Banking

INFORMER :: BANKING

Price finally was right
for Highland Bank?s
first acquisition in years
St. Paul-based Highland Bank has actively pursued an acquisition for the past six years, and has bid several times. ?We?ve been interested in growing by acquisition but the cost was just too high,? says Rick Wall, CEO.

Highland just purchased Ridgedale State Bank in Minnetonka, and the deal was set to close early 2008. The difference this time: ?We hired an investment banker,? Sandler O?Neill & Partners in Chicago. ?He helped us go through the financial analysis,? to realize added value. ?Before we did it ourselves,? says Wall.

?It?s a big deal for us,? says Wall. ?We thought Ridgedale was a well-run bank. I knew Fred Winston, who is CEO, and I think highly of him.? Wall wouldn?t disclose the price. He says Winston will stay on the Highland board.

Highland has $450 million in assets now; the acquisition will add $100 million. Ridgedale has two offices, one in downtown Minneapolis and one in Minnetonka. Highland will close its Minneapolis office and operate out of Ridgedale?s office downtown. They?ll have eight locations when the deal is done.

Growing by opening new branches, or by acquiring, each has its benefits, Wall says. ?With acquisitions you get an opportunity to work with a number of new customers immediately. It?s an immediate way to grow revenue without additional expense,? beyond the cost of the acquisition itself.

He says it?s ?tougher and tougher for smaller banks to keep up with technology, not only for customers but for regulators. We?ve spent money there,? he says, and can use that investment for all of its branches.

Highland will continue to look for acquisitions, but absorbing this one is taking most of management?s time these days. ?We?re a small organization, so we want to do it right.?

Rick Wall, Highland Bank: 952.858.4753; rick.wall@highlandbanks.com;
www.highlandbanks.com