Duluth's Republic Bank is merging with Superior-based National Bank of Commerce, pending federal approval.
"The opportunities are fantastic. This is going to allow the Twin Ports to keep local dollars local," National Bank of Commerce CEO Steve Burgess said at a news conference Monday. "It's going to allow us to be a catalyst for economic growth within the community."
The combined institution will operate as National Bank of Commerce and become the second-largest bank by deposits in the Duluth market, according to the Federal Reserve.
Burgess said it will be "business as usual" for the next several months before the deal is expected to close later this year. Customers should not expect major changes, and the majority will keep their same account numbers, he said.
As for employees, Burgess said they would retain "the vast majority of the jobs on both sides of this transaction," but he could offer no specifics at this point.
The banks have a combined $1 billion in assets, according to the Federal Deposit Insurance Corporation, and 13 locations.
"We've had a strategic plan for a couple of years that we'd like to become a billion-dollar bank," Burgess said. "And this is an opportunity to do that."
National Bank of Commerce in 2016 initially bought a 49 percent share of Republic Bank, which was once owned by Jeno Paulucci, the late frozen-food magnate.
"It was paramount that ownership of Republic Bank went to a trusted, steady and stable organization which would carry on the Paulucci legacy," Mick Paulucci, one of Jeno's three children, said in a statement. "We chose National Bank of Commerce because they are the Twin Ports' largest community bank and a bank committed to serving this area."
Financial terms of the deal were not disclosed. Republic Bank CEO David Gaddie did not immediately return a call and email seeking comment.
Republic management expressed opposition to the 2016 minority acquisition, according to Federal Reserve Board documents.
Burgess said the combined entity would be able to offer larger loans and improve the technology available to customers. The acquisition also expands National Bank of Commerce's geographic footprint to Esko and Hibbing, where Republic has branches.
Republic Bank was founded in 1974; National Bank of Commerce in 1934.