A drone photo of Stearns Bank’s corporate headquarters in Saint Cloud, Minnesota (Courtesy Stearns Bank for Native Business)
Stearns Banks has a long-standing reputation as one of the top performing banks in the nation.
The rural Minnesota-based bank with $2.2 billion in assets is one of the top 15 most active U.S. Small Business Administration (SBA) lenders, and among the top 50 leading banks for equipment finance.
“If we had one secret, it’s our people,” said Kelly Skalicky, President and CEO.
Stearns Bank, which counts about 585 employees, is 20% employee owned.
“That’s why we pick up on the first ring. That’s why we have employees that are 10, 15, 20-year tenured with all of that experience that ultimately benefits the customer,” Skalicky said.
Skalicky has been instrumental in instilling that company culture, while spearheading Stearns Bank’s considerable growth.
Two years ago, Kelly Skalicky succeeded her father Norm Skalicky as President and CEO of Stearns Bank. Norm, who remains chairman, led the St. Cloud-based bank since 1964, when he and his wife purchased the bank founded in 1912.
For Kelly, growing up, bank loans and refinancing were dinner table conversation.
Years later, she would earn her law degree and provide legal counsel to Stearns Bank for more than 20 years, before coming on board as general counsel for 6 years, and ultimately being named President and CEO of the family business.
“We are in central Minnesota. The little farming town I grew up in was home to about 1,500 people. We’ve never moved our headquarters,” Skalicky told Native Business. “We’re stayed in central Minnesota and expanded our business nationwide. We understand small communities; we understand how important banks are and access to financing is for these small communities.”
During the last Great Recession, the Federal Deposit Insurance Corporation (FDIC) asked Stearns Bank to consider acquiring some banks that had failed. Ultimately, Stearns Bank acquired nine different banks in Georgia, Florida, Arizona and Minnesota from 2009-2012, performing 10 asset acquisitions.
“During that time, we acquired a little over a billion and a half of assets and deposits,” Skalicky said. “So it was a very intense time for us as an organization — and going into those communities and making sure that the communities and the personnel knew we were there to stay.”
That’s why Kelly Skalicky joined Stearns Bank full-time as general counsel in 2012 — to turn those banks around. Prior to that, while serving as legal counsel to Stearns Bank for 20 years, she practiced Indian law with Gover, Stetson & Williams. “We did a lot of work with Pueblos and various Tribes, their corporate governance, and their Tribal entities,” Skalicky said. “Given my background in Tribal law and practicing, I understand the diversity of needs and resources available to Tribes and Tribal members,” Skalicky added.
Now as President and CEO, she views her job as managing risk to ensure Stearns Bank is in the right position to take advantage of opportunities.
Among those opportunities is leveraging the great equalizers today for her clients to pursue rural economic development: technology and renewable energy.
“Small businesses can punch above their weight with the right technology; they can access so many more resources today than they used to,” Skalicky said.
Along those lines, Stearns Bank has invested in the most advanced mobile banking services for its 33,000 customers nationwide. “People are much more mobile now. Those that are in rural communities have to have equal access to the most advanced services,” Skalicky said.
Skalicky also sees renewable energy as the next frontier — and Stearns Bank can help finance that. “With renewable energy, there are state mandates. Every utility is now mandated to let the renewable sources plug into the grid,” Skalicky said.
Whether it be wind towers or solar, the common denominator is real estate. “You really need some space around you. Rural America, they’ve got that advantage,” Skalicky said.
“We see it, and we understand it,” Skalicky added. “It’s a niche that we can really relate to, and service people who are interested in that.”
Stearns Bank works directly with Tribes, Tribal entities and Tribal member-owned small businesses both on- and off-reservation, and is adept at providing customized finance solutions.
Customized Finance Solutions
Stearns Bank performs a wide variety of lending, including a large amount of small-ticket equipment finance. “This year, for example, we’ve done over 10,000 equipment finance deals at an average ticket size of $50,000. It can be from a trailer to a skid steer to medical healthcare. Equipment finance is something that we do all over the nation,” Skalicky said.
While $50,000 is the average equipment finance loan size, Stearns Bank has facilitated equipment finance deals up to $2 million each.
“Under the U.S. Department of Agriculture & Rural Development (USDA), you could either do that as a BIA – IEED (Bureau of Indian Affairs – Indian Energy & Economic Development) loan, or you could do it under the USDA Community Facilities Direct Loan & Grant Program,” Skalicky advised.
Stearns Bank is also well-versed in finance restructuring. “We recently did a restructure of financing for a Tribe out west, where they separated their Tribal debt from their casino debt and restructured both,” Skalicky shared.
Across Indian Country, Stearns Bank frequently performs low-income historic housing financing, and can help Tribes facilitate the process of leveraging New Market Tax Credit financing while working hand-in-hand with Stearns and Community Development Financial Institutions (CDFIs).
Additionally, Stearns Bank handles SBA loans nationwide — for small business owners, averaging a little over $300,000, to commercial deals for anything from construction to refinance, ranging from a half a million dollars up to $15 million.
“What we do really well is anything that is really time-sensitive,” Skalicky emphasized. “Because we’ve been doing construction lending across the nation for over 20 years, we’ve got a really experienced construction loan department.”
And that’s why Stearns Bank’s motto is We get the job done. “We can move fast, make decisions fast, and get it done,” Skalicky said.