There was a time when the only thing Brenda Franke knew about a loan was “how to make a payment on one,” she laughed. The affable vice president and Eden Prairie, Minn., branch manager for $390 million Star Bank has spent most of her 25-year career working in the operations side of a bank. But in 2013, after yet another loan processor she’d trained in construction lending left the bank, she decided it was time for her to step in.
And so Franke, a 2022 BankBeat “Outstanding Woman in Banking,” set forth a plan to manage the bank’s construction lending portfolio, which has grown each and every year since.
“It’s self-taught,” Franke said of construction lending — complex short-term financing that includes multiple draws to home builders as certain building processes are completed. She admitted she initially didn’t fully understand every aspect of the process and offered a nod of respect to those who came before her. “We just kind of ran with it and built something.”
In her first year, Franke set an annual goal of $60 million. She got there right away. Residential interim construction loan volume was $78 million by 2017, hitting $90 million by year-end 2020. It exploded in 2021 to $160 million. Such performance is “nothing short of spectacular,” said Katie Wahlquist, SVP and chief administrative officer, who was similarly recognized as an “Outstanding Woman in Banking” by BankBeat in 2018.
“It’s crazy how it evolved,” said Franke. With interest rates up this year, the total volume of loans is expected to fall. “That’s okay. We haven’t had a break in three years.”
Exhaustion aside, Franke loves what she does, managing a branch, overseeing a segment of lending, and recently taking on the role of landlord for a dozen or so upstairs business tenants.
Franke joined the predominantly ag-focused community bank as it opened its first Twin Cities office in 2010. She sits in on board meetings and hears all about grain prices and how the crops are faring; when it’s her turn, she shares construction updates (like roof trusses shooting up in price) and will know exactly which building products are running behind schedule (a 34-week delay on windows in 2022).
“That’s what makes us so special as a bank, because we do so many different things,” she said. “But we’re all one big team: A family.”
Franke was 16 when she was hired as a teller at First National Bank of Farmington. Her first try at college didn’t stick, so she kept at banking, stretching into operations. A few years later, she returned to school and earned an associate’s degree in accounting. She later earned a certificate in Supervisory Management, all while honing her organizational chops at community-based financial institutions in the southern stretch of the Twin Cities metro.
She attributes her success to having “a nerd brain” and being “a checklist junkie.” Her love of process has allowed her to introduce some efficiencies into the construction loan process, Wahlquist said. “For example in 2021, she utilized Adobe Acrobat to allow customers to e-sign their documents. In doing so, she has eliminated about 80 percent of the paper that used to be printed and filed.”
Her process reduces the risk for lost files, supports remote access for work-from-home employees, and simplifies regulator access during bank exams, Wahlquist explained.
“I am always amazed at the level of efficiency, composure, professionalism and kindness that Brenda exudes through every form of communication,” said Kathryn Scheldroup of Stewart Title of Minnesota, who called Franke “ahead of her game” and a “leader” in her work with both homeowners and builders.
The nature of these loans is fairly static but the projects are all unique, which adds to their appeal, Franke said. As the interim lender, Star Bank gets referrals from real estate agents, builders and home mortgage giants, who aren’t nimble enough to succeed when responsiveness matters. At Star Bank, the construction loan generally has a 12-month term, though that’s been changing because of supply chain delays.
“Brenda and her team of five serve the bank with excellence by providing turnkey service to builders, prospective homeowners and end-loan lenders,” Wahlquist said.
When she’s not following a builder through construction, Franke devotes time to Operation Home Front, which supports military families. A self-described “gamer” with cats named Mario and Luigi, Franke is a fan of escape rooms. That process taps into her love for methodology and process and logic, albeit under pressure.
It’s a good thing Franke relies on those checklists. Since taking over the construction lending operation at Star Bank, Franke has worked with 450 different builders, 87 title companies, and 307 end-loan lenders from 87 different banks and/or brokers, helping Star Bank build a reputation for specialty lending in new home construction in an area where the economy remains strong.
“It’s really fun being a part of somebody’s dream,” Franke said.