Don't call it a bank.
Just days before crews replaced Alerus Financial's logo on its downtown Grand Forks headquarters this week, company executives said they think of themselves as operating a financial services company. After all, more than half of its revenue now comes from sources like mortgage or retirement business.
"We're enjoying some pretty good success with Alerus," President and CEO Randy Newman said.
Alerus Financial is now going simply by Alerus, a change that's meant to better reflect the diversity of its offerings.
That rebranding comes as Alerus undergoes rapid expansion. Fueled by a flurry of acquisitions and in-house growth, the company has expanded its workforce by 62 percent in the past six years, from 392 in 2009 to 636 in March, according to the Federal Deposit Insurance Corp. Its banking assets have nearly doubled in that time, from $791 million to $1.5 billion.
And Alerus isn't the only local financial institution to expand in recent years.
Choice Financial acquired Great Plains National Bank last year, the first such move the bank made since it formed in 2001. It expects to complete a similar acquisition this year to further expand outside of the Red River Valley, push its assets over $1 billion and increase its workforce to about 260.
Leaders of both institutions said the favorable economic conditions in their communities have helped them grow, but industry-wide trends like bank consolidation have played a part.
Alerus has completed 16 acquisitions since 2002, five of which have happened in the last three years. Ten of those moves involved fee income businesses, like retirement plan providers or mortgage companies.
Recent deals included the purchase of Interactive Retirement Systems in Bloomington, Minn. and Retirement Alliance Inc. in New Hampshire. While its headquarters remains in Grand Forks, Alerus has employees in Michigan, Arizona, New Hampshire, Fargo, West Fargo and the Twin Cities.
Today, Alerus employs 286 in the Twin Cities, as well as more than the 211 in Grand Forks and Northwood, N.D., according to the company.
Alerus' growth comes as the number of commercial banks has starkly decreased over the past two decades. There were around 15,000 banks in 1990, which shrank to just over 6,500 in 2014, according to numbers compiled by Alerus.
Alerus cited deregulation, increased merger activity, bank failures in the early 1990s and after 2008, and fewer new banks after 2008 for that trend. Two of the six banks it has acquired since 2002 were failed.
Sally Smith, president and CEO of Buffalo Wild Wings and an Alerus board member, said Alerus was a "very strong bank" going into the recent financial crisis.
"They identified a strategy to grow by acquiring banks," she said. "I really like their strategy. You want to be able to grow in the markets you are in by adding smart loans."
Rick Clayburgh, president and CEO of the North Dakota Bankers Association, said the increased regulatory costs stemming from the recent financial crisis are driving some mergers and acquisitions. But he added some moves are "focused on the strengths of the two joining institutions."
"One will bring something to the table that the other may not have had," Clayburgh said. "By bringing the two together, you're putting together a stronger organization."
Choice Financial CEO Brian Johnson said acquisitions help them invest in new technologies like mobile banking and business-to-business products.
Alerus has to consider a number of factors before and during an acquisition, Newman said. That includes expected customer retention and "cultural integration" of the new Alerus employees.
Kris Compton, Alerus' chief operating officer, said they have some training and coaching initiatives to help ease new employees into the company.
Johnson said "it's a big change" for the new employees.
"It's a lot to absorb," he said. "But that's where we try to focus on not just buying anybody. It has to have a good cultural fit."
Despite Alerus' recent expansion and acquisitions, Newman said they're remaining thoughtful about future moves.
"We don't want to grow too fast," he said.
Still, he expects their business model to serve them well into the future. Newman pointed to a strong home market in the Twin Cities for their mortgage business, while their retirement services touch 49 states.
"We tried to build the income away from the traditional banking model," Newman said, citing the company's name change from First National Bank of North Dakota to Alerus Financial in 2000. "That has proved to work very well for us."