Spotlight On: Kelly Skalicky, President & CEO, Stearns Bank N.A.

Spotlight On: Kelly Skalicky, President & CEO, Stearns Bank N.A.

2022-07-15T04:39:15-04:00December 22nd, 2021|Banking & Finance, Minneapolis-St. Paul, Spotlight On|

Stearns Bank N.A. president2 min read December 2021 — Stearns Bank N.A. has generated success across a variety of markets, from supporting small businesses with equipment financing, SBA and USDA loans, and PPP loans to expanding fintech services and developing more affordable housing. “As a financial service provider, you must accept that competition is, and will continue, increasing. The increased competition is an impetus to create more strategic partnerships and alliances that will be good for customers and the market,” Kelly Skalicky, Stearns Bank President & CEO, told Invest:.

What have been some key successes for Stearns Bank in 2021 and how are your priorities shifting?

More than five years ago, we invested in the framework and security of our digital services and focused on building out our deposit platform and digital delivery channels. Our large real estate developers have up to a hundred accounts with us. Our services include customized verification, allowing multi-state developers to move quickly and wire money from their phones to serve projects in multiple states. We pair that convenience of technology with a highly personal touch by committing to answer incoming calls on the first ring. Because we do national lending, we need to be available by cell phone, coast to coast, to serve our nationwide customer base. We have data points around that and pride ourselves on being available to our customers, however and whenever they may need us. Our customers don’t work 9 to 5, so we can’t either.  If it’s important to our customers, it’s urgent for us.  Our unmatched access and ease of doing business is a big win for our customers. 

What are the chief opportunities and corresponding challenges Stearns Bank is strategizing for now? 

As the U.S. economy continues to improve, there are still areas of the country where banking and financial services are difficult to access – particularly in rural areas and lower income communities. As a member of the OCC’s Minority Depository Institutions Advisory Committee, I see opportunities for banks to collaborate in bringing more banking and financial services to the underbanked. Minority deposit institutions understand some of the unique needs of their communities and it’s critical we find ways to partner to bring financing to these communities and help businesses grow and prosper. Add to the opportunities to support the underbanked, the economy is creating market changeover as business owners choose to retire early, or sell or transfer their business. If businesses are thinking of consolidating and entering new markets, we can finance those consolidations and go to new markets with those businesses. We are one of only 29 lenders across the country that are designated a multi-state USDA (United States Department of Agriculture) Lender and for our size, that is a big distinction. USDA covers all loans in rural areas of 50,000 people or less and we have a representative in Washington, D.C., to support that. Stearns Bank has so much expertise and so many different ways to finance borrowers’ growth, through conventional loans, construction, SBA or USDA lending, equipment financing. Whatever best serves the customer. The advantage for us is our size, where we have a lot of capacity to lend but are small enough that customers will have our cell phone number and we know them well.

Which business sectors and industries have reached or surpassed their pre-pandemic levels of activity?

The industrial sector is looking good. We are doing a lot within the affordable housing sector, which is a huge need throughout the U.S. Not only do we do low-income housing tax credit financing (LIHTC) and HUD-VASH across the country, but every state is developing new affordable housing programs and we are on the cutting edge of that. Every loan we administer involves Property Assessed Clean Energy (PACE) financing, for any type of energy efficiency that can be built in. At Stearns Bank, 40% to 50% of our projects have some sort of PACE component. Infrastructure, especially broadband equity expansion, will be critical to leveling the playing field. It will also give the added benefit of having more access to better employees across the country. There will be more bridging between rural and urban and if you are scanning for prospects, that will be an area to find unexpected opportunities.

What have been some changes in demand for Stearns Bank services and what does that say about the market?

We’ve been a Small Business Administration (SBA) Preferred Lender for over 20 years. The PPP loans were administered by the SBA and we built out our speedy SBA platform to process them quickly and efficiently, reinforcing our reputation as a crucial resource for businesses. We have 40 team members focused solely on SBA lending and they understand what is needed. There’s going to be continued opportunities in SBA, but you need to deliver effectively and efficiently and have a strong technology platform to provide fast decisions and fast funding of SBA loans. For most small businesses, the biggest problem is cash flow to support new jobs and most banks will not finance working capital, unless the business has real estate to pledge which many businesses don’t. We will finance working capital, and we’ll look at the projections of going-forward income to support loan repayment. We have the experience along with the insights and tools to help customize financing and give customers options that work best for their business, for the short and long term .

What are the evolutions you are seeing in terms of fintech and changes in brick and mortar?

We have about a half dozen fintech projects in the works and ready to launch. What is beautiful about fintech is that they usually have a very focused product or service for underbanked and underserved markets. We do not fear that because it informs us and the market, and we are a great bank partner. We are one of the few banks that love regulations. We believe they are good for banks and customers, keeping transactions secure and safe. As a niche lender, Stearns Bank is a great fit to pair with fintechs to identify unique niches and gaps where services are needed. We will see more of those alliances and that is good for the industry and great for customers, and ultimately good for Stearns Bank.

 What challenges related to interest rates and inflation do you see on the horizon?

Although I don’t have a crystal ball, I think rates will probably be flat until the third or fourth quarter of 2022 and then may rise in smaller increments, possibly several times in late 2022 through 2024. The supply chain disconnect has been challenging, but has been an equal-opportunity problem, affecting nearly every type of business, but they are adjusting well. As a financial service provider, you must accept that competition is, and will continue, increasing. The growing competition is an impetus to create more strategic partnerships and alliances that will be good for customers and the market.

For more information, visit: 

https://www.stearnsbank.com/

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