Call 2020 the year of the drive-up. Ken Organ, vice president and manager of the Northfield, Minn., branch of Heritage Bank would certainly concur.
Organ is a long-time resident of the vibrant college town, situated 45 miles straight south of Minneapolis, where the bank opened a de novo branch 16 months ago.
“We were talking about doing something different,” Organ said. “My first thought was to have a basketball court.” Organ described basketball as a priority with his family, and he’d been intrigued by the idea of a court installed inside a bank since learning about First Allied Bank in Owego, Ill.
Sean Raboin of HTG Architects, who is bullish on co-branding, helped bank leadership turn its ambition toward a partnership with a coffee shop instead.
“We thought it was probably more realistic,” Organ said. Because the bank was family-owned, it wanted to partner with a small, family-owned business. Organ had no connection to Joan and Jim Spaulding, who operate the HideAway Coffeehouse in Northfield’s central business district, other than having been a regular customer. “I walked in cold and approached Joan and asked if she wanted to discuss a venture out at our bank,” Organ said.
The coffee purveyors had already been thinking about expansion in order to give their adult daughter an opportunity to join the family business.
HTG handled the design for the bank side of the business and Raboin suggested a separate firm to design the restaurant side. “As we went through the design discussions, we were not going to have a coffee drive-thru, just a patio,” Organ explained.
The idea with co-branding is to lure people inside the building and then invite them to consider what the bank has to offer. “We wanted people inside, mingling,” Organ said.
The 7,000-square-foot brick, stone and glass building opened Dec. 30, 2019.
But 2020 was not exactly the year of the casual encounter. While still in the drawing phase, the Spauldings (including Sarah Spaulding who owns and runs HideAway Vault) convinced the bank to include a drive-up lane for its coffee shop in addition to the one already planned for the bank. Though Organ had initially dismissed the coffee drive-up as contrary to the bank’s desire to co-brand, “the reality is, you need to have both,” he said.
Organ is grateful for the access both bank and coffee shop drive-up lanes have provided. One can swing into one lane to pick up a morning espresso then circle around and drive right into the banking lane and complete a transaction. Organ has seen this flow again and again during the long stretches when Minnesota prohibited inside dining.
In the auto lane for coffee, the middle panel of a three-panel menu is digital and dedicated to promoting products, services or events important to the bank. Heritage Bank has been proactive with marketing, “without being pushy,” Organ said. The bank also distributes wooden nickels that feature the bank logo on one side, good for a free beverage.
The original goal for the de novo branch remains paramount: To create a bank that feels comfortable and casual and inviting, Organ said. “We aren’t ‘suit and tie’ people.” In that regard, he thinks the HideAway Vault is a natural fit and “will be successful for us.”
The bank’s Northfield expansion was part of a growth strategy that included a rebrand. The bank was founded in 1930 as Farmers State Bank, West Concord, Minn., but had seen a steady decline in the number of family farms it could serve. The name change was designed to alter customer perception away from “we’re a bank for farmers,” Organ explained.
With 2020 also being “the year of the mortgage,” the bank’s timing here was spot on. In a year where they faced repeated and lengthy lobby and restaurant closures, Heritage Bank grew to $73 million from $50 million. “A lot of that is deposit growth, with people saving more money,” Organ said, adding his hope that loan growth would follow.
Organ’s original idea for a basketball court did fade, though not immediately. “When they were digging the basement, we did ask the builders to explore the possibility of digging deeper for that half-court,” he said. The density of the rock and the depth of the water table was too much obstacle to overcome.