Minnesota’s Second-Largest Bank Has Been Sold After Years of Disagreements

The second-largest Minnesota-based bank has now been sold after years of disagreements.

The bank and the bank's trust have been arguing for 5 years over the next path in the bank's future, according to the Minnesota Star Tribune. No one was agreeing on what the future should hold.

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After all of those years which included involving judges, lawyers, and Minnesota Attorney General Keith Ellison, the bank has now been sold.

The History of Bremer Bank and the Otto Bremer Trust

Minnesota-based Bremer Bank has been around for 80 years and is the only bank in the US that's "largely owned by a charitable trust", which would be the Otto Bremer Trust.

The Otto Bremer Trust was created by German immigrant Otto Bremer in 1944 as "a private charitable trust". Otto was "a dedicated community leader involved in civic, financial, and corporate life" and that's what his trust continues to work on.

"OBT’s financial investments — strategic grants, our Community Responsive Fund, and program-related investments — deliver impact for the communities we serve. We are committed to ensuring our assets are put to work to support a better quality of life for people in our region."

Otto, as you probably guessed, also started Bremer Bank. Before he passed away, he transferred ownership of Bremer Bank to the Otto Bremer Trust.

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Bremer Bank has been very successful, becoming the second-largest Minnesota-based bank, behind only US Bank. Things got messy for the bank, though, when the bank and the trust got into a "bitter public battle" back in 2019.

Bremer Bank and Otto Bremer Trust Square Off for 5 Years

The bank had decided they wanted to do "a merger of equals" with another bank. But the trust wanted Bremer Bank to be sold.

Things were hairy because the trust owned 92% of the bank and the bank owned 8%. However, the trust "only controlled 20% of its voting shares" and the bank controlled 80%.

The Minnesota Star Tribune writes that "the trust sold some of its shares in 2019 to several private equity firms — an effort to gain control of the bank’s voting shares and prompt a sale." However, the bank didn't recognize the sale. The bank also sued the trustees "accusing them of engaging in a 'disloyal scheme'" to get more out of a sale of the bank.

It got so messy that Minnesota Attorney General Keith Ellison got involved and agreed with the bank in 2020. In 2022, a Ramsey County District Court Judge removed one of the trustees.

To not bore you with more legal stuff and to get to the meat and potatoes of the situation, long story short, there were more lawsuits, more fights, but this summer "the bank and the trust announced a settlement ending all litigation."

Bremer Bank Sold to Old National Bank

On Monday, November 25th, it was announced that Old National Bank out of Indiana had purchased Bremer Bank for $1.4 billion.

The Minnesota Star Tribune reports that, as estimated by Old National, "the deal will lead to about $111 million in cost savings, about 30% of Bremer’s expense base." This usually means "cutting redundancies", aka cutting some jobs. No word on which jobs that may include.