Bremer could draw large suitors.

Byline: William Morris

The possible sale of St. Paul-based Bremer Bank could be an attractive proposition for larger financial institutions looking to gain a foothold in Minnesota.

The Otto Bremer Trust, which owns nearly 90% of Bremer Financial Corp., announced Monday it intends to seek a buyer for the bank. In a press release, the trustees presented a sale as a potential boost to both the bank and its parent trust.

"A successful transaction would enable an incredibly significant increase in [Otto Bremer Trust's] philanthropy and allow us to expand our work in Minnesota, North Dakota, Wisconsin and Montana," Trust Co-CEO Daniel Reardon said. "We also believe a strategic combination with a larger financial institution will strengthen [Bremer Financial Corp.'s] ability to serve its customers and will provide good jobs and careers."

Such a sale could find a number of interested buyers, said Blake Nelson, a Hellmuth & Johnson attorney whose practice includes merger and acquisition planning and banking law. Bremer could follow in the footsteps of Anchor Bank and KleinBank, both Twin Cities institutions that have been acquired in the past 18 months by Evansville, Indiana-based Old National Bank.

"Most of the recent bank acquisitions have been by banking companies from out of state looking to enter the Minnesota market," said Nelson, who also served for several years on the board of Minnesota Bank & Trust prior to its merger with Minnetonka-based Signature Bank. "Clearly, I think out-of-state suitors will likely now have their eyes on Bremer."

Such a sale will first have to clear several obstacles, including opposition from the bank itself. Otto Bremer trustees hold three positions on the bank's 10-person board, and in their press release the trustees said they were at an impasse with other members of the board. The trust has called for a special meeting of Bremer Bank shareholders to replace some or all of the other board members.

Asked for comment, Bremer Bank provided an all-staff memo sent by bank CEO Jeanne Crain, who said the non-trustee board members had unanimously rejected an earlier proposal to explore a sale.

"Rest assured, I and the rest of the leadership team are keenly focused on doing what is in BFC's best interests while continuing to serve our customers and communities," Crain wrote.

The trustees are investigating a sale, Trust Co-CEO Brian Lipschultz said in the statement, because "changes in the financial services industry...