Published May 08 2010
A century of service: First International Bank and Trust
On Jan. 7, the fourth-generation banking enterprise reached $1 billion in assets, said Stephen Stenehjem, chairman and CEO.
On May 1, the Watford City, N.D.-based financial institution turned 100 years old.
First International Bank and Trust now operates 21 locations in North Dakota, Minnesota and Arizona, four of them in Fargo and West Fargo.
Stenehjem’s grandfather, Odin Stenehjem, launched Farmers State Bank at Arnegard, N.D., on May 1, 1910 with his brother Gerhard Stenehjem, who served as bank president from 1917 to 1930.
The Stenehjem brothers grew up in Spring Grove, Minn. An early 1900s offer of 160 acres of free land lured them to western North Dakota’s McKenzie County where they began farming.
As the county grew, the Stenehjem brothers saw an opportunity to open a bank, said Stephen Stenehjem.
“Back then, you only needed $15,000 to capitalize a bank,” he said. “Actually, $10,000 is what they started with.”
In 1934, the business was moved to Watford City, N.D., and became First International Bank.
Odin Stenehjem served as president from 1949 to 1964. His son, Leland Stenehjem, became president in 1965, serving until 1992 when his son, Stephen Stenehjem, was named president.
In 1984, the Stenehjem family acquired First National Bank of Fessenden, N.D., which purchased Midwest Federal Savings and Loan offices in Harvey, N.D., and Fargo in 1990. The name was changed to First International Bank, and the offices were operated as separate institutions until they merged in 1993.
“That was a big move for us. We basically doubled in size overnight when we bought the Midwest Federals,” Steve Stenehjem said.
Assets in the Fargo banks have grown from $13 million in 1990 to $200 million today. “Fargo has certainly been a good spot for us to grow,” he said.
In 1992, the business was renamed First International Bank and Trust. By the end of 1993 it had locations in Watford City, Alexander, Williston, Killdeer, Minot, Fessenden, Harvey and two offices in Fargo.
First International acquired two Metropolitan Federal offices located in Scottsdale and Mesa, Ariz., in 1995, and another location opened in Gilbert, Ariz., in 2007.
A second location opened in Williston in 1995 and in Minot in 1997.
A new location was opened in West Fargo in 2000 and another in Scottsdale, Ariz., in 2004. Farmers State Bank of Elgin, N.D. was acquired in 2006, and a south Fargo location opened that June.
In May 2009, First International Bank and Trust acquired banks in Staples and Motley, Minn., that had been closed by the FDIC.
“Their role over the last 10 or 15 years has changed dynamically,” said Tim Karsky, commissioner of the North Dakota Department of Financial Institutions.
First International used to be predominantly an agricultural lender and was one of the first banks to take advantage of the new branching law across North Dakota, he said.
“They’ve shown some innovation, and I think they’ve done well,” said Karsky. “It will be interesting to see where the next 100 years is going to take them.”
Ag and oil growth
Prior to the Great Depression, which lasted from 1929 into the 1940s, the bank had accumulated about $130,000 in total assets, said Stephen Stenehjem.
“By the time the Depression was at its toughest point, we were back down to about $65,000 or $70,000 in assets,” he said.
First International grew steadily during World War II. The late 1940s and early- to-mid-’50s were “golden times” in North Dakota, Stenehjem said.
Crops were good, it rained, and oil was discovered in McKenzie County, he said.
The growth trend repeated itself in the late 1970s and early 1980s, Stenehjem said, as western North Dakota witnessed another oil production explosion.
“The bank more than doubled in size during that oil boom. We went from
$20 million to $45 million (in assets) in a space of five years, from 1977 to about 1982,” he said.
“Of course our bank has seen the oil booms go bust,” he said, “and that’s what happened in about 1984-85. Oil went from $40 a barrel down to about $8 a barrel.”
Then came the 1988 drought that negatively impacted the state’s agriculture economy, he said. “So the oil boom was bust and the agriculture economy was hurting,” he said.
Once again, North Dakota is now witnessing another oil boom.
“It’s good to be a banker in western North Dakota right now,” Stephen Stenehjem said. “Agriculture is still pretty strong.”
His son S. Peter Stenehjem, representing the family’s fourth generation, is an assistant vice president at the First International Bank and Trust location at 3001 25th St. S., in Fargo.
“I love the history aspect of our bank and our family,” said Peter, who specializes in commercial lending.
He has worked for the bank part time for about 10 years and three years full time.
Today, seven Stenehjem family members are involved in operating First International which has about 350 employees.
Readers can reach Forum Business Editor Craig McEwen at (701) 241-5502