Park Financial Group, Inc. has reached a stock purchase agreement under which the Minneapolis-based firm will make an investment in Mesaba Bancshares of Grand Rapids through a purchase of the founding shareholder’s shares. In a Tuesday announcement, Park said the transaction will position both holding companies for continued long-term success.
Terms of the investment by Park Financial Group have not been disclosed. Although Park State administrators described it as “significant,” it will not initially be a controlling interest. The transaction, which remains subject to regulatory approval, is expected to close in the fourth quarter of 2018.
Park Financial Group will have representation on the boards of directors for Mesaba Bancshares and its two bank subsidiaries – American Bank of the North and The Lake Bank. Current management and employees will play key roles in the continued success of the organization, Park said.
“This is an exciting development for our banks, our customers and the communities we serve,” Mesaba Bancshares founder Chuck Gesme said. “Joining forces with Park Financial Group will allow us to be even more competitive in the marketplace, continue to grow in Northern Minnesota and further expand our Twin Cities presence. It also ensures that our customers will continue to receive the high-touch customer service they are accustomed to while working with familiar American Bank of the North and The Lake Bank employees.”
“This transaction allows for both banks to continue to grow and prosper within the communities they serve,” said Rob Marwick, chief executive officer of American Bank of the North. “We believe the Park Financial Group partnership will help us maintain our market leader position as the largest community bank in Northeastern Minnesota.”
“We are thankful the Gesme family chose our organization to partner with going forward. This partnership further confirms our commitment to Duluth and the communities of northeastern Minnesota, while strengthening our ability to compete in the Twin Cities, and is a long-term natural extension of our franchise in those markets,” said Park Financial Group’s Chairman and Chief Executive Officer, David Saber.
Mesaba Bancshares, Inc. has more than $70 million in equity capital. On a consolidated basis, the combined assets of both banks were $675 million as of May 31.
Park Financial Group, Inc. is a holding company that operates primarily through its wholly-owned subsidiary, Park State Bank. Park recently acquired Pioneer National Bank of Duluth through a merger transaction, and the combined bank now has four offices in Duluth and one in Minneapolis.