By Pete Steiner Special to The Free Press
The Mankato Free Press
---- — NORTH MANKATO — There it was, somewhat inauspicious, a trailer house tucked between the original Nakato bar and a small vacant lot. It was the first incarnation of Valley National Bank, North Mankato’s first bank in the three decades following the Great Depression. With just four employees, about all that could fit inside the 440-square-foot space, the little bank that WOULD, opened for business in August of 1963.
When JFK was still president for a few more months, and before the Great Flood of ‘65, before Fun Days, before Taylor Corp, in a time when North Mankato’s hilltop was still dominated by cornfields. Jerry Michaletz had just moved to town, to earn a living selling insurance. He would live in one of the first residential homes on that hilltop, but he would also loan a lot of passion to that little bank down in the valley.
Michaletz first got involved in banking, you could say, at the ground level: as a teenager, he got a job scrubbing floors at the bank in Green Isle where his father worked. By the time he arrived in Mankato in 1960, the 31-year-old Michaletz and his wife, Faye, had four children and just $400 to their name. He started selling group health and life insurance: “The only way I survived was working seven days a week. I knocked on every door in town.”
That, and attending service club meetings and church groups helped him meet a lot of locals.
Among them was prominent businessman, Dan Coughlan. Jerry and Dan hit it off, and in their discussions, it came up that North Mankato had no bank of its own — the last one had closed in 1932, during the “bank holiday” declared by the federal government in the Depression. Jerry jokes today, maybe no other bank had opened since, because no one could get across the Main Street Bridge to get a loan or make a deposit: the old at-grade-level bridge was notorious for long vehicle backups as drivers waited for freight trains to move through.
Michaletz and Coughlan eventually decided to seek local investors to open a bank on Belgrade Avenue. Several prominent businessmen each invested $2,000, and the Coughlan family took a major stake. Valley National Bank was incorporated for a mere $200,000 in equity. (By contrast, the bank, now owned by Frandsen Bank and Trust, is part of a group of more than three dozen banks with nearly $200 million in equity as well as $1.5 billion in assets.)
The bank opened for business on August first, 1963.
North Mankato didn’t have much of a business district at the time — several bars, Mutch hardware, a bowling alley, a barbershop, Brennan’s gas station at Belgrade and Range, and of course, the old Marigold Dairy complex at the east end of Belgrade. Now they had added a bank, tiny though it was.
With a number of major, well-established banks across the river, the question was obvious: how would that new bank in a trailer attract clients? Then-bank-President, John N. Maiers, offered a solution: “Ask [people you know] what interest rate they’re paying for their car loan, for their mortgage. Then, if you lower your interest rate by one-half percent,” Maiers said, “you’ll get customers!”
In May of 1964, Valley National moved east, just across the parking lot into a portion of a big two-story building built of Coughlan stone. The bank remains there to this day. An artist’s rendering in an ad for the grand opening even shows, they now had one of those new-fangled drive-by tellers. A Free Press ad for the grand opening calls it “Minnesota’s newest and growingest bank,” adding that they would be giving away eight $30 GE radios as door prizes!
By 1966, the bank was successful enough that they needed new capital. A group of new investor/directors was added that included a young man who had just become president of Carlson Craft, Glen Taylor.
The Coughlan family retained controlling interest in the bank for 15 years, until Twin Cities’ investor and entrepreneur Irwin Jacobs bought them out. Just two-and-a-half years later, in January, 1981, Jacobs would sell the bank to the man who, 15 years earlier, had been brought in as an investor/director, and whose own business empire was mushrooming, Glen Taylor. Taylor would eventually buy out Jerry Michaletz’ share, after he had served as a director for nearly a quarter of a century.
Keith Boleen had been working at Mankato’s Bank of Commerce when Glen Taylor decided to bring him over as President of Valley National. Boleen notes that today, the bank has expanded to fill most of the stone building it had moved into in 1964. In contrast to the original four employees in the trailer, now there are 34. Boleen remained president when Dennis Frandsen bought the bank from Taylor in 1998, changing the name to Frandsen Bank and Trust. The bank underwent major remodeling in 2002, and then again in 2013 prior to celebrating its 50th anniversary. It remains the only bank in lower North Mankato.
Boleen notes, there have been lots of changes in banking in the nearly quarter-century that he’s been bank president. For one, “There’s three times more banks now.” But even more, “Technology has changed banking considerably. You can even bank with your smart phone now, from anywhere. And regulations! More and more complex all the time.”
Is it harder for normal folks to get a loan?
“Yes and no. All the new regulations make consumer real estate tougher. In the ‘70’s, we needed three pieces of paper. Today, a mortgage might require you to sign 30 pieces of paper. Still, he adds, “a good credit history and reliable income will get you a loan. It’s just more complicated.”
Michaletz still remembers the first loan he got: “Four-hundred dollars, from Ferd Buscher [then at Bank of Commerce] just for living expenses.” Jerry says he got the loan simply on the basis that “Ferd knew my Dad was a banker!” Boleen quickly notes, today, you’d do that sort of financing with a credit card.
Beyond Valley National, Michaletz would go on to help start several other banks around the state. But his business remained insurance, and despite an obvious passion for banking, he served only as a director — “I didn’t want to own the bank!” In fact, he notes, the only time he was ever involved in day-to-day banking operations “was when I mopped the floors in Green Isle.”