Community Spirit: Northeast Bank

Andy Martin and Merri Schreiber of Northeast Bank worked with East Side Neighborhood Services president Kristine Martin to finance the nonprofit’s remodel of its daycare center. Photo: Doug Knutson

A lot has changed in the Minneapolis neighborhood around Northeast Bank, but one thing has remained constant: its relationship with East Side Neighborhood Services, a nearby nonprofit. The longstanding bond continues to benefit the community and the bank, from attracting young talent to bringing national acclaim.

By Eric Best

Northeast Bank’s roots are intricately connected with East Side Neighborhood Services (ESNS).

Since the community bank was founded more than 70 years ago, the nonprofit has been a constant partner, collaborator and customer. But even as the neighborhood and clients change, the two organizations continue to find new benefits to their longstanding connection.

“I’m 40 years in the bank, and [the relationship] predates me by quite a bit,” says Thomas Beck, president and CEO of $465 million-asset Northeast Bank, which operates three branches in Minneapolis and its northern suburbs. “There’s a synergy that helps sustain the survival of all the organizations. It’s just good business to make sure your community is doing well.”

The two planted seeds not far from each other. Northeast Bank was founded in 1947 as 13th Avenue State Bank. (The original building is now a brewery.) ESNS, founded in 1915 as the North East Neighborhood House, was first located just two blocks up the street and, despite two moves, remains within walking distance of Northeast Bank’s current location. The organization provides education, employment, health and transportation services to residents around the Twin Cities metro.

Their friendship is complex. (For more on this, see the Banking Northeast, then and now sidebar, at the end of the article.) Northeast Bank staff helped conceive and sponsor one of ESNS’ biggest annual fundraisers, which has relied on bank volunteers for the past 20 years. Northeast Bank has donated more than $54,000 to ESNS in the past decade alone, though the bank’s financial support dates back to the 1950s.

The bank and its staff were at the table when ESNS launched the capital campaign to develop its current building, which has a conference room dedicated to Northeast Bank. “Because Northeast Bank is our longest-standing relationship in the community, we really wanted to have them be part of that,” says Mary Anstett, ESNS’ senior advancement officer.

Most recently, Northeast Bank provided the funding for the expansion of the nonprofit’s childcare center. ESNS president Kristine Martin had the option of working with another bank, but she says Northeast Bank’s loan officers thought creatively to use tax-increment financing to get ESNS a better rate and give the community bank a tax break—a win-win scenario. “We would not have gotten that if we had gone with a large bank that isn’t in the community,” Martin adds.

Suzanne Sjoselius of Northeast Bank (center) and East Side Neighborhood Services’ president Kristine Martin and senior advancement officer Mary Anstett pose with banners detailing the nonprofit’s 104-year history.

A gift that keeps on giving

Northeast Bank and its community continue to see a return on the bank’s investment in ESNS, staff say.

Beck, who has two millennial children, says the community bank’s volunteer efforts and philanthropy set it apart from other financial institutions in the eyes of socially conscious young people, which is especially important given Minneapolis’ extremely low unemployment rate. “I’m finding out as we hire people that they want something different,” he says. “They want something more. They want to make a difference, more than just a paycheck.”

Suzanne Sjoselius, the community bank’s director of risk management and marketing, says the bank will continue to benefit from these younger employees taking up the partnership with ESNS. “Tom [Beck] and I will go someday and somebody else will replace us, but hopefully that next generation of bankers is going to be out there with their feet on the ground working with the community,” says Sjoselius, who sat on the ESNS board for 14 years.

Northeast Bank’s giving hasn’t taken away from the business. Northeast Bank has maintained an “Outstanding” CRA rating for more than 20 years. “We still make sound lending decisions, but we’re still lending to communities where there’s a need,” Beck says.

Northeast Bank’s commitment to its community and employees was recognized nationally in 2013 when it won the Jefferson Award, one of the country’s highest honors for public volunteerism. Sjoselius—the bank’s resident ESNS “champion,” Beck says—described the award as the “highlight” of her career. Northeast Bank’s work with ESNS was a significant part of why it won. “Both organizations share a value, and that’s inclusion of all members of the community,” she says. “East Side has been a good fit for me because they operate with that too.”

Banking Northeast, then and now

Northeast Bank and East Side Neighborhood Services (ESNS) have been pillars of their northeast Minneapolis community since the first half of the 1900s, when the area became home to immigrants coming from Poland, Slovakia and Lebanon.

ESNS started as a settlement house for these new Americans. Just down the road, Northeast Bank, then 13th Avenue State Bank, was the bank of many small-business owners, including some whose second-, third- and fourth-generation successors are still customers.

“We have had the beauty of having long-term relationships like that with other businesses within our community. We pulled up a report the other day and we have 11 customers over 100,” says president and CEO Thomas Beck.

Today, staff at both organizations say they’ve grown and adapted to meet the needs of these aging clients while providing for new residents, including a generation of immigrants coming from Somalia and East Africa. For the bank, that’s meant adding digital services in line with much larger banks, according to Suzanne Sjoselius, director of risk management and marketing. For ESNS, which still hosts Polish language classes, it’s meant developing new programming around new clients’ unique needs.

Sjoselius describes Northeast Bank’s approach to banking and community involvement as stemming from the quintessential Northeast spirit of interconnectedness.

“I think it is the reaching out to build those collaborations to make a happier, healthier neighborhood, and I think that hasn’t really changed over all the years,” she says. “I think people change. I think neighborhoods change, but I think that’s uniquely Northeast.”

East Side Neighborhood Services started in 1915 as North East Neighborhood House, which formally opened as a social facility in Drummond Hall in Minneapolis.

Eric Best is deputy editor of Independent Banker.