Grand Forks-based Alerus Financial has acquired another Twin Cities bank, the company announced Friday.

Randy Newman, the chief executive, said the acquisition brings Alerus' banking assets to a total of about $1.1 billion -- a hefty growth since the beginning of 2009, when assets were $700 million to $750 million.

Friday's announcement, which will acquire deposits and loans of the three branches of Prosperan Bank based in Oakdale, Minn., also adds about 5,000 customers to Alerus, he said. The more than 50 Prosperan employees have become Alerus employees.

Newman said his company first entered the Twin Cities market in 2003 when it bought a retirement plan administration company. A number of company acquisitions have followed, and the company opened a bank branch in the area three years ago.

In the last three years, Alerus has built up $275 million in deposits and $200 million in loans in the Twin Cities area. "We're pretty excited about our market development here," he said.

Opportunity

It's the second failed bank acquisition Alerus has completed in 2009, Newman said. Officials expected to reopen the branches in the Minneapolis-St. Paul suburbs of Oakdale and Maplewood this morning as Alerus Financial, while the Minnetonka branch will reopen Monday morning.

Prosperan was closed Friday by the Minnesota Department of Commerce, the 118th bank that failed in the country in recent times, he said. The Federal Deposit Insurance Corporation has determined problem banks and looks for sound banks, such as Alerus, to acquire their finances.

Newman said Alerus has assumed all the deposits and loans, and there is no risk to depositors. The FDIC gave a loss-share agreement that provides some protection to Alerus from losses, he said.

"Basically, we're helping the FDIC and the taxpayers of the United States collect the bad loans," he said.

Most Midwestern banks are fairly strong right now for a variety of reasons, Newman said, but some banks in the Twin Cities region started up with wholesale deposits and made risky commercial real estate loans that became problems during the economic decline.

That has led to some bank failures, but it also provides "a great opportunity" for financially sound banks like Alerus to expand its presence in Minneapolis, he said. "This really allows us to build out our market development."

Newman said he wouldn't be surprised if Alerus continues to explore these opportunities in a selective manner, especially in the midst of these "interesting times" that will provide a lot of changes in banking.

"For banks that have strong balance sheets, good capital, good leadership, these are great opportunities to look at situations like this and to expand your marketplace," he said.

Reach Johnson at (701) 780-1105; (800) 477-6572, ext. 105; or send e-mail to rjohnson@gfherald.com.

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