The idea that the buck stops with the bank has become ingrained in modern society. It’s a genuine surprise, then, to discover a situation where the bank is the buck’s starting line.

It’s part of a rare situation the banking sector finds itself in at the moment, where uncertainty and strain are taking their toll. For financial institutions that have followed a different path, however, it’s a time of opportunity – especially for customers.

“Most banks are struggling with earnings and their cost of funds,” says Kelly Skalicky, CEO of Stearns Bank.

“But we own almost 20 percent capital. We don’t have public shareholders pressuring us to live at low capital levels. So I think we’re in a unique position to maintain a bulletproof balance sheet.”

Carving a niche

A national leader in small business lending and equipment finance, Stearns Bank has made a point to invest and own niche areas.

“We’re privately held, so that’s family owned and 22 percent employee owned, which is very unusual for a financial institution,” Skalicky admits. “We’ve got over 500 employees, and from the day they start with us, they’re employee-owners.”

As a national provider of banking and financial products focused on business, one of Stearns Bank’s core values is to place an emphasis on people and purpose over profits. This has been the way since it was founded in the tiny town of Saint Cloud, Minnesota, over a century ago.

“Building communities and strong, diverse economies are, I think, the only way forward,” says Skalicky, whose father Norm purchased the original Stearns Bank in 1964 and built it into its current, recession-proof form.

“My parents were 30 years old when they figured out how to buy that very tiny community bank and organically start employee ownership, which was new and different at the time. So when we talk about building communities and generational wealth, it starts there,” she adds.

The ownership structure of Stearns Bank has come to define the company over the years, and acts as a vision of how Stearns would like to empower and engage communities.

“I don’t think you can separate the two,” she notes. “Building financial empowerment has been a part of our evolution over decades.”

Focused on community

Part of that approach can be found in Skalicky’s DNA.

“I’ve always been a very purpose-driven person,” she says. “I really want to make a difference.”

Initially a lawyer, Skalicky switched to the family business during the great recession.

“Half the banks failed, but we had so much capital. I came on board to help with the transactions we were doing,” she recalls.

Leveraging its strong position and national footprint, Stearns bought several failed banks in Georgia, Florida, Arizona and Minnesota.

“We were able to keep them open, keep staff employed and keep those banks in those communities,” she says. “I went to northern Georgia with my pets and spent time there because in a situation like that, the community wants to know you’re there to stay.”

After joining the board and learning all aspects of the bank, Skalicky found a real purpose and passion in her work at Stearns.

“We have about 35,000 small businesses as clients, and one of our advantages is that we hire and maintain a very stable, long-term reception team,” she says. “If a client calls, our team’s KPI is answering the phone on the first ring. Why does that matter?

“Because whoever’s calling only has so much time. They’re between appointments. They might be a landscaper, a farmer, a doctor – their time matters, so if they can get someone on the phone to answer their question quickly, it’s a real differentiator for our customers. They still can’t believe they’re speaking to a human being, and they tell us all the time, ‘That’s what I love about you.’”

Stearns Bank has grown far beyond Norm Skalicky’s purchase, but it hasn’t outgrown the communities it serves.

“We can still serve them, and we understand the importance of that,” Skalicky says. “But we’re big enough that we’re always looking for acquisitions. We have the capacity to grow even more.”

The bank also has the coffers to help small community banks across the United States.

“I don’t want to replace those banks, but I can help provide a boost if they’re unable to do a US$5 million loan,” she says. “It might be above their limit, but the customer doesn’t want to go to a big bank. So we’ll come in and supplement what that small bank is doing.”

Commitment to togetherness

Skalicky stresses the importance of partnerships over competition.

“You don’t want to come into a community and take its bank’s business away,” she says. “There’s no need to do that. There’s enough business for everyone, and there are so many underserved sectors.”

In 2024, Stearns Bank launched its Salaam Banking Division, the only national Islamic banking offering in the United States.

“Around the world that’s much more common, but they don’t do it here,” she says. “The big banks aren’t interested because it’s just too specialized, but we’re in a great position to do that.”

Stearns’ other major point of difference is that it’s majority-owned and majority-governed by women.

Skalicky believes there’s a clear, straight line from Stearns Bank’s entrepreneurial history to a future of purposeful and profitable initiatives.

“It fits completely,” she says. “Our whole goal at Stearns Bank is to show the path to other banks. This can be done. The more mainstream we can make something, like Salaam Banking or increasing access to banking for those underserved, the better. The market is so vast we can’t possibly fill it, so we need others to see our model and join in.”