We are retired employees with a total of over 130 cumulative years of service in Otto Bremer Banks and feel compelled to respond to the many questions we are asked in the communities about the current situation the banks and its employees find themselves in with the Otto Bremer foundation.
As a bit of history, the IRS Tax Reform Act of 1969 established that charitable foundations could not own more than 20% of a for-profit business by the deadline of 1989. This meant that the Otto Bremer Foundation must comply with the 20% ruling or sell Bremer Financial Corporation.
To meet this requirement the employees were given the opportunity to invest in class A voting stock of Bremer Financial Corporation. Employee’s enthusiastically embraced this opportunity. This led to employees owning 80% of the class A voting stock of Bremer Financial Corporation, comprising 8% of the economic value and the Foundation retaining 100% of the non-voting B stock and only 20% of the voting stock.
It was Robert Reardon who was chairman, president, CEO of Bremer Corporation and one of the three Otto Bremer Foundation trustees who led the effort to keep the banks under the Bremer flag. His leadership, the support of senior management, fellow trustees, much time, expense, effort, and the employees who stepped forward to embrace his plan made acceptance by the IRS a reality.
We as officers were a part of this structure that kept the banks strong and the communities benefited from grants received from these earnings. In the past 30 years, over $750 million have been given to nonprofit organizations in the communities that Bremer Banks serves.
We as bank employees felt a real sense of pride in working to help the trustees meet the requirements as stated in the trust document. In the years following, BFC has nearly tripled their size and added many other financial services. While we realize that selling the banks, as intended by the current trustees, may provide additional funds to meet the grant requirements, we strongly believe that Bremer wanted to build strong financial institutions in the communities that Bremer Banks served.
Those banks today are strong, competitive and growing the needs of the communities in a professional manner. His story says that the bank will be committed to support its customers and meet the needs of agriculture, commercial business and individuals in the community.
Because of the unique structure all employee’s felt ownership in Bremer’s statement “People will benefit in the communities where we serve.” Furthermore, we do not believe that selling the banks is good for our communities. We feel new shareholders (venture capital companies from out east or others) would not have the same interest in our Minnesota, North Dakota and Wisconsin customers, as our employee owners and existing banks do today.
We sincerely believe this proposed sale of BFC is completely contrary to Bremer’s desire and trust instrument. We continue to stand and support the employees, for the good of the Bremer customers and the communities which are served.