When the leadership of three different Minnesota banks began planning a merger in late 2020, they held their first meeting in a movie theater. It was the only way to meet face-to-face while maintaining the distance required amid state-ordered pandemic restrictions at the time. Other gatherings took place digitally over video calls.
“We had to create a shared culture at a time when you could not be together in person,” said Leann Nelson, chief operating officer for the now $1.1 billion Park State Bank.
Duluth-based Park State Bank had about $230 million in assets when its holding company Park Financial Group acquired Mesaba Bancshares, based in northern Minnesota, in the summer of 2020. The next step would be merging its two charters into Park State: American Bank of the North, Nashwauk, with about $630 million in assets, and The Lake Bank, Two Harbors, with about $150 million in assets.
That tri-part merger was a pivotal moment on Park State’s path, in less than six years, from $35 million in assets to more than $1 billion. Five of the eight members of Park State’s current executive leadership team are women: Nelson, Chief Marketing Officer Marci Knight, Chief HR Officer Mary Hendrickson, Chief Credit Officer Beth Hyduke and Chief Financial Officer Christina Cavallin. The quintet is collectively being honored as 2023 “Outstanding Women in Banking” by BankBeat magazine for their work on that pandemic-hampered merger and their contributions to the bank’s impressive growth.
Those five executives came from both sides of the merger as well as outside of it; together, they have forged a shared culture and identity from the melting pot of their differing backgrounds. They put in long hours — including some all-nighters — on their way to creating Park State Bank as it stands today, with 14 branches in northern Minnesota and one in Minneapolis.
The group’s efforts went beyond building a shared culture. They helmed efforts to craft a unified credit policy, communicate effectively to stakeholders inside and out, and navigate a core conversion to a completely new system on the same weekend as the merger closed — all while continuing to serve customers on a day-to-day basis.
Marci Knight thrived on the energy that the merger brought, using it as a creative boost to provide key messaging to internal and external stakeholders about the process. Knight and her fellow leaders took a long look at all three banks, asking themselves what had worked well for them and how they could use that information to move forward as one strong bank.
Knight, who was CMO at American Bank of the North prior to the merger, focused on communication and personal connections. She reassured customers that the post-deal institution would bring the same level of service and care to the community. “What I’m really passionate about is building those relationships and always being there for clients,” she said, which led to a revamp of the support center. Knight got her marketing start in hospitality with a degree from the University of Minnesota-Duluth, eventually moving into community banking before the former president recruited her in 2002.
Getting the deal done in such a short time was a team-building experience. “All of us worked really well together,” she said. “We all had the same vision of wanting operational excellence, that high quality client satisfaction, [and] building those deeper connections with employees across all three merged banks.”
A key part of melding the three cultures into a new, collective identity was Mary Hendrickson, a relative latecomer to the organization. Hendrickson, who joined Park State six months after the merger closed, brings a keen perspective and a lengthy set of credentials in human resources management. She spent time at Wells Fargo, serving in HR across multiple divisions and picking up experience in multiple areas of the bank. But she was looking for a change — “I wanted to be in an organization that had more of an altruistic ideal” — and brought her talents to Park State as it was settling into its new identity and culture.
Other team members have praised Hendrickson for her ability to bring a highly knowledgeable, external viewpoint to the table across every discussion. “I’m always the voice for the employee, but I’m finding myself more and more the voice for the customer as well,” she said.
Hendrickson wants to empower managers at the company of 168 people to develop teams that follow all the necessary rules but stay human and approachable while taking ownership for their work. “You can hide when you’re one of 270,000, but you can’t hide here,” she said.
While honing the new culture was an ongoing process, the mechanics of the deal had to be worked out in detail in advance. How should the composite operations function? Which elements of the previous credit policies should be kept? And whose core would be the survivor?
The answer to that last question was “none of the above,” and Nelson helped identify and navigate that part of the transition. She’d cut her M&A teeth a few years earlier, when Park State acquired the $82 million Pioneer Bank of Duluth in 2018. Her experience there, including a core conversion, was a dry run for the more complicated work of bringing three different charters together, although the pandemic added an additional level of difficulty.
An Iowa native, Nelson got her start as a personal banker in Des Moines. She spent time at two other community banks before moving to a community bank in the Twin Cities. President David Saber pitched her on joining Park State in 2016, but she initially declined. “I was not looking at the big picture of this small $35 million bank,” she said. “I thought it over and realized I was looking at it the wrong way and accepted the challenge.”
While culture building was — and is — a continuous process, the financial i’s and t’s had to be dotted and crossed well in advance of conversion weekend in May 2021. CFO Christina Cavallin and CCO Beth Hyduke stepped up to the plate admirably.
Cavallin joined Lake Bank in 2003, returning to her hometown of Two Harbors after a stint in public accounting with RSM fresh out of the University of Minnesota. A year after being hired as a controller, she was promoted to CFO at the age of 25. In 2009, she took over CFO duties for Lake’s sister bank as well and added some responsibilities for the holding company.
Starting at the smaller institution let Cavallin become familiar with all areas of the bank, something that’s been beneficial as both she and the bank have grown. “As we become bigger now, you can appreciate the challenges that are happening in other areas throughout the bank,” she said. “My career here has been just chock full of opportunity, strong relationships, constant learning, hard work, and we’ve had a lot of fun along the way as well.”
Working hard for Cavallin meant at least one all-nighter during the weekend of the closing and the core conversion. It was a lot to take on, all the women agreed, but it meant a better, fresher start for the combined institution. While everyone wanted to take the successful parts of the prior cultures and operations, they wanted to make sure the final version of the bank was its own institution.
Hyduke was key in crafting the unified credit policy, but she also put in a lot of hours making sure the worldview of the entire department meshed after the merger. She had a front row seat for the difficult task of working out problem loans when she first joined American Bank of the North in 2008. She spent time on its problem assets while it was under a public consent order, eventually working herself out of a job. “Because you’ve been in that situation, you know what not to do to get yourself back in that position ever again,” Hyduke said.
Once the bank was on solid footing again, she turned her attention to business banking before joining the credit administration department. She shadowed the chief credit officer prior to his retirement and took on his role last year. She’d gotten her start in banking as a part-time teller during college, fell in love with banking and worked her way up to the C-suite.
While each member of the leadership team had their own area of focus and expertise, they pulled together across departments to successfully navigate the challenges of the merger. All five women are quick to credit those around them for the hard work required of the deal from Chair, President and CEO David Saber — who is also chair and CEO of the holding company — down through the executive leadership team and the frontline staffers.
Being part of Park State has “allowed me to grow and to learn from some of the best mentors … including these women that I get to stand by every day,” Knight said, summarizing a sentiment expressed by every one of the five Park State honorees.
Saber is quick to reflect that praise back in abundance.
“What this group of women — along with all the other employees — has accomplished over the last few years is commendable, remarkable and I’m so proud of them for stepping up,” Saber said. “The way everyone stepped up throughout this merger was unbelievable, to accomplish what they accomplished in a very short timeframe. I could not be prouder of the honorees.
“The only reason I look good is because of the other employees,” Saber said. “I get to be in the spotlight as the CEO, but it’s really because of them.”