannerud if he was interested in starting a bank. "I said it like this," said Sannerud, "I've never done it before, but I'm willing to try."

Post and Sannerud agreed to each raise half of the needed investment capital. Investor interest snow-- balled, due in no small part to Post and Sannerud's reputations in Ham Lake.

"John [Post] was a senior loan officer in the bank I used to bank with," said Olson. "When I would get a loan for the year to operate my farm, he'd always ask me, `Does that give you enough money to live on?' Nobody had ever asked me that before."

Post has additionally been instrumental in teaching the ins and outs of the banking trade to the group of new comers.

"John has been patient with all of us. We have been steadily learning as we go," said Wasche, who, along with Sannerud, found learning the banker's lingo a challenging aspect. "Three years ago, none of us knew phrases like `net interest margin' or `basis points.' Now we throw those back and forth, and read through the financials everyday. We're getting better all the time," Wasche said.

While the board was learning how to talk banking, Post was jumping the de novo through the gamut of regulatory hoops. "The two big challenges I had when starting up were raising the capital and moving the application process through regulators. It's a very structured process from the Commerce Department here in the state to the FDIC. You have to do what they say, how they say and when they say."

The board members attribute the bank's early success to the service they've been able to offer their customers.

"I was at the barber some time ago," said Sannerud. "He told me he walked into our bank and someone said, `Hi! How are you doing? How's your wife?' He said he almost fell over in his tracks."

The board members from other industries are astonished by the level of bank regulation. They conclude that strict regulation makes service the main variable-a conclusion that bodes well for the bank's future in Ham Lake.

"Banks all have to pretty much operate the same way and follow the same strict rules," said Olson. "So we know that if we can offer better service, we'll keep growing."